Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 1 of 269 AO 106 (Rev. 06/09) Application for a Search Warrant UNITED STATES DISTRICT COUR T for the Southern District ofNew York In the Matter of the Search of (Briefly describe the property to be searched or identify the person by name and address) Four Premises and Two Electronic Devices, See Attached Affidavit and Riders ) l cliS MAG 2969 APPLICATION FOR A SEARCH WARRAN T under I, a federal law enforcement officer or an attorney for the government, request a search watTant and state the or describe person the (identify property or person following the on that believe to reason have I th.11t _ _ __penalty of perjury s ~ - - - - - -- - - - - it -a-nd--:--::R::-id'i-e_r_ ,d=--a-v::prf~'JP'p~JJir:ii~w'cf~v~(g'Jfr'lfA1t-6evices, See Attached A-=m=· S_o_u_th_e_r_n_ _ District of _____N_e_w_Y_o_r_k_ _ _ _ , there is now concealed (identify the located in the ___ person or describe the property to be seized): PLEASE SEE ATTACHED AFFIDAVIT AND RIDERS. The basis for the search under Fed. R. Crim. P. 41(c) is (check one or more): evidence of a crime; contraband, fruits of crime, or other items illegally possessed; r,J property designed for use, intended for use, or used in committing a crime; m m 0 a person to be arrested or a person who is unlawfully restrained. The search is related to a violation of: Code Section 18 u.s.c. s 371, 1005, 1014, 1343 and 1344, and 52 USC 30116 and 30109 Offense Description Conspiracy, false bank entries, false statements to a financial institution, wire fraud, bank fraud, and illegal campaign contributions The application is based on these facts: PLEASE SEE ATTACHED AFFIDAVIT AND RIDER. ~ Continued on the attached sheet. ) is requested days (give exact ending date if more than 30 days: _ _ __ _ 0 Delayed notice of under 18 U.S.C. § 3103a, the basis of which is set forth on the attached sheet. ~ II I Prinfe,d ha;he 'ctr,d.,,tjtle j·' . { ·, Sworn to before me and signed in my presence. Date: 04/08/2018 Al kk:1t1/ Yo /2 le. r. Ii/,,;;_: l-1/ H:i , 11- r· (-_ - } \;·_·: I / _,, I I -,, 1 '-,i. ____::_J_,_~_- · ff-~>r~ /'0:j·: ,-_7· -:, City and state: \ Hon. Judge's sign(lt/,lre ', · .-· ·1 - ·, '<. : .. ·.,; . :· ' \', ' ·· --"---- -- ..' H~m-y,8'. Pitnlan,, U.S. M?gisfr$t.e 'Judge .' ,prpiti;dname af1cltiilr · , . ' \ ( i ,•)\ii; ;_ I I l I j i fr. Il Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 2 of 269 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK In the Matter of the Application of the United States of America for a Search and Seizure Wan-ant for the Premises Known and Described ~ew as (1) 502 Park Avenue, York, New York 10022, (2) Michael Cohen's Office at 30 Rockefeller Plaza, 23rd Floor, New York, New York 10112, (3) Safe Deposit Box# - Located at the TD Bank Branch at 500 Park Avenue, New York, New York 10019, and (4) - - - - -- Loews-Regency-Hotel~540-Park-Avenue;-Room 1728, New York, New York 10065, and Any Closed Containers/Items Contained Therein, and the Electronic Devices Known and Described as (1) an Apple iPhone with Phone Number and (2) an Apple iPhone with Phone Number . Reference No. 2018R00127 TO BE FILED UNDER SEAL Agent Affidavit in Support of Application for Search and Seizure Warrant -=- - - -- - ' - - - - -- -- : ( : i ( SOUTHERN DISTRICT OF NEW YORK) ss.: Special Agent, Federal Bureau of Investigation, being duly sworn, deposes and says: I. Introduction A. Affiant 1. I am a Special Agent with the Federal Bureau of Investigation ("FBI"). I have been a Special Agent with the FBI since 2009. In the course of my experience and training in these positions, I have participated in criminal investigations into federal offenses involving a wide array of financial crimes, including frauds on financial institutions, as well as into offenses involving public corruption. I also have training and experience executing search warrants, including those involving electronic evidence. 2. I make this Affidavit in support of an application pursuant to Rule 41 of the Federal Rules of Criminal Procedure for a warrant to search the premises specified below (the "Subject 2 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 3 of 269 Premises") and the electronic devices specified below (the "Subject Devices") for, and to seize, the items and information described in Attachments A, B, C, D, E and F. This affidavit is based upon my personal knowledge; my review of documents and other evidence; my conversations with other law enforcement personnel; and my training, experience and advice received concerning the use of electronic devices in criminal activity and the forensic analysis of electronically stored information ("ESI"). Because this affidavit is being submitted for the limited purpose of estabtisltmg-probablecause;-if-doesnoti nclude-all-the-'-facts-that+hav e-leamed-during~the-course' of my investigation. Where the contents of documents and the actions, statements, and conversations of others are reported herein, they are reported in substance and in paii, except where otherwise indicated. B. The Subject Premises and Subject Devices 3. Subject Premises-I, Subject Premises-2, Subject Premises-3 and Subject Premises- 4 (collectively, the "Subject Premises") ai·e particularly described as: a. Subject Premises-I is Apartment located inside the building at 502 Park Avenue, New York, New York 10022. The building located at 502 Park Avenue is a 32floor brick residential building. Subject Premises-I is located on the tloor of the building. Based on my review of New York City property records, I have learned that Michael Cohen and Laura Cohen own Subject Pr~mises-1. 1 Additionally, as described below, Subject Premises-I is Cohen's full-time residence. b. Subject Premises-2 is an office located on the 23rd floor of the building at 30 Rockefeller Plaza, New York, New York 10112. The building located at 30 Rockefeller Plaza noted infra, I have learned that on or about October 28, 2015, Cohen transferred Subject Premises- I into a trust. 