Michael Cohen Says Trump Asked Him Change Asset Values, Trump Lawyers React

Former President Donald Trump (C) sits in the courtroom with attorneys Christopher Kise (L) and Alina Habba during his civil fraud trial at New York State Supreme Court in New York City on Oct. 18, 2023. Doug Mills-Pool/Getty Images

NEW YORK—Michael Cohen, the one-time personal lawyer of former President Donald Trump and a former vice president of the Trump Organization, is scheduled to testify against his former boss in the ongoing civil trial in the case New York Attorney General Letitia James brought against the former president.

Ms. James brought the petition on behalf of the State of New York last September, after three years of investigation into allegations Mr. Cohen made about the Trump Organization’s financial statements being artificially inflated to obtain better loan terms. At the center of the case are the Statements of Financial Condition (SFC) for the Trump Organization from 2011 to 2021.

Ms. James is seeking $250 million in damages to be paid to the state of New York and the barring of President Trump and his adult sons, who are co-defendants in the case, from holding executive business positions in New York.

New York Supreme Court Justice Arthur Engoron had already ruled in a pretrial summary judgment on Sept. 26 that President Trump is liable for fraud.

Trump Reacts—4:40 PM

Justice Engoron ordered Mr. Cohen to not speak to anyone about his testimony, and the day ended at 4:40 p.m.

President Trump spoke with reporters on his way out, addressing the fact that he isn’t endorsing anyone for House Speaker.

“The witness is totally discredited already and we haven’t even started,” he said of Mr. Cohen’s cross-examination.

He also claimed that he was close to leading in the polls in New York as well.

“I‘ll be coming tomorrow, I’ll be here tomorrow too.”

Defense Questions Cohen About His Crimes—4 PM

Defense attorney Alina Habba questioned Mr. Cohen about the tax evasion charges he pleaded guilty to in the Southern District of New York. Earlier in his testimony he said he disagreed with the charges he pleaded guilty to.

He admitted to Ms. Habba that he lied to the judge when he said he was guilty of those tax evasion charges.

“He is a serial liar,” the defense attorney said of Mr. Cohen, citing it as grounds for impeachment.

“But I’m just supposed to believe you’re not going to lie to me now, is that correct?” Ms. Habba said.

Mr. Cohen would not answer except to say he objected to the question.

Justice Engoron commented that it was more of a statement than a question, and asked the attorneys to rephrase it.

A clip of Mr. Cohen’s deposition was played, where he again said he thought he was not guilty of the tax crimes he pleaded guilty to, and therefore he lied when he told the judge he was.

Cohen Testifies About Trump Buffalo Bills Bid—3:16 PM

Mr. Cohen said in 2013 he was given a copy of the SFC to use for business purposes and spoke with a magazine journalist who was doing a story on President Trump’s net worth. He showed her the SFC but she was not allowed to keep it. He also used the SFC to demonstrate Trump’s net worth when he made a bid for the Buffalo Bills.

Members of Deutsche Bank joined a meeting in President Trump’s office held “with the purpose of securing a loan that would be predicated off his assets” so he could bid on the NFL team, Mr. Cohen said.

The court took a recess and continued with Mr. Cohen’s testimony. He represented President Trump when he made the bill for the Buffalo Bills, in which he sent a letter with a $1 billion all-cash bid that stated President Trump had a net worth in excess of $8 billion.

Defense attorneys objected to the line of questioning and documents being entered into evidence, questioning their relevance. “Is the government’s intention to show President Trump did not have the financial wherewithal to complete the transaction?” the attorney asked. “What purpose are they being offered for?”

He noted that the $8 billion net worth claim included President Trump’s brand value, which was not included in the SFCs.

The judge asked whether the prosecution would disprove the $8 billion net worth claim, to which the prosecution responded they didn’t need to because his summary judgment already ruled that President Trump inflated his net worth each year in the SFCs from 2011 to 2021.

“I don’t think I need to prove up or prove down,” the prosecutor said.

Defense attorneys said “if we’re at a place now where the statements are irrevocably proved false ... we might as well close up now.” He argued the prosecution still needed to prove their claims in the trial, and the Buffalo Bills transaction, which never took place, was not related to any of the claims in the lawsuit.

Court Resumes With Cohen Testimony—2:13 PM

“This is a disgrace and they should apologize, they should not have it,” President Trump said on his way in. “We’re winning this case, other than the fact that we don’t have a jury.”

The trial resumed after lunch with a continuation of prosecutors questioning Mr. Cohen.

He said he did not work on the 2011 SFC but did on several others. He worked directly with the Trump Organization’s Chief Financial Officer Allen Weisselberg to “reverse engineer” a value and claimed President Trump asked them to meet.

Based on that figure, he said would look at assets and “increase their value” in order to meet the final figure.

“We would take this specific list of assets and we would figure out which specific line to increase the number, again to reverse engineer it into the total asset that Mr. Trump sought,” he said.

Mr. Cohen said he would have meetings with President Trump where he would say something like “I’m actually not worth $4 billion, I’m worth six [billion dollars]” and direct them to revise the SFCs accordingly. He said they would then “inflate” figures in order to do so.

