How a $130K Stormy Daniels payment became $420K in total payment

As a public service, here is a plausible explanation for why the Stormy Daniels checks and invoices amount to $420K when the payout was only 130K.  I believe there were 12 monthly payments of $35K which totals $420K.

•  Cohan took out a home equity loan for $130000.  At the time the average interest rate was 3.5%.  For Cohan to pay back the bank with 12 payments meant a total payout of $132,477.74.  I have no idea what the loan fees would have been but this does not throw out the calculations by much so lets go with this.
• 2.      Cohan needed to pay tax on the $130K he received so Trump would have had to pay more because Cohan needed to clear $130K after tax.  The tax rate at his estimated salary at that time was 33% if he filed jointly with his wife which I’m assuming he did.  This meant that Trump would have had to pay Cohan an additional $64,029.85 on top of the $130K.
• 3.       So far Trump’s total payout is $196,507.59.
• 4.       Cohan still needs to be paid his annual salary and bonus so this has to be thrown into the mix.  The average bonus for in-house lawyers is from 20% to 29% of base salary.  Since Trump was a known tight person, let’s assume the bottom range of 20%.  This would mean that:
• 5.       Cohan’s base salary comes in at around $186,243.67.
• 6.       If Cohan received a 20% bonus, he would receive $37,248.73. 
• 7.       When you add all this together, you get $420K spaced out with 12 payments of $35K.

 

 These numbers are not only plausible, they are downright reasonable.  My estimated base salary of $186,243.67 is perfectly reasonable for Trump’s personal lawyer.  If Trump paid less than a 20% bonus, then Cohan’s salary would be higher but well within reasonable range.  In 2017, which is when these payments began, the average salary of an in-house lawyer in New York city was $192,060.  I did the above calculations without knowing this so you can see my variables are quite reasonable.

 

So where is the crime here?

• 1.       Trump marked these down as legal expenses and retainer fees even though Cohan was an employee or in-house lawyer.  In-house lawyers are NEVER given retainer fees.
• 2.       You cannot double-dip for tax purposes.  You either post legal expenses or salary, not both.  In this case, Cohan’s salary was disguised as legal expenses, but Trump got tax deductions of $420K of legal expenses, plus roughly $223,492.41 on top of that for salary and bonuses.  This is tax fraud plain and simple every day of the week.
• 3.       For legal expenses to be legitimate, Michael Cohan would have had to be doing legal services above and beyond what he normally did as an in-house lawyer.  There were no such services.
• 4.       The checks were paid to a bogus company fronting as a legal consulting firm but which performed no legal consultation.

 

Unless trump can explain this, he is guilty regardless of who lied when.  This is the smoking gun which Trump’s team has failed to explain so far.  And trust me, this is a smoking gun!