Prosecutors Say Cohen Under Investigation, Rebut Privilege Claims
Documents disclosed in the Southern District of New York show that Michael Cohen, the personal lawyer for President Donald Trump, is the subject of a criminal inquiry into his personal business dealings. He also received a $500,000 "alliance fee" from Squire Patton Boggs.
April 13, 2018 at 03:59 PM
8 minute read
The original version of this story was published on New York Law Journal
Manhattan federal prosecutors, who say they are investigating Donald Trump's personal attorney Michael Cohen for conduct that largely centers on his “personal business dealings,” rebutted on Friday allegations that the documents seized in raids on his home and office at Squire Patton Boggs included thousands of privileged materials.
Agents on April 9 searched Cohen's home, office, hotel room, safety deposit box and electronic devices after getting authorization from a federal magistrate judge who found “probable cause to believe that such materials would include evidence of Cohen's own crimes,” prosecutors said in court documents.
“The searches are the result of a months-long investigation into Cohen, and seek evidence of crimes, many of which have nothing to do with his work as an attorney, but rather relate to Cohen's own business dealings,” prosecutors said.
After the raid, Cohen's lawyers, led by a team from McDermott Will & Emery, moved for a temporary restraining order, demanding the opportunity to review the documents first, before any law enforcement. Alternatively, Cohen's legal team asked the court to appoint a special master to supervise the review.
In redacted court papers, Cohen's lawyers said the seized materials “contain thousands, if not millions, of pages of documents” protected by attorney-client privilege and the attorney work product doctrine. Some of the documents include information related to Trump and other clients, Cohen's lawyers said.
The parties met in court Friday, with U.S. District Judge Kimba Wood of the Southern District of New York asking Cohen's attorneys to produce more information to back up their privilege arguments. Joanna Hendon, a partner at New York's Spears & Imes, entered an appearance on behalf of Trump. (Hendon was once a partner at Morgan, Lewis & Bockius, a firm that has also done work for the president.)
Prosecutors' court papers in response were also redacted and did not reveal the exact nature of their investigation. However, according to multiple news reports, the search warrants sought documents related to payments to women and other individuals with knowledge of alleged affairs by Trump.
In court papers, prosecutors said Cohen's claim that he has confidential communications with multiple clients is exaggerated, as Cohen has told at least one witness that he has only one client—President Trump.
Cohen has also claimed to have privileged communications though Squire Patton Boggs, with whom he had a strategic alliance. Squire Patton Boggs is unnamed in prosecutors' briefs, but the firm announced on April 9, the same day as Cohen's office was raided, that the alliance was terminated.
Based on what they have learned about the arrangement, prosecutors said, it is unlikely that a significant volume of attorney-client privileged material—if any—was seized in connection with Cohen's relationship with Squire Patton Boggs.
According to prosecutors, the agreement with Squire Patton Boggs provided that the firm would pay Cohen a $500,000 annual “strategic alliance fee,” and under certain circumstances, Cohen would also receive a percentage of the fees charged by Squire Patton Boggs for clients introduced to it by Cohen.
The alliance agreement also spelled out other aspects of the relationship between Cohen and Squire Patton Boggs, including that Cohen would be given an office at the firm; Cohen would maintain his own computer server system not connected to the firm's computer server system; and the firm would not have a key to Cohen's office.
For the duration of the agreement, Cohen introduced five clients to Squire Patton Boggs, prosecutors said. Cohen did not maintain timesheets at the firm and Cohen did not bill any clients through the firm, prosecutors said, adding that Squire Patton Boggs is not aware one way or another whether Cohen billed any of the clients for services of any kind.
“To be sure, it is possible that Cohen was copied on certain attorney-client privileged communications relating to clients of the firm. But to the extent such documents exist, it is likely—given the relatively short duration of the Agreement, the limited number of clients involved, and the utterly segregated nature of Cohen's relationship with the firm, both electronically and otherwise—the number of such communications is small,” prosecutors said.
A spokesman for Squire Patton Boggs declined to comment Friday on the total amount of money that the firm paid to Cohen over the course of its nearly year-long strategic alliance.
The spokesman said Squire Patton Boggs could confirm what prosecutors said in their Friday brief: “That Michael Cohen was never an employee or partner of our firm.”
“Since neither our firm nor any of our clients are involved in the government's investigation, there is nothing to add,” said the spokesman for Squire Patton Boggs, a global legal giant formed through a merger in 2014.
'Exceedingly few clients'
The U.S. attorney's office for the Southern District of New York has already obtained search warrants on multiple different email accounts maintained by Cohen, and has conducted a privilege review of the materials obtained pursuant to those warrants, prosecutors said.
The searches were carried out as part of an ongoing grand jury investigation by the U.S. attorney's office in Manhattan and the FBI, they said.
“Here, the warrant authorized seizure of materials from Cohen, because the judge found probable cause to believe that such materials would include evidence of Cohen's own crimes,” prosecutors said.
While Cohen claims that the materials seized include “thousands of privileged documents and communications related to numerous clients” of his, as well as privileged communications with Cohen's own attorneys, prosecutors said they believe that “Cohen has exceedingly few clients and a low volume of potentially privileged communications.”
Prosecutors claim that the overwhelming majority of evidence seized from Cohen pertains to his business dealings.
“It is neither apparent that Cohen, in his capacity as an attorney, has many, or any, attorney-client relationships other than with President Donald Trump,” Southern District prosecutors said, nor “that the seized communications will include a significant volume of communications with that one identified client.”
Prosecutors added that a review by the U.S. attorney's office indicated zero emails were exchanged between Cohen and the president, the latter of whom has long been averse to electronic communication outside the realm of Twitter.
The U.S. attorney's office said there is reason to doubt that even communications with his only publicly identified client about payments to Stephanie Clifford, the adult entertainer known as Stormy Daniels, would be protected by attorney-client privilege, noting that President Trump has publicly denied knowing that Cohen paid Clifford.
The information gathered in the investigation suggests that the “overwhelming majority of evidence seized during the searches will not be privileged material,” but rather will relate to Cohen's business dealings, prosecutors said.
Absent a search warrant, records could have been deleted without record, said Southern District prosecutors Robert Khuzami, Thomas McKay, Rachel Maimin and Nicolas Roos. (Khuzami, a former Kirkland & Ellis partner, joined the U.S. attorney's office in January as second-in-command to interim U.S. Attorney Geoffrey Berman.)
Prosecutors said in their brief that Cohen was seeking to prevent the U.S. attorney's office from reviewing evidence “of Cohen's alleged criminal conduct,” and had asked that defense counsel be permitted to review the materials and produce to prosecutors what defense counsel deems to be “responsive, non-privileged items.”
“This request is unprecedented, ” wrote prosecutors, arguing that Cohen's true motive is to delay the case and deprive the U.S. attorney's office of evidence to which it is entitled.
Prosecutors argued that they should be permitted to review documents they lawfully obtained, so long as a filter team has screened out privileged documents.
The FBI agents who seized materials pursuant to the search warrants were filter agents who are not part of the investigative team and have been walled off from the investigation team, prosecutors said, noting that they have “rigorous protocols” to ensure that the attorney-client privilege is respected.
Some of the material seized from Cohen could include recorded conversations, according to news reports. Legal ethics experts told sibling publication The American Lawyer on Friday that few law firms have guidelines for recording conversations with clients.
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