1 As 3 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 4 of 269 is a 66-floor office building that spans the entire block between Sixth Avenue and Rockefeller Plaza. Subject Premises-2 is located on the 23rd floor of the building inside of the offices of the law firm Squire Patton Boggs. The office is assigned to Michael Cohen. As described below, Michael Cohen works and conducts meetings at Subject Premises-2. c. Subject Premises-3 is a safety deposit box located inside the TD Banlc branch location at 500 Park Avenue, New York, New York 10019. Based on my review of records -rrraintained-by-m -Bank;I-have-leamed thatthe-safety-depositboxis-approximately-five -inches-b""'··- - ten inches in size, and is marked as box - The safety deposit box is in the name of Michael Cohen and Laura Cohen. d. Subject Premises-4 is Room 1728 located inside the Loews Regency Hotel at 540 Park Avenue, New York, New York 10065. The building is a luxury hotel located on Park Avenue and 61st Street. Subject Premises-4 is located on the 17th floor of the hotel. Based on my review of emails obtained pursuant to search warrants described below, I have learned that on or about January 5, 2018, Cohen received an email from an employee of Loews Regency, which included a price quote for a long-term stay suite based on a three-month stay from January 8 to April 8, 2018. 2 On or about January 29, 2018, Cohen sent an email to a Loews Regency employee, stating, in pertinent part: "I just spoke to my wife and she has scheduled the move for Thursday. Please mark down that we will be talcing possession on Thursday, February 1st." Based on my review of cell phone location data, I have learned that, over the past 24 hours, two cellular phones used by Cohen have been located in the vicinity of Subject Premises-4. In pmiicular, on or about Although the quoted price contemplated a three-month stay from Janumy 8 to April 8, it appears that Cohen did not move in until February 1, and as of today, April 8, cellphone location infonnation demonstrates that Cohen's cellular phones are in still in the vicinity of Subject Premises-4. 2 4 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 5 of 269 as the April 8, 2018, law enforcement agents using a "triggerfish" device identified Room 1728 room within the hotel in which the Subject Devices are most likely present. 3 Therefore, I believe that Cohen is temporarily residing in Subject e. Premises-4. 4. Subject Device-1 and Subject Device-2 (collectively, the "Subject Devices") are particularly described as: ber---- ---------·-- --- - - -a:--SubjectDevice;a-1-is-an-Apple-iPhone-serviceo-by-A-'F&-'Fwith-the-telephone-num Based on my review ofrecord s maintained by AT&T, I have learned that Subject ion Device-1 is subscribed to Michael Cohen. Based on my review of cellphone location informat maintained byAT& T, I have learned that Subject Device-1 is presently located in the Southern District of New York. b. Subject Device-2 is an Apple iPhone serviced by AT&T with the telephone number Based on my review ofrecord s maintained by AT&T, I have learned that Subject ion Device-2 is subsciibed to Michael Cohen. Based on my review of cellphone location informat maintained by AT&T, I have learned that Subject Device-2 is presently located in the Southern District of New York. c. Based on my training, experience, and research, and from consulting the tions manufacturer's and service providers' advertisements and product technical specifica available online, I know that the Subject Devices have capabilities that allow them to, among other receive things: make and receive telephone calls; save and store contact information; send and Based on my conversations with these agents, I understand that it is also possible that the Subject Devices are one floor below, in Room 1628. However, as noted, I understand that Cohen received on my a price quote for a long-term stay suite and is residing there with his family. Based to appears 1728 conversations with FBI agents conducting surveillance, I understand that Room be a suite, whereas Room 1628 appears to be a standard room. 3 5 2017.08.02 i Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 6 of 269 emails and text messages; download and run mobile telephone applications, including encrypted call and messaging application such as WhatsApp, Signal, and Dust; take, send, and receive pictures and videos; save and store notes and passwords; and store documents. C. The Subject Offenses 5. For the reasons detailed below, I believe that there is probable cause to believe that the Subject Premises and Subject Devices contain evidence, fruits, and instrumentalities of ~---~violat ions--of+S- --B-:S~&.- §§-1005-{f alse--bank- -entries), 1014 ffalse-statements to-- a-financial-~~-----------------institution), 1343 (wire fraud), and 1344 (bank fraud) (collectively, the "Bank Fraud Offenses"), 52 U.S.C. §§ 30116(a)(l) (A) and 30109(d)(l) (A)(l) (illegal campaign contributions) (the "Campaign Finance Offenses"), and 18 U.S.C. §§ 371 (conspiracy as it pertains to the other Subject Offenses) (collectively, the "Subject Offenses"). D. Prior Applications 6. The FBI and the United States Attorney's Office for the Southern District ofNew York ("USAO") have been investigating several courses of criminal conduct by Michael Cohen. Cohen is an attorney who currently holds himself out as the personal attorney for President Donald Trump, and who previously served for over a decade as an executive in the Trump Organization, an international conglomerate with real estate artd other holdings. 7. In connection with an investigation then being conducted by the Office of the Special Counsel ("SCO"), the FBI sought and obtained from the Honorable Beryl A. Howell, Chief United States District Judge for the District of Columbia, three search warrants for emails and other content information associated with two email accounts used by Cohen, and one search warrant for stored content associated with an iCloud account used by Cohen. Specifically: 6 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 7 of 269 a. On or about July 18, 2017, the FBI sought and obtained a search warrant for emails in the account - @gmail.com (the "Cohen Gmail Account") sent or received between January 1, 2016 and July 18, 2017 (the "First Cohen Gmail Warrant"). b. On or about August 8, 2017, the FBI sought and obtained a search warrant for content stored in the iCloud account associated with Apple ID - g}gmail.com (the "Cohen iCloud Account" and the "Cohen iCloud Warrant"). -- ~ - - - - - - - -- -- - c:------0n- or-about-November--1J,c-201-9, the-FBI- sought- and-obtained-a-seareh- ---- - 1 warrant for emails in the Cohen Gmail Account sent or received between June 1, 2015 and ~ ~. November 13, 2017 (the "Second Cohen Gmail Warrant"). d. On or about November 13, 2017, the FBI sought and obtained a search warrant for emails in the account - - (the "Cohen MDCPC Account'') sent or received between the opening of the Cohen MDCPC Account4 and November 13, 2017 (the "First Cohen MDCPC Warrant"). 