Michael Cohen's legal problems involve business dealings, payments to porn star: What to know

President Trump’s former personal attorney, Michael Cohen, is making a deal with federal prosecutors, Fox News has learned

He is expected to plead guilty in connection with the financial fraud investigation against him, which could include between three to five years of jail time, a source told Fox News. 

Federal investigators have been looking into his business dealings, including payments to women who alleged affairs with Trump and his cab company. FBI agents raided his home and office in April, seizing more than 4 million items — including financial records, information about his dealings in the taxi industry and communications with the Trump campaign.

Trump’s counsel had previously warned the president that Cohen — at one time a loyal, close friend — could turn on him.

Cohen, 51, previously worked for the Trump Organization.

Read on to look at some of the legal issues and controversies he’s faced.

Bank and tax fraud

Investigators are looking into whether Cohen committed bank fraud on over $20 million worth of loans pertaining to a taxi business he and his family owned.

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Particularly, investigators are looking into the possibility Cohen misrepresented assets in order to obtain loans from Sterling National Bank and the Melrose Credit Union, according to business records obtained by The New York Times. At issue, as well, is how Cohen’s company handled dozens of taxi medallions and if income from those were properly reported to the Internal Revenue Service.

Cohen used 32 medallions as collateral for loans, and at the time the medallions brought in more than $1 million a year and are valued at over $1 million, The Times reports.

Campaign finance

Investigators are probing whether Cohen violated campaign finance laws by offering payments to women who claimed to have relationships with Trump. In particular, the Justice Department sought documents when it raided Cohen’s home and office pertaining to former Playboy model Karen McDougal and adult film star Stormy Daniels.

McDougal has said she had a “consensual, loving relationship” with Trump in 2006. While this was prior to his presidency, Trump was married to Melania Trump at that point. McDougal was paid $150,000 to squelch her story of the relationship.

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Cohen’s attorney released last month a tape of a purported conversation between Trump and Cohen about paying McDougal.

On the recording, which was made prior to the 2016 presidential election, Cohen tells Trump: “I need to open up a company for the transfer of all of that info regarding our friend David" and adds that he has consulted Trump Organization CFO Allen Weisselberg "about how to set the whole thing up.”

The White House has denied the allegations of an affair. 

Cohen also arranged a $130,000 payment to Daniels in 2016 for her silence regarding an alleged sexual encounter with Trump in 2006 while he was married. Trump has denied an affair took place.

Additionally, investigators are looking into whether Cohen committed bank fraud by using a home-equity line of credit to pay Daniels.

Fox News’ Samuel Chamberlain, Edmund DeMarche and The Associated Press contributed to this report.

Kaitlyn Schallhorn is a Reporter for Fox News. Follow her on Twitter: @K_Schallhorn.