What to Know
- It's not clear whether Semyon Shtayner used any of the loans to finance his new marijuana grow operation
- The Trump administration finds itself somewhat split on marijuana policy
- The value of taxi medallions has dropped precipitously in recent years from highs of over $1 million apiece
President Donald Trump's personal attorney, whose business dealings are being investigated by the FBI, and his father-in-law have lent $26 million in recent years to a taxi mogul who is shifting into the legalized marijuana industry, according to documents obtained by The Associated Press.
Semyon "Sam" Shtayner, a longtime business associate of Michael Cohen's father-in-law, created Nevada-based Cannaboss LLC the day before the 2016 election. A few months later, he took a majority position in a company that is provisionally licensed to cultivate medicinal marijuana and produce edibles, the records show.
"He personally manages over 500 taxi medallions, but he is looking to transition from the medallion business to the cannibas (sic)," according to the personal narrative Shtayner submitted last October to city officials in Henderson, Nevada, that was obtained by the AP under the state's public records law.
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It's not clear whether Shtayner used any of the loans — $6 million of which have come directly from Cohen since 2014 — to finance his grow operation.
Earlier this month, FBI agents searched Cohen's hotel, office and home seeking banking records, as well as records related to his dealings in the taxi industry, people familiar with the probe told the AP, speaking on condition of anonymity because they were not authorized to discuss the ongoing investigation.
Public records show the Ukraine-born Shtayner, 63, his wife and companies they control have used their properties in Chicago and Sunny Isles, Florida, as collateral for the loans from Cohen and his father-in-law, Fima Shusterman.
Neither Cohen nor his attorney responded to phone messages or an email seeking comment about the loans.
An attorney representing Shtayner in his Nevada marijuana ventures told the AP his client had no comment.
Reached on his cellphone, Shusterman declined to discuss his loans or Shtayner.
News of Shtayner's ties to the medical marijuana industry comes as the Trump administration finds itself somewhat split on marijuana policy.
Trump recently indicated he will support a law protecting states that already have legalized the drug — a position counter to that of Attorney General Jeff Sessions, who stridently opposes any such effort and in January lifted restrictions that had kept federal prosecutors from pursuing cases against those complying with state marijuana laws.
Marijuana use is fully legal in Nevada, seven other states and Washington, D.C., and 38 states allow medicinal or other limited uses.
It was not clear why Shtayner has decided to move out of taxis and into the grow business. But the rapid rise of ride-hailing apps such as Uber and Lyft has disrupted the taxi industry, and Shtayner is among a handful of prominent taxi owners who face lawsuits from creditors who once lent liberally to medallion owners.
The value of medallions — the physical plates affixed to cabs that owners are required to display — has dropped precipitously in recent years from highs of over $1 million apiece in New York just a few years ago to nearly half those amounts today.
The subsequent drop has left many taxi medallion owners overleveraged.
One former Cohen business partner, who managed Cohen's taxis for years, is accused in a lawsuit by creditors of hiding his assets in financial disclosures to his bank — including a luxury apartment in a Trump skyscraper.
Another former cab manager of Cohen's has declared bankruptcy and is facing criminal charges from state prosecutors in New York, who accuse him of pocketing nearly $5 million in taxes.
The business relationship among Cohen, Shusterman and Shtayner stretches back years. Property records in New York show that Shtayner and Shusterman were among the investors in an upper Manhattan taxi garage and auto repair shop in the 1990s.
Last August, Shusterman lent at least $12 million against properties owned by Shtayner, his wife or their companies, Chicago real estate records show. In a second series of four transactions in March, Shusterman lent the Shtayners or their companies an additional $8 million.
Four of the loans were made to Shtayner's wife, Yasya, and four others were directed to two Chicago taxi companies she manages, according to corporate documents. The Chicago Sun-Times first reported those transactions.
Cohen has been involved in the New York City yellow cab industry since the 1990s. He has a fleet of 22 cabs in Chicago and, along with his wife and father-in-law, has owned some 30 medallions in New York after initially going into business with his father-in-law, records show.
Shusterman — who, like Shtayner, started as a cab driver after emigrating from Ukraine — pleaded guilty in 1993 to federal money-laundering charges in a tax-evasion case involving cab drivers and a Brooklyn accountant.
Shtayner's Chicago cab empire has grown rapidly, though records show that 99 of his medallions are in foreclosure and 15 have some sort of violation. Forty-nine have already been taken over by the city for failure to pay taxes and fees.