8. The SCO has since referred certain aspects of its investigation into Cohen to the USAO, which is working with the FBI's New York Field Office. As part of that referral, on or about February 8, 2018, the SCO provided the USAO with all non-privileged emails and other content information obtained pursuant to the First Cohen Gmail Warrant, Second Cohen Gmail Warrant, and Cohen MDCPC Warrant. On or about March 7, 2018, the SCO provided the USAO Based on my review of this warrant and the affidavit in support of it, I know that the warrant did not specify a time period, but the affidavit indicated that, pursuant to court order, the service provider had provided non-content information for the Cohen MDCPC Account that indicated that the account contained emails from the approximate period of March 2017 through the date of the warrant. 4 7 2017.08.02 Il Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 8 of 269 t. 5 A filter team with all non-privileged content obtained pursuant to the Cohen iCloud Warran t to these warrants workin g with the SCO had previously reviewed the content produced pursuan for privilege. 9. On or about February 28, 2018, the USAO sought and obtained search warrant s for other accounts, sent emails in the Cohen Gmail Account and the Cohen MDCP C Account, among or received betwee n November 14, 2017 and February 28, 2018 (the "Third Cohen Gmail Warrant" uced-pu rsuantto -these-w ----·--- ~---~-- ---mid the ''Secon d CohenM DCPC· Warran t''):----T ue·cont entprod subject to an ongoing review for privilege by an SDNY filter team. 10. arrants- is--- 6 the The emails search wan-ants described above are referred to collectively as "Cohen Email Warrants." 11. for On or about April 7, 2018, the USAO and FBI sought and obtained a warrant 1 and Subject prospective and historical cellphone location information for Subject Deviceauthority to employ Device-2. On or about April 8, 2018, the USAO and FBI sought and obtained location of Subject an electronic technique, commonly known as a "triggerfish," to determine the Device-1 and Subject Device-2. IT. Probab le Cause A. Overview 12. FBI The United States Attorne y's Office for the Southern District ofNew York and (a) to defraud are investigating, among other things, schemes by Target Subject Michael Cohen to make an illegal multiple banks from in or about 2016 up to and including the present, and (b) or about February The SCO had previously provided a subset of this non-privileged content on 2, 2018. and obtained Rule 6 On or about February 28, 2018 and April 7, 2018, the USAO and FBI sought t to previously 41 search warrants authorizing the search of emails and content obtained pursuan issued warrants for additional subject offenses. 5 8 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 9 of 269 campaign contribution in October 2016 to then-presidential candidate Donald Trump. As noted, Cohen is an attorney who currently holds himself out as the personal attorney for President Donald Trump, and who previously served for over a decade as an executive in the Trump Organization, an international conglomerate with real estate and other holdings. 13. The investigation has revealed that Cohen has made affirmative misrepresentations in and omitted material infotmation from financial statements and other disclosures that Cohen ----pmvtded- to-multip le--ban.ks- in- connection -with- a- transaction- intended- to- relieve- Gohen -of- --approximately $22 million in debt he owed on taxi medallion loans from the banks. As set forth in detail below, in these fmancial statements, and in his oral and other written statements to these banks, Cohen appears to have (i) intentionally misrepresented his ability to pay cash by failing to disclose cash he began receiving in 2017 from new consulting work; (ii) significantly understated his total holdings of cash and cash equivalents; (iii) failed to disclose tens of thousands of dollars he received in monthly interest income, and (iv) failed to inform the banks from which he was seeking debt relief that he had agreed to make a $3 .8 million cash payment to a third party, in connection with debt. :tcquisition of the taxi medallions securing Cohen's By making these misrepresentations and material omissions, Cohen avoided making monthly payments on his loans, and attempted to fraudulently induce the banks to relieve him of certain repayment obligations and personal guarantees that Cohen and his wife had signed. 14. Additionally, the investigation has revealed that shortly before the 2016 presidential election, Cohen made a payment of $130,000 from a limited liability corporation ("LLC") to Stephanie Clifford, an individual who is alleged to have had an extramarital affair with then-candidate Trump. This payment was made to Clifford in exchange for an agreement not to make any public disclosures about her alleged affair with Trump. As set forth below, there is 9 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 10 of 269 probable cause to believe that Cohen made this payment to Clifford for the purpose of influencing the presidential election, and therefore that the payment was an excessive in-kind contribution to the Trump campaign. 15. Based on my review of emails obtained from the Cohen Email Warrants, information obtained pursuant to the iCloud Warrant, and documents produced pursuant to subpoenas, as well as my review of public sources, I have learned that Cohen has used the Subject Premises-to-(a)-receive-documentsrelated-to-the-transaction-intended-to-relieveGohenof-his-tax:i---medallion debt, (b) receive documents and/or conduct meetings related to his consulting work, (c) receive documents and/or conduct meetings relating to his fmances and assets, some of which, as noted above and as detailed further herein, he has concealed from the banks in connection with the refinancing of his taxi medallion debt, (d) receive and send documents relating to his payment to Clifford, and (e) house and operate electronic devices that were utilized in connection with, among other things, the taxi medallion transaction, Cohen's consulting work, and his payment to Clifford. Specifically, as described below, Subject Premises-1 likely contains evidence conceming Cohen's taxi medallion loans, his negotiations with banks, his personal fmances, his consulting work, his tax returns, and his payment to Clifford, as well as electronic devices containing such evidence, all of which constitute or contain evidence of the Subject Offenses. Additionally, as described below, Subject Premises-2 lilcely contains evidence relating to Cohen's consulting work, his finances, and his payment to Clifford, as well as electronic devices containing such evidence. Subject Premises-3, as described below, likely contains evidence relating to Cohen's assets and fmances, including assets that may not have been disclosed to banks in connection with the refinancing of Cohen's taxi medallion debt or documents relating to such assets, and documents or evidence related to Cohen's payment to Clifford. Subject Premises-4 lilcely contains electronic 10 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 11 of 269 devices, including Subject Device-1 and Subject Device-2, which themselves contain evidence of the Subject Offenses, including concerning Cohen's taxi medallion loans, his negotiations with banks, his personal finances, his consulting work, his tax returns, and his payment to Clifford. Accordingly, and as set forth in more detail below, there is probable cause to believe that the Subject Premises and Subject Devices will include evidence of the Subject Offenses. 