The sale of a building on the Lower East Side in 2014 has caught the attention of reporters from the McClatchy News Service, who have been looking into the financial dealings of Michael Cohen, an associate of Donald Trump.
While serving as a top executive at the Trump Organization for a decade, Cohen himself was a sometime New York real estate wheeler dealer whose companies appear to have netted as much as $20 million in profit by flipping properties to mysterious buyers. The facts surrounding one of Cohen’s ventures in particular raised red flags for several experts interviewed by McClatchy.
That venture involved 172 Rivington St., a five story walkup, located between Clinton and Attorney streets. The story, published this morning, explained:
In 2014, a mysterious buyer using a limited liability company that hid the purchaser’s identity paid $10 million in cash for a small apartment building on New York’s lower east side that Cohen had purchased just three years before for $2 million. The handsome appreciation came despite the fact that the assessed value of the property, at 172 Rivington St., hardly budged in these years, hovering around the price Cohen paid for it.
There was a similar pattern, reported McClatchy, in three other real estate transactions. A former federal prosecutor said, “An all cash purchase by an LLC of an overvalued property in Manhattan is usually worth a closer look by federal investigators.” Another expert pointed to, “potential fingerprints of money laundering” in the real estate transactions, although George Mason University Professor Louise Shelley added that they also, “could be explained by market opportunities.”
Cohen is under scrutiny by several Congressional committees and by Justice Department Special Counsel Robert Mueller, who are examining Russian interference in the 2016 Presidential election.
Cohen did not respond to requests for comment. He remains one of Trump’s personal lawyers and is a top fundraising official with the Republican National Committee.
UPDATE: In a followup story published by McClatchy, Cohen said the buyers paid cash because they were, “a family fund that put the proceeds from an earlier real estate transaction into his properties to defer paying taxes, as permitted by federal law.” Cohen said, “The buyer of all four properties is a New York real estate family fund that has been around for almost a century… And yes, they are American.”
Cohen did not respond to McClatchy before the news service published the original story, but in Trumpian fashion, began labeling the piece “fake news” on Twitter after the fact. More from the followup story:
He… said that the description of his sale of a building at 172 Rivington Street for five times his $2 million purchase price “fails to take into consideration the capital infusion I made after purchase,” and that he bought the property at a “great price.” Cohen declined to say how much capital he put into improving the building or to provide other details to explain the large difference between what he paid and what it fetched three years later. He provided no other information.