On the hot seat: A banker testifies at Trump’s criminal trial


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Michael Cohen (top left) used a First Republic Bank account that he established in October 2016 to send $130,000 to the adult film star Stormy Daniels. Prosecutors allege that former President Donald Trump subsequently made payments to Cohen that were reimbursement for a scheme to cover up a Trump sexual affair.


If you’re a private banker, you’ve probably dealt with fast-talking clients who treat every transaction as an urgent matter. Maybe you’ve even had clients who paint a false or misleading picture of their financial activities.

Gary Farro, a former senior managing director at First Republic Bank, recently found himself under a spotlight because of one such challenging client. On Tuesday, he finished testifying at the first criminal trial of a former president in U.S. history.

Farro’s problematic client was Michael Cohen, the former Trump Organization lawyer who paid $130,000 to adult film actress Stormy Daniels in the waning days of the 2016 presidential campaign.

Manhattan prosecutors have charged former President Donald Trump with falsifying business records in connection with payments that he later made to Cohen, allegedly to reimburse the attorney for his effort to cover up a Trump sexual affair.

Cohen, who pleaded guilty in 2018 to various criminal charges, including campaign finance violations and making false statements to a federally insured bank, has morphed into a prominent nemesis of the former president. He is expected to testify later in the trial.

But first, the jury heard from Farro, a New Jersey resident who last year joined Flagstar Bank, a subsidiary of New York Community Bancorp, after First Republic collapsed. He was called as a prosecution witness, and he said that he was testifying voluntarily. 

Farro’s testimony was both mundane and extraordinary. It focused on the kind of back-office work that banks do all the time in an effort to know who their customers are, but It also came in the midst of a presidential campaign in which the defendant is the presumptive Republican nominee.

From the witness stand, Farro recalled being assigned Cohen as a client in 2015.

“I can only tell you what I was told,” he explained. “I was selected because of my knowledge and my ability to handle, um, individuals that may be a little challenging.”

“Every time Michael Cohen spoke to me, he gave a sense of urgency,” Farro said, according to official transcripts of his testimony, which occurred over parts of two days. “He was a challenging client because of his desire to get things done so quickly.”

The events that landed Farro in the witness seat started with a phone call from Cohen on Oct. 26, 2016. That was 19 days after the emergence of the infamous “Access Hollywood” tape, in which then-candidate Trump bragged in vulgar terms about kissing and groping women, and 13 days before the election.

Cohen wanted to set up a bank account for a limited liability company — Essential Consultants LLC — that he had established nine days earlier. And he wanted to do so quickly.

“When Mr. Cohen called me, I was on a golf course, I know that’s very cliche for a banker,” Farro testified. “But I was on a golf course on a day off.”

Of course, Cohen had to provide various pieces of information so that the bank could do its due diligence before the account could be opened.

The bank’s know-your-customer form stated the following, based on the information that Cohen provided to First Republic: “Michael Cohen is opening Essential Consultants as a real estate consulting company to collect fees for investment consulting work he does in real estate deals.”

That assertion turned out to be false. The paperwork did not say anything about the true purpose of the bank account.

If Cohen had given any indication of the adult entertainment angle, “Well, we would certainly ask additional questions,” Farro said. “It’s not our money to determine where it goes. However, it is an industry that we do not work with.”

The paperwork also did not include any suggestion that the account would be used to help a political candidate. If there had been such a disclosure, Farro said, “There would be additional scrutiny.”

It took only five or six hours to get the Essential Consultants account approved and ready to fund. “Moving in and opening an account in a singular day is considered very quick,” Farro said.

Just four minutes before the 3 p.m. cutoff for wire transfers, Cohen moved $131,000 from a home equity line of credit that he already had at First Republic to the newly established Essential Consultants account.

The next morning, on Oct, 27, 2016, Cohen authorized a $130,000 wire transfer from the Essential Consultants account to an account for clients of Daniels’ attorney, Keith Davidson. The purpose of the payment was characterized in paperwork as a “retainer.”

During Farro’s testimony on Tuesday, Assistant District Attorney Rebecca Mangold asked: “Would the bank’s process for approving the wire be different if Mr. Cohen had indicated that the wire transfer was a payment to an adult film star?”

“Yes,” Farro responded. “There would definitely be enhanced due diligence on that.”

Farro also testified that it’s not atypical for a real estate transaction to be completed in a compressed period of time. Between Cohen’s initial call to Farro on the golf course and the wire transfer to Daniels’ attorney, only about 24 hours elapsed.

When it was Trump attorney Todd Blanche’s turn to question Farro, he asked whether First Republic may have failed to do appropriate due diligence. “I don’t know if that’s a fair statement,” Farro replied.

In January 2018, The Wall Street Journal reported that Cohen used Essential Consultants to pay $130,000 to Daniels.

First Republic ultimately decided to close certain accounts controlled by Cohen, Farro testified. “We chose not to be attached to what we consider to be negative press,” he said.

He also testified that media coverage was what alerted the San Francisco-based bank to the true nature of the transactions Cohen had made back in October 2016.

“Well, once the client does not be completely honest with us, we choose not to do business with them going forward,” he said.



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