7 B. Probable Cause Regarding Subjects' Commission o:fthe Subject Offenses ~ - - - - -------------- ---The-Bank -Fraud-Sche me----(i) Cohen's Statements to Sterling National Bank 16. As set forth in detail below, in 2014, Cohen, through LLCs controlled by him and his wife, Laura Cohen, entered into a series ofloans from Sterling National Bank ("Sterling") and the Melrose Credit Union ("Melrose"), secured by taxi medallions, for approximately $20 million. Though entered into by LLCs, the loans were also secured by personal guarantees in the names of both Cohen and his wife. Over time, as the taxi industry weakened and the medallions lost value, Cohen sought to renegotiate the terms of those loans and/or relieve himself from their obligations, including the personal guarantees. As part of that effort, Cohen made a series of representations to Sterling and Mekose about his net worth, assets, available cash and income, among other things. Specifically, based on my review of records maintained by -Sterling and Melrose, and public sources concerning the taxi industry and the value of taxi medallions, as well as my participation in interviews with a Sterling executive vice-president (the "Sterling Employee-1 ") and two other In the following recitation of probable cause, I frequently refer to phone calls or text messages involving Cohen. The text messages described herein as sent or received by Cohen were all sent or received from the telephone numbers associated with Subject Device-1 or Subject Device-2. The vast majority of the phone calls described herein made or received by Cohen were made or received by the telephone numbers associated with Subject Device-1 or Subject Device-2, although in certain limited instances Cohen used a landline or other phone. 7 11 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 12 of 269 Sterling employees ("Sterling Employee-2" and "Sterling Employee-3"), I have learned, among other things, the following: a. Taxi medallions are small metal plaques affixed to taxis. Without a medallion, it is illegal to operate a taxi in cities with medallion systems, such as New York City. Cohen and his wife own multiple LLCs that collectively own 32 taxi medallions (each LLC owns two medallions). 8 Cohen's purchase of these New York taxi medallions was originally fmanced by -------- ---1oan s· from Capital-Gue-bank; for whichthe-medallions-served-as-c0llateral~Gohen-was-n0t- a-taxi--- operator, and leased his medallions to a third party. That third party made monthly payments to Cohen, who in tum used some of those proceeds to make his monthly loan payments to Capital One. b. In early 2014, Cohen became a customer of Sterling when he sought to refmance a mortgage on a rental property that he owned. In or around April 2014, Cohen raised with Sterling the prospect of refmancing his taxi medallion loans, which were then at Capital One. By in or about September 2014, Cohen began negotiating a lending transaction with Sterling that would allow Cohen to pay off his loans at Capital One and borrow more money :from the then-increase in value of the medallions. According to Sterling Employee-I, in 2014, prior to the recent upheaval in the taxi industry- as a result of the emergence of ride-sharing services, such as Uber-tax i medallion loans were viewed by banks and investors as safe, short term credits, as the market value of taxi medallions was consistently dsing. Consequently, taxi medallion loans-lik e the loans held by Cohen-w ere :frequently refinanced at increasing amounts as the value of the medallions rose. According to Sterling Employee-I, borrowers typically cashed out the increase in the loan amount One of these companies, Mad Dog Cab Corp., was jointly owned by Sondra Cohen, who I believe is Cohen's mother. 12 8 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 13 of 269 and used the additional funds for other purposes. Cohen appears to have followed this approach in 2014, when he agreed to refinance his medallion loans for approximately $22 million, whichaccording to letters from Capital One in Sterling's files-was greater than his previous debt at Capital One Bank ($21 million, of which $14.6 million was a line of credit to Cohen). This allowed Cohen to cash out the proceeds from the transaction. c. Based on my review of records maintained by Sterling, I have leamed that on or ~~- -- ·--~-~ about December 8;-2014,-each-of eohen' ssixteentax.i-medallion-EEEs entered-into-loan-agreementsand promissory notes with Sterling for the principal sum of $1,375,000, with repayment due on December 8, 2016. Each loan was signed by Michael or Laura Cohen, depending on who was the sole shareholder of the LLC. The address listed for each of the LLCs was the address for Subject Premises-1. The loans were also each secured by a security agreement, dated the same day, making the medallions collateral for the notes. To give Sterling additional security, Michael and Laura Cohen signed personal guarantees and confessions of judgment, giving Sterling the right to pursue collection against the Cohens' personal assets were their corporations to default under the loan agreements. The personal guaranty agreements stated that the LLCs had offices at the address for Subject Premises-1, and contained a notice provision that stated that any notices required by the agreements should be mailed to Subject Premises-1. In total, Sterling agreed to lend approximately $22 million to the Cohens' companies. d. Pursuant to pruiicipation agreements, Sterling transferred 45 percent of Cohen's taxi medallion debt to Melrose. 9 Melrose, which had a business principally focused on taxi medallion loans, is now in conservatorship by the National Credit Union Administration ("NCUA"). 