Michael Cohen may be charged with fraud over US$20 million in loans. It’s bad news for Trump

Michael Cohen, Donald Trump’s former lawyer and right-hand-man, reportedly faces a federal investigation into possible bank and tax fraud relating to more than US$20 million in loans.

The New York Times reported that federal investigators in Manhattan were reaching the end of their inquiries and were “considering filing charges by the end of August”. According to the newspaper, their focus was falling on multimillion-dollar loans Cohen received from two New York banks as well as on income his family gained from the city’s yellow taxi business.

Federal investigators were also homing in on Cohen’s role in arranging hush money for two women who alleged affairs with Trump before the 2016 presidential election. The pay-offs might have constituted a breach of campaign finance law, The New York Times reported.

The darkening cloud of federal prosecutorial interest amid possible imminent charges is bad news for Trump, likely to substantially crank up pressure on Cohen to cooperate with the ongoing investigation of special counsel Robert Mueller. That probe is reaching a critical stage as Mueller seeks to determine whether collusion took place between the Trump campaign and Russia to sway the outcome of the 2016 election.

Mueller is facing mounting calls to bring his inquiry to a rapid end before campaigning for the November midterm elections kicks off. Given those demands, any charges against Cohen are likely to be brought by the end of this month or delayed until after election day on November 6.

Cohen has been drawn into the legal purview of both Mueller and other federal investigators since his office and home were searched in April. Since then he has given strong hints that he is prepared to cooperate with prosecutors in exchange for lenient treatment.