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Trump's alleged financial fraud creates an important new vulnerability

If Trump tried to perpetrate a fraud against financial institutions, that's a felony -- for which the statute of limitations has not expired.

When it comes to Donald Trump's many controversies, there are qualitative differences between the stories. Some, such as his response to racist violence in Charlottesville, are gut-wrenching and painful, but these stories don't create any criminal liabilities for the president. The consequences of these fiascoes are political, not legal.

But there are a series of other Trump-related scandals that appear to put the president in legal jeopardy. For example, there's the counter-intelligence investigation into whether Trump's political operation cooperated with Russia during its attack on our elections.

There are also questions about possible obstruction of justice. And the campaign-finance scandal in which the president has already been named as an unindicted co-conspirator. And the investigation into the Trump Foundation's alleged crimes. And the criminal probe into the president's inaugural committee.

But this week, Americans were introduced to an entirely new line of inquiry. Bloomberg News reported this week:

How President Donald Trump may have inflated and deflated his personal wealth is more than mere curiosity: It could be of keen interest to any authorities trying to figure out if he misrepresented himself to insurance companies and lenders.Former Trump fixer Michael Cohen attested to Trump's shifting wealth valuations to lawmakers on Wednesday, bearing what he said were annual net-worth summaries prepared for Trump earlier this decade. Trump handed the summary with high valuations to lenders and journalists, Cohen testified. When it came to tax authorities, he lowballed.If falsehoods went to financial institutions, that would provide fertile ground for prosecutors in New York....

I can appreciate why some observers, even fierce Trump critics who'd love to see him prosecuted, may find this inherently underwhelming. When it comes to criminal misdeeds that bring down powerful individuals, exaggerated assets probably seem boring, if not trivial.

Let me try, however, to persuade you otherwise.

If you Rachel's first segment last night, you know about Donald Trump's mansion in Bedford, New York, which he purchased in 1995. He paid $7.5 million for it, and the purchase proved to be a good investment: by 2013, the home was assessed at $18.9 million. Four years later, its value was pegged at $19.6 million. As part of his presidential financial disclosure forms, Trump recently valued the home inside the range of $25 million and $50 million.

So far, this seems pretty normal. Fancy mansions in Westchester County grow in value, so the trajectory here seems wholly unremarkable.

But this week, Michael Cohen shed new light on the president's finances -- specifically Trump's financial statements from earlier this decade, when the future president's assets were allegedly exaggerated for a variety of specific purposes.

For example, Trump inflated his wealth to Deutsche Bank when seeking a loan. According to Cohen, he also exaggerated his assets to mislead insurance companies.

And in the case of his mansion in Westchester County, according to documents produced by Cohen, Trump briefly valued the property at $291 million in 2012.

That's not a typo. In 1995, he bought the home for $7.5 million, and in 2013, it assessed at $18.9 million, but in between, Trump said it was worth $291 million. He soon after changed his mind and put its value at a less ridiculous figure.

So what explains that radical, one-year exaggeration? Trump, according to Cohen's materials and testimony, used inflated figures like these to deceive financial institutions for his benefit.

And if the evidence is correct, and the president tried to perpetrate a fraud against financial institutions, that could be a felony -- for which the statute of limitations has not expired.

We know this isn't some kind of financial version of jaywalking, which no one is ever prosecuted for. In fact, we were recently reminded of the opposite: Paul Manafort, who led Trump's political operation in 2016, was convicted on a variety of felony counts, including defrauding banks and other financial institutions.

Indeed, Cohen himself will soon go to jail for, among other things, making "false statements for the purpose of influencing the actions of a financial institution."

We're talking about felony financial fraud, which routinely sends people to jail. We're also, evidently, talking about a fraud that the sitting president of the United States may have also perpetrated -- according to his own former personal attorney.

To be sure, I'm not saying Trump will be prosecuted over these allegations. In fact, I can't say for certain whether this is even the subject of an investigation, though it appears to be an area of interest to House Democrats.

At this point, I imagine some of the White House's allies will compare going after the president for financial fraud to going after Al Capone for tax evasion. In fact, last year, some Trump allies pushed this exact line -- as if other misdeeds, outside of possible "collusion" with Russia, don't really count.

Unfortunately for the president, criminal law doesn't work this way. When prosecutors are presented with evidence of a felony, the accused doesn't get to say, "Yeah, but those crimes aren't as dramatic as some of the other stuff I was investigated for doing."