9 13 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 14 of 269 (and e. In evaluating Cohen' s requested refinancing of the taxi medallions, Sterling e. At Sterling's Melrose, consistent with its participation in the deal) conducted due diligenc August 1, 2014 request, Cohen provided Sterling with a statement of financial condition, dated 0,000 in total (the "August 2014 Financial Statement"), which indicated that Cohen had $100,74 ° 1 my review of a assets, $23,550,000 in total liabilities, and a net worth of $77,190,000. From viewed the Sterling credit memorandum, dated September 29, 2014, I lmow that Sterling edalli0ns-were-~transactioii-favorablyl5ecause; accountingfor-luaffpayrnents;-cash-flows-fromthem projected to be positive, the value of the collateral (as estimated by Sterling) exceede d $42 million, agreem ents-w as and the net worth of Cohen -who was the direct obligor under the guarantee dated October 20, over $77 million. An internal Sterling credit and risk rating analysis report, 2014, recommended approval of the loans for substantially the same reasons. I have f. Based on my review of records maintained by Sterling and public sources, learned that over time, the collateral backing Cohen's loans (taxi medallions) lessened in value due on loan payments to the rise inride-sharing companies. Additionally, Cohen began falling behind w with Sterling to Stl:lrling and Melrose. I lmow from records maintained by Sterling and an intervie , in sum and Employee-2 that, beginning in or around September 2015, Cohen told Sterling paymen substance, that the individual leasing Cohen's medallions had fallen behind in maldng ts to had been reduced, Cohen, and that as a result, the monthly cash flow from his taxi medallions , I have reviewed leaving him with a shortfall of approximately $16,000 each month. For instance call with Cohen an email from Sterling Employee-2, dated September 9, 2015, summarizing a on September 8, which according to the email and toll records for Cohen's cellphone occun-ed nt of financial condition, also °Cohen subsequently provided Sterling with a revised statemeliabiliti es of $23,550,000, and a 1 dated August 1, 2014, which reported assets of $99,420,000, total net worth of $75,870,000. 14 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 15 of 269 substance, about his cash flow 2015- durin g which Cohen told Sterling Employee-2, in sum and fu that same email, Sterling problems and a monthly shortfall of approximately $16,000. personal financial information Employee-2 commented that despite Cohen's statements, his nts." Cohen, however, according "indicate[d] a strong ability to make up the difference in payme to Sterling Employee-2, pushed the bank for a reduction in Cohen 's monthly payments. my participation in an g. From my review of records maintained by Sterling and -and--Sterling-Employee-2--spoke- - - -- ~ interview witnS teflin g Employee-:2:; -I-Irave-Iearried-that- eohen again on Septem nce, that the ber 28, 2015, and that during the call Cohen stated, in sum and substa individual to whom Cohen leases the medallions had again reduce d monthly payments to Cohen. I en in or know from my review of records maintained by Sterling that betwe about September 2015 ally and with Cohe n-of Cohen and November 2015, Sterling raised the possib ility-b oth intern collateral as additional security posting his real estate holdings, personal residence, or some other resisted these requests. From my for the banks.11 According to these records, however, Cohen I know that in or about November review of loan documents and records maintained by Sterling, earning sufficient returns on his 2015, as a result of Cohen's representation that he was not se agreed to amend their loans medallions to cover monthly interest payments, Sterling and Melro with Cohen by, among other things, reducing the interest rate Cohen paid to Melrose and extending the loan maturity date to December 8, 2017. g Employee-2, as well h. I know from interviews with Sterling Employee- I and Sterlin told Sterling Employee-I that as emails I have reviewed, that in or about October 2016, Cohen Cohen had a potential buyer of his taxi medallions, named who would agree to October 28, 2015, around Based on my review of property records, I lrnow that on or about posting his personal residencethe time period when Sterling raised the possibility of Cohen ses-I into a trust. Subject Prem ises-I -as collateral, Cohen transferred Subject Premi 15 11 2017.08.02 I I f i Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 16 of 269 assume Cohen's debt with Sterling and Melrose. Based on my review of records maintained by Sterling, as well as the interviews with Sterling Employee-1 and Sterling Employee-2 referenced above, I lmow that by or before October 2016, Cohen had entered into negotiations to sell his sixteen corporate taxi medallion entities to for the balance of the loans, which at the time was $21,376,000. I know from my review ofrecords maintained by Sterling, and my participation in an interview with Sterling Employee-2, that as a conditi01r ofthe"transfer of-the-medallion-"lo ans-and-beeause--Ste1-ling-was~unfamiliar-witb _ -Sterling requested that Cohen malce a substantial principal payment on the loan, of approximately one million dollars, prior to the transfer. Cohen rejected this request initially. But on or about January 31, 2017, Cohen told Sterling Employee-I, in sum and substance , that he would _ _--------------------------- 1 ~ ~ ~ ~ make a one million dollar principal reduction payment in order to move forward with the medallion transfer deal with . Indeed, in an email sent by Cohen to Sterling Employee-2 on or about February 22, 2017, Cohen confirmed that he "agreed to pay down 1 million from the loan amount." i. Pursuant to the participation agreements between Sterling and Melrose, Sterling was required to secure Melrose's agreement to participate in the transfer of the taxi medallion debt . On or about April 17, 2017, Sterling sent a memorandum to from Cohen to Melrose summarizing the terms of the proposed transaction, and noting the requirement that Melrose agree to the terms. On or about May 2, 2017, Sterling Employee-I told _that Melrose had agreed to the deal in principle, and that Sterling would be sending the parties a term sheet shortly. j. In order for the banks to conduct diligence and evaluate the proposed transaction fully, they requested financial information from the parties. On or about June 7, 2017, Sterling 16 2017.08.02 I I