In February 2019, former Trump attorney Michael Cohen, who was sentenced last year to 36 months in federal prison after pleading guilty to bank and tax fraud, appeared before the House Oversight and Reform Committee to deliver much-anticipated testimony about his time in Trump’s inner circle. (The five-hour video of Cohen’s testimony, which you can watch here, garnered more than 111,000 views on C-SPAN, compared to a few thousand views on other videos uploaded around the same time.) Though the full transcript of the hearing is, as of mid-March, still being withheld pending further investigation, Cohen’s opening statement, which has been released, contained more than a few incendiary remarks, including claims that Trump is a “racist,” “conman,” and “cheat.” Elaborating in response to questioning by Rep. Alexandria Ocasio-Cortez (D-NY), Cohen claimed that Trump skirted the law, deflating the worth of his properties and assets, to lower his property tax liabilities. Cohen’s remarks, which have unleashed a wave of speculation and analysis, have led some to suggest that Trump may have engaged in bank fraud and tax evasion.
Cohen Hearing on Trump Fuels Speculation About Tax Evasion, Bank Fraud
At one point during the widely-viewed hearing (which reportedly attracted almost 16 million viewers, according to TIME Magazine), Rep. William Lacy Clay (D-MO) focused the questioning on Trump’s assets, asking Cohen whether he believed Trump had ever overstated their value in order to obtain loans.
“Did the president ever provide inflated assets to a bank in order to help him obtain a loan?” he asked.
Cohen, citing as an example Deutsche Bank – a German institution recently described in the New York Times as “one of the few banks still willing to lend money to the man who has called himself ‘The King of Debt’” – seemed to reply in the affirmative, alleging that Trump had exaggerated the value of his assets in pursuit of a loan to buy the Buffalo Bills football team. (Deutsche Bank, which has extended several loans to Trump in recent years, is now being subpoenaed by the office of New York Attorney General Letitia James.)
In an interview after the hearing, Clay remarked, “What we have learned today is that the president committed bank fraud by submitting a false loan application to Deutsche Bank.” He added, “I am still waiting on special counsel Robert Mueller. I think, though, it is obvious that crimes were committed, and I think eventually that there will be criminal charges filed against this president.”
Bank fraud wasn’t the only crime to be called into question by Cohen’s remarks, which also hinted at possible tax evasion. In his opening statement, Cohen noted, “It was my experience that Mr. Trump inflated his total assets when it served his purposes… and deflated his assets to reduce his real estate taxes.” (He also recounted, “When telling me in 2008 that he was cutting employees’ salaries in half – including mine – he showed me what he claimed was a $10 million IRS tax refund, and… said that he could not believe how stupid the government was for giving ‘someone like him’ that much money back.”) While it remains up for debate whether Trump’s alleged actions would constitute tax evasion (which is illegal) or tax avoidance (which is legitimate) – as a bombshell New York Times report pointed out last October, “The line between legal tax avoidance and illegal tax evasion is often murky” – the resulting scandal has done little to improve the administration’s image, which has suffered recently from a series of resignations, investigations, and indictments: most recently, the sentencing of former Trump campaign chairman Paul Manafort, whose prison term has now increased to 7.5 years.
IRS Tax Fraud Defense Attorneys in Orange County, California
Tax evasion and bank fraud are federal felonies. Offenders are subject to years in prison, massive criminal fines, and additional IRS restitution, in some cases costing millions of dollars. If you are under criminal investigation by the IRS, are concerned about the potential for a civil tax audit to turn criminal, or need assistance disclosing unreported income or assets, it is in your best interests to consult with a knowledgeable and experienced tax attorney immediately. For a confidential, reduced-rate consultation with an IRS tax fraud lawyer and CPA, contact the Tax Law Office of David W. Klasing online, or call (800) 681-1295.
Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland and Sacramento.
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