Mueller has now developed evidence sufficient to persuade a federal judge that there is "probable cause" to believe that Cohen has in his possession evidence of a crime. Most experienced criminal lawyers would likely suspect that the Stormy Daniels $130,000 "hush money" payoff is the primary clue that sparked a closer look at Cohen's law office.
Everything about the payment looks unusual, from Cohen's claim that he used a personal line of credit on his house to fund the payment to statements by both Cohen and the President that Mr. Trump knew nothing about the payment. Lawyers don't customarily fund the contractual obligations of their clients as such actions can, depending on the circumstances, constitute unethical conduct by the attorney fronting or "gifting" the funds.
In addition, the timing of the $130,000 payment so close to the presidential election may suggest an unreported and illegal campaign contribution. How the money is treated for tax purposes may also trigger other legal concerns. Payments to people who claim to have had affairs with public figures are not currently tax deductible under the IRS Code even if your primary residences are Trump Tower and the White House.
The search warrants may uncover evidence of prior payoffs and the feds will have a strong interest in where the money came from and whether it was deducted as a Trump or Cohen business expense. Of course the search may also exonerate both men of any criminal conduct.
Cohen may have other problems. It is unethical for an attorney to act on behalf of a client without consulting the client. If Trump was not advised by Cohen that he had negotiated a $130,000 non-disclosure agreement with a porn actress prohibiting her from revealing anything suggesting an intimate relationship with Trump one month before the presidential election, he certainly should have been.
Cohen and the President have left room in their various accounts of the Daniels payment for Cohen to claim that as a long-time adviser, attorney and friend of the President he had been given general authority to act on behalf of Trump. That claim may get Cohen off the ethics hook but the whole Daniels "hush money" and Karen McDougal "catch and kill" deals look sleazy. It is hardly surprising that prosecutors would want to take a closer look.
If the crime were directly related to Mueller's "Russia collusion" probe as the President is fond of describing his investigation, most of the heavy lifting regarding procurement and execution of the warrant would likely have been handled by Mueller's office.
Instead initial reports suggest the search warrant was largely handled by the office of US Attorney for the Southern District of New York, Geoffrey Berman, a recent Trump appointee. Berman is also the former law partner of Rudolph Giuliani, one of Trump's early supporters and advisers.
The fact that the search warrant was obtained and executed by the US Attorney for the Southern District rather than by the Office of Special Counsel Mueller clearly indicates that the special counsel was well aware that he was proceeding in a new direction that could subject him to criticism that he was exceeding his mandate.
It is also clear that if a prosecutor becomes aware of the commission of any crime, he has the lawful duty to follow the evidence. Mueller (or his supervisor Deputy Attorney General Rod Rosenstein) appears to have acted sensibly in referring the matter to the leading federal law enforcement official locally, the Manhattan based US Attorney, for proper follow-up.
This seizure of evidence pursuant to search warrant on an attorney's office is a highly unusual and dangerous maneuver by any prosecutor. The attorney-client privilege protects most attorney records, and the courts, even when issuing a search warrant directed at an attorney's office, require protection of legitimately "privileged" documents. Failure to protect such information can lead to court sanctions or even dismissal of a case.
The FBI and Justice Department use lawyers and investigators walled off from the primary investigation to sift through the documents to prepare a "privilege log" for later submission to the court. At least in theory these "taint" teams remove any legitimately privileged items from examination by the primary investigators putting the case together. Or at least that is how it is supposed to work, though some of us who are criminal defense lawyers may be skeptical.
There remains a very important exception to the attorney-client privilege called the "crime-fraud" exception. If the attorney and the client are conspiring to commit a crime and use the attorney-client privilege to cover up the conspiracy, under law the privilege is automatically waived.
New York federal prosecutors will be carefully sifting through Cohen's records in search of any evidence that he conspired with his primary client, the President of the United States, to commit a crime. And the one thing we know for sure, a federal judge has reviewed the warrant application and has determined that there is "probable cause" to believe that Cohen's law office records contain evidence of some kind of a serious crime: a crime so serious that this judge permitted a raid on the office of the President's personal lawyer.
Something is up and President Trump's latest musings about firing Mueller won't make it go away. The new cop on this beat is Trump's own appointee, US Attorney Berman, who like all federal prosecutors is ethically required to follow the evidence of a crime wherever it leads even if not in the direction of Russia...but instead into Trump Tower.