Ii Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 17 of 269 Employee-1 emailed Cohen to request an "updated personal financial statement," completed jointly with Cohen's wife, and Cohen's most recent federal income tax return. On or about June 8, 2017, Cohen emailed Sterling Employee-1 a Sterling personal financial statement form that had been filled out by hand, which referenced a statement of financial condition, dated May 1, 2017 (the "May 2017 Financial Statement") that was also attached. The May 2017 Financial Statement included a cover letter from Cohen's accountant, Jeffrey Getzel, stating, in sum and substance, that -----1 > ~ · tlre--'mformation- in-the·stateriient-came-from-Eohen-and-that-Getzel had not~eonfirmed-its-aeeuracy--· or completeness. The May 2017 Financial Statement stated that Cohen had total assets of l ! $41,955,000, total liabilities of $39,130,000, and a net worth of $2,825,000. The May 2017 I Financial Statement indicated that Cohen's assets were comprised of $1,250,000 in cash, I 12 rn $26,155,000 in closely held companies (such as the taxi medallion entities and his real estate 12 holdings), $3,200,000 in real estate investments, and his $11,000,000 personal residence. k. Based on my review of reports of law enforcement interviews of Sterling Employee -I, I have learned that Sterling Employee-1 reviewed the May 2017 Financial Statement with Cohen to, among other things, verify its accuracy, and Sterling Employee-1 asked Cohen about specific line items on the financial statement, including the cash amount, value of medallions, and total liabilities. Cohen stated to Sterling Employee -I, in sum and substance, that the May 2017 Financial Statement was accurate. 1. On or about August 16, 2017, Sterling Employee-I emailed Cohen and 1- , attaching a non-binding term sheet memorializing the potential transaction between Based on my review of Cohen's fmancial statements, I know that the precipitous decline in assets from his 2014 fmancial statement to his 2017 financial statements can be explained primarily by reported depreciation in the value of Cohen's real estate assets and medallion investments. 12 17 I I 2017.08.02 Ii Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 18 of 269 Sterling, Melrose, Cohen, and . The term sheet included a cover letter addressed of the term sheet and, on or to Cohen at Subject Premises-I. The parties negotiated the provisions md Cohen a copy of the about September 5, 2017, Sterling Employee-I sent, would borrow $20,000,000 executed term sheet. According to the term sheet, /Vas to acquire from from Sterling and Melrose, to be secured by the medallions that Cohen. ~ Ill. As part oftne agFeeffit!llt~a-c'cordirrgtothetermsheet, $-1,-265,91-3-inprinGipal{which.loan balance) would be is what would remain after the $20,000,000 payment on the outstanding and the banks dividing the repaid by Cohen and the two banks, with Cohen paying fifty percent g credit memorandum, remaining half of the balance. Based on my review of an internal Sterlin dated October 4, 2017, the parties reached a preliminary agreement that Cohen would pay $632,956 Melrose would absorb of the remaining $1,265,912 principal loan balance, and Sterling and ing to Sterling Employee$357,167 and $275,789, respectively, in the form of charge-offs. Accord al balanc e-desp ite its !, Sterling was willing to divide the repayment of the outstanding princip million dollar s-beca use prior insistence that Cohen make a principal pay-down of at least one Cohen represented on a telephone call with Sterling Employee- I, in sum and substance, that he had ofthe agreement, Sterling insufficient liquidity to pay the full outstanding principal balance. As part guarantees that they made and Melrose also agreed to relieve Cohen and his wife of the personal on behalf of the LLCs. Thus, after completing the ' transaction, Cohen would no longer have had any outstanding obligations to Sterling or Melrose. learned that n. Based on my review of emails sent by Sterling employees, I have riting by Sterling and because the transaction between the parties was subject to full credit underw September 2017, Sterling Melrose (as well as Melro se's regulators at NCUA), in August and 18 2017.08.02 - - -- - Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 19 of 269 I 1 required and requested additional financial statements and tax returns for Cohen and er 25, for its credit underwriting process. In response to Sterling's requests, on or about Septemb ! i I listed 2017, Cohen emailed Sterling Employee-2 a copy of his 2016 tax retum. The tax retum Cohen Cohen's mailing address as Subject Premise s-!. Additionally, on or about October 5, 2017, i l er 6, 2017, Cohen emailed Sterling Employee-2 a statement of financial condition, dated Septemb i ----I -=---=-------~-30~0-l'7-(the''September-201-'7--Financial-Statenient11_1-. October re-sent Sterling Employee-2 a copy of his May 2017 Financial Statement. A day later, on ~ o. Like the May 2017 Financial Statement, the September 2017 Financial Stateme nt included a cover letter from Jeffrey Getzel, Cohen's accountant, stating, in sum and substanc the information in the statement came from Cohen, and that Getzel had not confirmed its e, that accuracy assets of or completeness. The September 2017 Financial Statement stated that Cohen had total 13 Notably , $33,430,000, total liabilities of $45,630, 000, and a negative net worth of $12,200,000. Stateme nt unlike Cohen's May 2017 Financial Statement, the September 2017 Financial Financia l represented to Sterling that Cohen had a negative net worth. The September 2017 000 in Stateme nt indicated that Cohen's assets were comprised of $1,250,000 in cash, $17,630, ), 14 closely held companies (including the taxi medallio n entities and his real estate holdings $3,200,000 in real estate investments, and his $11,000,000 personal residence (which, for the first in Based on my review of Cohen's financial statements, I know that this further decline assets assets can be explained primarily by reported depreciation in the value of Cohen' s real estate and medallion investments. 14 Notably, the Septemb er 2017 Financia l Stateme nt valued each of Cohen's thirty-tw o New than the York taxi medallions at approximately $180,187.50, which was consider ably less sheet. m -ter $650,000 valuation ascribed to each medallion in the Cohen-13 19 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 20 of 269 time, he indicated was held by a trust). 