Mr. Cohen claimed Trump Organization comptroller Jeff McConney would at sometimes be involved, as well as President Trump’s three adult children to the extent that they spearheaded the development of some of these properties and may have been asked about their values. Defense attorneys objected, pointing out that Mr. Cohen was attributing these claims to conversations they had with Mr. Weisselberg, and not him.

He said they would change numbers “in red pen.” The prosecutors showed him SFCs from 2012 to 2015 and asked whether he had increased values on any of the assets in the document.

In the 2013 SFC, Mr. Cohen said he changed the values of “possibly Trump Tower, Trump Park Avenue,” the commercial part of a Central Park facing property, a building near the United Nations, possibly the Seven Springs resort north of the city, and the Miss Universe pageant.

Generally, adjustments were done looking at “comparables in the area,” with the exception of Seven Springs, he said. “You look at other homes in the area and you use that as a basis for the subdivision parcel lots.”

“I know the area where Seven Springs is located. Top of the hill, the very top,” he said. “For example I looked at the value of a property that was beneath Mr. Trump’s ... and we took that value and we added to it.”

Trump Speaks to Press During Break—12:55 PM

The trial will continue after a lunch break.

Justice Engoron advised Mr. Cohen not to talk to anyone, including reporters, during the break.

President Trump told reporters that Mr. Cohen “is not a credible witness.”

He maintained that the value of his properties was higher than what he had on the SFCs, not lower, because of his brand.

Cohen Testifies About Trump Financial Statements—12:45 PM

Mr. Cohen said he worked on the financial statements as well.

“That was a complete listing of all of the assets of the Trump Organization, with each asset broken down into an asset class ... and the value was placed on the asset as well as any existing liabilities. The goal was basically to create a statement of financial worth,” he said.

He added that he initially did not know what they were for but came to understand they were a statement of net worth for President Trump.

The documents would be presented to insurance brokers, who would be allowed to take notes on it but not keep a copy.

The benefit was to show the assets had very high values and very low liabilities in order to obtain beneficial terms from the insurers, he added.

“I was tasked by Mr. Trump to increase the total assets based upon a number that he arbitrarily elected,” he said. “And my responsibility, along with Allen Weisselberg predominantly, was to reverse engineer the various asset classes, increase those assets in order to achieve the number that Mr. Trump had tasked us, whatever number Mr. Trump told us.”

Michael Cohen Sworn In—12:15 PM

Mr. Cohen took the witness stand.

He said he had pleaded guilty to several counts of tax evasion (for not reporting taxi medallions he owned), campaign finance crimes, and lying to Congress. He later served time in prison for the conviction.

“There was no tax evasion, at best it could be characterized as a tax omission,” he said after being asked whether he did not agree with any of the crimes. “I never not paid taxes, I never asked for an extension until 2017.”

He also clarified that the conviction regarding lying to Congress was for telling a committee that he spoke with President Trump three times about a Moscow project when in reality was closer to 10 times. He claimed he lied for President Trump’s benefit, and that his adult children had been involved in his lie.

He was asked to confirm that all of these crimes were committed while he was employed by President Trump.

He recounted being invited by President Trump to serve as executive vice president of the Trump Organization and his legal counsel in 2007. Donald Trump Jr. had introduced Mr. Cohen to his father after a dispute with the board of one of his properties, which led to other work.

“While sitting in his office he asked me if I would like to leave that sleepy old firm,” Mr. Cohen said.

He said there were more than a dozen executive vice presidents at the Trump Organization, but the position put executives directly under President Trump.

“I reported and only handled work for Mr. Trump,” he said, adding he only reported to him and was not part of a legal department.

“The Trump Organization is a company that is predominantly in real estate and also in branding,” he said. “During the time that I was there had media and television entities as well.”

Prosecutors asked Mr. Cohen about other Trump Organization executives’ roles.

“Don, Eric, and Ivanka would split various opportunities” when it came to acquisitions and development, he said, and held executive vice president titles, reporting only to their father.

“Every financial transaction went through his [CFO Allen Weisselberg’s] office,” he said, and comptroller Jeff McConney worked for him. “He handled all of the bookeeping.”

Trump Speaks During Break—11:43 AM

“They just admitted there was nothing wrong with the financial statements,” President Trump said as the court took a short break. He said the Attorney General’s office had caused the accountants a lot of trouble.

“This case should be ended immediately, and it should have never started,” he said.

As Mr. Cohen prepared to testify, President Trump posted on Truth Social an excerpt from a 2011 Huffington Post article where Mr. Cohen praised President Trump’s net worth and value, telling the outlet it was “substantially more” than what Forbes reported.

Mazars Attorney Cross Examined—10:57 AM

Mazars general counsel William Kelly has represented accountants for many years, and he specialized in advising them on tricky situations.

He was deposed at Trump Tower last Thursday, and then was informed the attorney he talked to had come down with COVID.

Defense attorneys asked Mr. Kelly to confirm the role of Donald Bender, a Mazars accountant. He said Mr. Bender knew the “ins and outs” of all of the Trump Organization’s financials. During depositions, he had said Mr. Bender could give “four-hour answers” to questions about the Trump Organization.