Although Shtayner has been sued by creditors, operates a taxi business in a harrowing time for his industry and is borrowing heavily in nontraditional loans, the city of Henderson concluded that he is adequately liquid financially. The city's business operation division found that Shtayner and his business partner, a Las Vegas-based steel and aluminum provider, each had liquid assets that exceed the state's requirement that they be able to free up to $250,000 within 30 days if needed, according to the records obtained by the AP.
President Donald Trump said Thursday that personal attorney Michael Cohen handles very little of his legal work, but did represent him in the "crazy Stormy Daniels deal," a rare presidential public reference to the porn star who claims she had sex with the president in 2006.
Prosecutors in New York quickly claimed Trump's early-morning comments buttress their arguments that not much of the material that the FBI seized from Cohen's home, office and hotel should be protected by attorney-client privilege. Within two hours of Trump's interview, the prosecutors submitted papers in court citing Trump's comments.
Trump's remarks prompted fresh questions about his relationship with Cohen in the tangle of legal dealings involving the president, his legal fixer and the porn star. And they served as just the latest demonstration of the potential legal risks for Trump when he makes off-the-cuff statements about the case in interviews and on Twitter.
In a call-in interview with "Fox & Friends," Trump spoke about his relationship with Cohen, saying the lawyer handles "a tiny, tiny little fraction" of his legal work, then added: "like with this crazy Stormy Daniels deal he represented me. And, you know, from what I see he did absolutely nothing wrong. There were no campaign funds going into this which would have been a problem."
Cohen paid Daniels, whose legal name is Stephanie Clifford, $130,000 days before the 2016 election in exchange for her silence about an alleged sexual encounter with Trump. He now faces a series of legal actions, including an effort from Daniels to invalidate the nondisclosure deal. There's also a criminal investigation of Cohen in New York, which prompted the recent FBI raid.
Prosecutors said the April 9 raids resulted from a criminal fraud investigation. Sources have told NBC News that federal agents used it to search for information about the payment Cohen made to Daniels.
Trump has previously denied any knowledge of the payment. The White House has consistently denied the affair.
While Trump may have increased the chances that his communications with Cohen on the subject of Daniels are subject to attorney-client privilege by acknowledging that he was being represented by Cohen on the matter, he may also have undermined arguments that large quantities of other seized materials are subject to the privilege by claiming Cohen handled little of his legal work.
Either way, said trial attorney Joseph Cammarata, he would be better off speaking less.
"The more you say, the more you have an opportunity to be cross-examined on it," said Cammarata, who represented Paula Jones in her sexual harassment suit against President Bill Clinton. "You can't get hurt by words you don't speak."
Judge Kimba Wood said Thursday that she was appointing a former Manhattan federal judge to help determine what materials seized in the FBI raids are subject to attorney-client privilege. The judge noted that the government and Cohen's lawyers agreed that a "special master" was the best way to determine which materials should or shouldn't be off-limits to federal investigators.
Michael Avenatti, Daniels' attorney, asked the court for permission to be part of the case to determine if there are any materials showing that Daniels' previous lawyer, who negotiated her confidentiality agreement, violated attorney-client privilege in communications with Cohen. The judge gave prosecutors time to review the motion after Assistant U.S. Attorney Thomas McKay told her that so far there was "really no evidence" that Cohen received privileged information about Daniels.
Trump's comment that Cohen represented him in the Daniels matter seemed potentially at odds with his past denial of knowledge about the payment.
Avenatti tweeted that Trump and Cohen "previously represented to the American people that Mr. Cohen acted on his own and Mr. Trump knew nothing about the agreement with my client, the $130k payment, etc. As I predicted, that has now been shown to be completely false."
Trump's anger over the case has increased in recent weeks as the legal pressure on Cohen mounts. While the president is said to be increasingly worried about the materials seized in the raid and whether Cohen would consider cooperating with prosecutors, he insisted Thursday that the probe was related to Cohen's business and said "I've been told I'm not involved."
Avenatti told the AP on Thursday, "This is going to add considerable momentum to our effort to depose the president and place him under oath in an effort to discover which version of the facts is accurate."
Cohen is also dealing with a civil case filed by Daniels, who is seeking to invalidate the confidentiality agreement she signed before the election. He said Wednesday that he would assert his constitutional right against self-incrimination in that case. Daniels is also suing Cohen, alleging defamation.
Associated Press writer Larry Neumeister in New York contributed to this report.