15 The September 2017 Financial Statement included assets and liabilities not held in Cohen's name, such as various entities associated with his taxi medallions and some of his real estate investment entities. p. From my participation in an interview with Sterling Employee-2, and my review of records maintained by Sterling, I have also learned that around the time Cohen provided Sterling with these financial statemen ts-i.e., in or around September 2017-Co hen stopped paying - - ---'-mcm:tl1ly"lo-an-payments-on-his·taxi-medallion-loans · altogethe1';---'--Acc0rding-t0-Sterling-Employee-- ---------I 2, Cohen informed Sterling, in sum and substance, that he had insufficient funds to pay the monthly principal and interest payments on his medallion loans. By in or about December 2017, Sterling and Melrose had not been paid approximately $276,937.92 in monthly principal and interest payments on the medallion loans. Based on Cohen's financial condition as conveyed in the September 2017 Financial Statement, and his delinquency in making payments to Sterling, among other things, the bank's credit underwriting committee determined (and memorialized in a December 2017 memorandum) that the Cohen-' - transaction was favorable for the bank - that is, that- would be a better borrower than Cohen. q. On or about December 26, 2017, Sterling sent Cohen a demand letter requesting the immediate receipt of past-due loan payments. The demand letter was addressed to Cohen at Subject Premises-I. On December 29, 2017, Sterling sent Cohen a letter stating that he was in default under the loans between Sterling and Cohen's medallion corporations. The notice of default was addressed to Cohen at Subject Premises- I. Cohen did not make an ilmnediate payment on the loans, but instead sent an e-mail to Sterling Employee-I on or about January 24, 2018, Based on my review of property records maintained by the City of New York, and my participation in an interview with Getzel, I know that in 2015, Cohen transferred his residence to a trust. He did not disclose that transaction to Getzel or Sterling until in or about September 2017. 15 20 2017.08.02 i ~I I V Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 21 of 269 transaction, Cohen would "bring all stating that during the closing of the Cohen, payments up to date as well as deposit the payoff differential." Cohen also requested by email on January 24, 2018, that at the closing of the Cohen-' transaction, Sterling provide a letter stating that all of Cohen's debts have been satisfied and that Cohen's personal guarantees of the medallion loans had been terminated. r. The Cohen- --------------- transaction, however, did not close. On or about January ----:29;-2ot8;-the- -'-attorney-emailed-attomeys-for-Sterling--and-stated- that~at-this-timt)---- - - -- there is no deal with Michael Cohen. Some of the numbers have changed and we are not prepared to go forward." s. Based on my participation in the interview with Sterling Employee-2 and my review of records maintained by Sterling, I know that after the Cohen- foal fell apart, Sterling assigned Cohen's loans to Sterling Employee-3, who specializes in collecting on defaulting loans. From my participation in an interview with Sterling Employee-3, my review of telephone call notes taken by Sterling Employee-3, and my review of telephone records, I lmow that Sterling Employee-3 spoke several times to Cohen on or about January 30, 2018 about paying down and/or restructuring Cohen's outstanding taxi medallion loans. On the calls, which in total lasted more than an hour, Cohen stated in sum and substance that he did not have more than $1,250,000 to pay toward the medallion loans. On the call, in the course ofreviewing the failed transaction, Sterling Employee-3 questioned Cohen about the price rvas to have paid for each medallion, and whether there was a side agreement between Cohen and t. . Cohen denied that there was any side agreement with On or about January 31, 2018, Cohen emailed Sterling Employee-3 and proposed paying $500,000 to bring the loans current and $750,000 to bring the principal balance to 21 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 22 of 269 signature $20,500,000. Cohen also suggested revised monthly interest payment amounts. The -2. On or block on the email indicated that Cohen's address was the address for Subject Premises sum and about January 31, 2018, Sterling Employee-3 responde d to Cohen and stated, in down the substance, that Cohen would need to pay the entirety of the overdue payments and pay 00), principal balance of the loan to $20,000,000 (in total, a payment of approximately $1,750,0 and would need to make larger monthly interest payments. roposed-------- - -- --~·u:-- anor-ab ourFel5 ruary -t;-2018; Cohen-emailed-Sterling-Employee--3-and-p waive "[p]ayment of $1.250m which ALL can be used to pay down principal, if [Sterling] will original.) past due amounts," but stated "I do NOT have more than the $1.250m." (Emphasis in s to post Cohen also stated, in sum and substance, that he had insufficient financial resource indicated additional collateral or pre-fund monthly payments. The signature block on the email tion in an that Cohen's address was the address for Subject Premises-2. Based on my participa has interview with Sterling Employee-3, I have learned that since January 30, 2018, Sterling about continued to renegotiate the medallion loans with Cohen based on Cohen's representations Sterling his current financial position. In particular, according to Sterling Employee-3, Cohen and have an agreement in principal to restructure Cohen's loans based in part of Cohen's agreeme nt to become make a principal payment of approximately $750,000, to make a payment of $500,000 to monthly current on interest payments, and to post $192,000 in cash collateral for his future Sterling payment s on the loan. Cohen also agreed to pledge an interest he had in a property. to him, Employee-3 has stated that had Cohen indicated he had more than $1,250,000 available l amount Sterling would have, among other things, negotiated for a larger reduction to the principa of the loan. 22 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 23 of 269 (ii) Cohen Made Material Misrepresentations About His Finances to Banks Cohen Concealed from Sterling and Melrose Cash Derived from Consulting Work 17. As set f011h in detail below, despite multiple written and oral representations by Cohen to Sterling (and, by extension, Melrose 16) that he had insufficient funds to pay down the principal balance of the medallion loans, make monthly interest payments, or pay past-due amounts, it appears that between 2016 and the present, Cohen opened and maintained bank - aGGounts -at- First- Republic-Bank-(-':Eirst-Republic:.:.),-ancLthen_recehrecl.millions__of_dollarsc:.iA_ _ _ _ _ __ - -- - - i1 _f t< g consulting payments in these accounts, which he did not disclose to Sterling. Cohen set up these accounts and received these funds during the very period in which he made disclosures to Sterling about his personal finances (including his assets and liabilities) and his ability to make payments on the medallion loans. In these disclosures to Sterling-and despite being asked about these bank accounts by his accountant-C ohen misled the bank by claiming he had insufficient liquidity to satisfy his obligations or meet the bank's demands, while withholding information about these ongoing revenue streams and liquid financial assets at First Republic. 