Mr. Kelly said he had no concerns about Mr. Bender’s work for the Trump Organization, and confirmed that after defense attorneys pointed to Mr. Bender’s testimony where he said he could not answer whether he “read every line” of the Trump Organization documents.

Defense attorneys are trying to establish that Mazars stood by their methods in preparing the financial statements for the Trump Organization.

A statement in the financial statements notes that President Trump’s name and brand have substantial value, which was not added to the values in the financial statements.

They pointed out that the change in reporting of the square footage of President Trump’s penthouse triplex in Trump Tower was something Mazars would have noted in the financial statements from year to year, and they did not flag this as an issue.

He confirmed that he was concerned the government would bring a lawsuit against the Trump Organization, and had communicated with the Attorney General’s office, supplying information and responding to subpoenas.

Attorneys Question Mazars’ Role—10:42 AM

William Kelly, general counsel for Mazars, was part of the team that determined they could no longer keep the Trump Organization as a client.

He wrote Trump Organization CFO Allen Weisselberg a letter explaining this, and advising him to no longer use the statements of financial condition Mazars had prepared from 2011 to 2020.

While the firm did not conclude there were material discrepancies, given the New York Attorney General’s investigation into the Trump Organization, Mazars stated it could no longer provide future work products, largely in part because they would be called upon to testify against the Trump Organization.

Mr. Kelly had never met with President Trump. After he sent the letter, Mr. Kelly had a phone call with Eric Trump, an executive vice president of the Trump Organization.

Mr. Kelly also wrote that Mazars did the work in accordance with professional standards.

Prosecutors asked if this was a contradiction for Mazars to stand by the work while informing the Trump Organization it could not be relied upon.

Mr. Kelly insisted there was no inconsistency; Mazars had done the work with the information they had at the time, and new information had emerged.

Defense attorneys objected to Mr. Kelly’s testimony; as he had joined the firm in 2018 and was not an accountant who would be able to speak accurately to the financial side of the matter.

Mazars Lawyer Testifies—10:13 AM

Lawyer William Kelly was sworn in.

Mr. Kelly became general counsel for the accounting firm Mazars at the beginning of 2018.

He became the lead counsel on issues related to President Trump, such as House investigations and the New York Attorney General requesting information from Mazars about President Trump.

He would communicate with Trump Organization attorneys on what was subpoenaed and what information was shared.

“We had to ensure that Mazars USA was in the best position it legally could be,” he said.

Mr. Kelly reported directly to the CEO.

Every time the firm received a subpoena, the firm did a client-continuance analysis and decided to continue with the Trump Organization as their client until May 2021.

Mr. Kelly was part of the team that decided to drop the Trump Organization as a client.

They had been subpoenaed in relation to an investigation into Allen Weisselberg, former CFO of Trump Organization. Mr. Weisselberg was ultimately convicted and served prison time.

“If his representations to us ... is compromised, we can no longer rely on him as CFO, we can no longer continue our duties,” he said.

He sent Mr. Weisselberg a letter informing him that the financial statements from 2011 to 2020 should no longer be relied upon, explaining they could not continue with the Trump Organization as a client.

After the Attorney General alerted Mazars of the investigation into the Trump Organization they did their own investigation based on financial information they had been provided by the Trump Organization.

The letter stated that the firm could not confirm all the financial statements “as a whole” contained material discrepancies.

In order for an accounting firm to issue an “opinion” about the financial statements they would need to do an audit or review, Mr. Kelly added for clarification, and Mazars did not do so.

He said the firm did not find material discrepancies, and the letter was to let Trump Organization know they had not reached any conclusions but advised them to no longer use those financial statements.

Trump Attorney Argues Trial Should Have Been Postponed After Positive COVID Tests—10:03 AM

Christopher Kise, attorney for President Trump, argued that the trial should have been postponed a day because four members of the Attorney General’s team tested positive for COVID last Wednesday, but did not alert his team until Saturday night.

He said people in the courtroom, including himself, are vulnerable to this illness, and President Trump is in the middle of a political campaign.

“It’s a bench trial,” Mr. Kise said, emphasizing that with no jury there is no need to push the trial forward rather than delay a day.

Alina Habba, another attorney for President Trump, asked for a second microphone so the prosecution and defense could use separate ones.

The four members of Ms. James’s team tested positive for COVID after deposing a “key witness” last week who had COVID. Mr. Kise did not reveal who the witness was.

Trump Arrives in Courtroom—9:55 AM

“He is a proven liar,” President Trump said of Mr. Cohen, referring to Mr. Cohen’s guilty plea for lying to Congress in 2018 and subsequent prison sentence.

“This case, by any other judge, this case would have been all over a long time ago. We did nothing wrong and that’s been proven,” he said.

President Trump only briefly answered reporters’ questions before entering the courtroom.

The judge briefly allowed pool photographers into the courtroom before Mr. Cohen was sworn in.

Michael Cohen Arrives to Courthouse—9:53 AM

Mr. Cohen walked up the steps of the courthouse. He will be giving his much-anticipated testimony today.