18. Specifically, based on my review of documents and bank records produced pursuant to a subpoena by First Republic, and my participation in and review of reports of interviews with a First Republic sales manager (''First Republic Employee-I") and a First Republic senior managing director ("First Republic Employee-2"), I have leamed, among other things, the following: Based on my review of a report of an interview conducted with an employee of Melrose, I have learned that, pursuant to the paiticipation agreement between Sterling and Melrose, Cohen's financial statements and other records in Sterling's possession were forwarded to Melrose so that Melrose could make a determination as to whether to approve of the Cohen-- transaction. Based on my review of reports of interviews with Melrose employees, I also know that Cohen called employees at Melrose regarding the Cohen- -tansacti on. 16 23 2017.08.02 • I i Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 24 of 269 a. Cohen and his wife have been customers of First Republic since approximately his own June 2011. Cohen controls several checking and loan accounts at First Republic, some in urname and others in the names of corporate entities. According to First Republic's know-yo 17 s-I. customer records on Cohen, his primary physical address is the address for Subject Premise b. On or about October 26, 2016, in Manhattan, New York, Cohen opened a new al checking account at First Republic in the name of Essential Consultants LLC (the "Essenti ing-toConsultants Account")--:-Tohen was tlie only autho-rized-signatmyon-the account;~.Accord address account opening documents, the primary address for Essential Consultants LLC was the for Subject Premises-I. When Cohen opened the Essential Consultants Account, First Republic urEmployee- I conducted an in-person interview of Cohen. In response to a series of know-yo customer questions about the purpose of the account -the answers to which First Republic 18 opening Employee-I entered into a form -Cohen stated, in sum and substance, that he was g Essential Consultants as a real estate consulting company to collect fees for investment consultin States. work, and all of his consulting clients would be domestic individuals based in the United Cohen also stated, in sum and substance, that his purpose in setting up the account was to keep the revenue from his consulting busines s-which he said was not his main source of income- separate Cohen's from his personal finances. As set forth below, there is probable cause to believe that were statements about the intended purpose of the account and source of funds for the account not false. Specifically, as described below, the account was not intended to receive---and does Certain financial institutions are required to conduct such procedures pursuant to the Bank . Secrecy Act and its implementing regulations. See 31 U.S.C. § 5318; 31 C.F.R. § 1020.220 18 First Republic Employee-I first filled out the form on the day he interviewed Cohen, October l, First 26, 2016. On or about December 19, 2016, at the request of bank compliance personne ts. statemen Republic Employee-I updated the form to add more detail about Cohen's 24 17 2017.08.02 Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 25 of 269 the appear to have received -money in connection with real estate consulting work; in addition, account has received substantial payments from foreign sources. c. I know from my review of First Republic bank records that were scheduled by an Cohen FBI forensic accountant that after Cohen opened the Essential Consultants Account, the received payments into that account from foreign businesses and entities that do not reflect lly, stated client profile for the residential and commercial real-estate consulting services. Specifica -sources ,Tknow -the----~ ------f rcmim y review ohhe-Es sential- eonsulta nts-Acc ount-sch edule-an d-publiG following: i. Beginning on or about January 31, 2017, Cohen began receiving monthly s Nova payments of $83,333 into the Essential Consultants Account from an entity called Columbu d LLC. According to public sources, Columbus Nova is an investment management firm controlle d by Renova Group, an industrial holding company based in Zurich, Switzerland that is controlle l by Russian national Viktor Vekselberg. From January 2017 to August 2017, the Essentia LLC. Consultants Account received seven payments totaling $583,332.98 from Columbus Nova ii. Beginning on or about April 5, 2017, the Essential Consultants Account began receiving payments from Novartis Investments, SARL, which I believe to be the in-house financial subsidiary of the Swiss pha1maceutical company Novartis International AG ("Novart is"). wire Between April 2017 and Februaiy 2018, the Essential Consultants Account received eleven 0, payments from a Swiss bank account held in the name ofNovartis, each in the amount of$99,98 for a total of $1,099,780. iii. Beginning in or about April 2017, the Essential Consultants Account started receiving wire payments from a bank account associated with the telecommunications company to the AT&T Inc. ("AT&T"). Specifically, on or about April 14, 2017, AT&T sent $100,000 25 2017.08.02 --- Case 1:18-cr-00602-WHP Document 48-1 Filed 07/18/19 Page 26 of 269 the Essential Consultants Account and, from in or about June 2017 to in or about January 2018, sent Essential Consultants Account received ten $50,000 payments from AT&T. In total, AT&T $600,000 to the Essential Consultants Account. iv. On or about May 10, 2017, June 9, 2017, July 10, 2017, and November 27, 2017, the Essential Consultants Account received four deposits in the amount $150,000 (totaling was $600,000) from a bank account in South Korea. The account holder from which the money -- - . . that- -sent 1sKorea AeI·ospace IndustriesLt