Point Ruston developer’s son, relatives, square off over funds tied up in Mexico
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- Loren Cohen, IRS and estate earlier reached settlement with Cohen assuming tax debt.
- Disputes persist in court within late developer’s family over access to bank accounts in Mexico.
- Allegations fly on both sides of alleged wrongful attempts to gain control of assets.
A family dispute over access to foreign assets stashed away by late Point Ruston developer Michael Cohen has accelerated with accusations of attempted manipulation and money-laundering schemes.
In April, Loren Cohen (son of Michael), the Internal Revenue Service and the court-appointed representative for the estate of Michael Cohen reached settlements shortly before a scheduled federal bench trial over business-asset transfers between Michael and Loren and resulting tax debt and insolvency.
Under the IRS settlement, Loren Cohen, among other terms, assumed his father’s tax debt, which had grown to more than $2.2 million at that point. That debt was left over from a complex business transfer of interests from his father to him in 2020. The payoff amount for the settlement was negotiated to $1.3 million.
In settling with his father’s estate, Loren Cohen was to pay $1 million toward estate debts. He in turn received a release of claims from the estate, and “the estate agreed to assign the Mexico Property, subject to any existing liens, to Loren Cohen,” according to terms filed in probate court.
Upon receipt of an initial payment, “the estate parties will work to assign any and all right, title and interest it may have in assets in Mexico to Loren Cohen,” according to a declaration from the estate’s personal representative, Seattle attorney Carol Vaughn.
While the settlement and an earlier one involving a former investor aimed to clear most of the estate’s immediate financial challenges, collecting on Michael’s assets south of the border has spawned additional litigation.
Background on the case
The News Tribune in November 2024 first reported on the Cohen estate case, originally filed in Pierce County Superior Court by Vaughn. The case was later moved to the U.S. District Court for the Western District of Washington after the United States was added as a third-party defendant in the estate’s tax debt.
Vaughn contended that Loren Cohen had overseen transfers of his father’s business interests to himself without paying fair value and which left the estate unable to pay creditors and the Internal Revenue Service.
Loren Cohen, through his attorneys, argued in filings that the assets had negative worth and that his father, who was in declining health, was “fully aware” in the final months of the transfer negotiations.
Loren Cohen, in a statement, told The News Tribune in November 2024 that he “loved and admired my father – who was also (a) business partner – and find these false allegations very distressing.”
He added, “I wholeheartedly deny all of these allegations and am determined to fight for my day in court where the truth will be heard.”
The case had been consolidated with a similar lawsuit filed by investor William Newcome, which later settled.
The estate case, which eventually moved back to Pierce County Superior Court, was then set to address access to the foreign assets.
The road to Mexico
A motion for a preliminary injunction was filed in the estate case in August by Loren Cohen against Michael Cohen’s widow and Michael’s sister, individually and as trustee of the Michael Arthur Cohen Spousal Equivalent Access Trust, regarding access to assets in Mexico — multiple bank accounts and some properties.
Attorneys for Michael Cohen’s widow, Amara Cohen, contend the Mexico assets are non-probate assets, and therefore untouchable by the settlement and out of reach for Loren.
“Loren seeks to deny Amara access to her own accounts based on settlements to which she was not a party and an assignment of rights the estate never possessed,” wrote attorney Eric Laliberte in a court filing as part of a team representing Amara Cohen and Michael’s sister Susan Cohen in her capacity as the trustee in the spousal equivalent access trust.
Attorney Jack Krona represents Loren and Holland Cohen and marital community and Loren as trustee of LMC Family Trust. Krona wrote in a filed response that Susan Cohen and Amara Cohen “had notice and the opportunity to object to the settlement, which expressly included this assignment. They never objected. The time to object has passed. The assignment to Loren is unassailable.“
Krona, in his preliminary injunction motion, wrote, “The IRS settlement was coordinated with a settlement with the Estate and provided time for Loren to pay the bulk of the IRS debt after a year to allow Loren time to recover assets his father had placed out of the jurisdiction in Mexico.“
Attorneys for Amara Cohen and Susan Cohen contend Loren Cohen is attempting to take what is Amara Cohen’s as a beneficiary of various bank accounts in Mexico.
“He has established no clear legal right to accounts where Amara is the designated beneficiary or owner, has shown no immediate threat justifying emergency relief, and has demonstrated no irreparable harm,” wrote Laliberte in a filed response.
Laliberte also contended that Loren, after the settlements, “spent months attempting to convince Amara to provide authorization to access her accounts, misrepresenting his intentions in the process.”
He wrote that Loren requested “Amara execute ‘assignment forms or power-of-attorney forms’ to enable him to ‘oversee and administer the withdrawal and transfer of the net proceeds.’ He characterized this as necessary ‘cooperation’ for implementing the Mexico (Memorandum of Understanding), when his actual intent ... was to retain the funds for his own settlement obligations.”
Recently filed responses, declarations and exhibits presenting depositions and emails in the case have offered new details of the late developer’s private life: Michael taking Amara and kids on trips to Mexico through the years as he made his banking rounds, his final year battling cancer, precipitous health decline and near death in August 2020, and his traveling south of the border also that year amid the height of the COVID pandemic to “tie up loose ends,” according to filings.
Michael Cohen died in December 2020.
Laliberte told The News Tribune in response to questions via email this week, “Loren is asking the court to freeze bank accounts that he has repeatedly admitted belong to Amara as the designated beneficiary. After he spent months trying to convince her to give him power of attorney over her own accounts, and after she refused, he suddenly discovered an ‘emergency’—five years after his father’s death.”
He added, “This is a transparent attempt by Loren to seize assets that belong to Amara and her and Michael’s children to pay for his own settlement obligations.”
Krona, in response to questions from The News Tribune, wrote via email this week, “My client continues to solve problems that resulted from decisions his father, Mike Cohen, made before he died of cancer, as well as problems caused by those who would seek to capitalize on Mike Cohen’s death and his son’s goodwill.”
He added, “My client is resilient, undeterred and optimistic about the future.”
Krona concluded by writing: “My client has no further comment on pending litigation or Amara Cohen’s attempts to secure funds Mike Cohen held in Mexico accounts that are, in fact, subject to an IRS tax levy.”
‘(expletive) you money’ and proposed transfer to Canada
In a Sept. 22 filing, Krona wrote that Michael Cohen’s former estate-planning attorney (and later trust lawyer for Susan and Amara Cohen), Kyle Johnson, was among those quizzed about the Mexico accounts in depositions last year.
Krona wrote in the filing that Johnson’s April 2024 deposition indicated Michael had four different banks with “money for Amara” which was, according to Johnson, “(expletive) you money. And that’s a common phrase among wealthy individuals who put money offshore.”
A portion of the deposition submitted in the exhibit shows Johnson adding, “but that’s my own characterization. Mike never said that to me.”
The deposition indicates Johnson was retained by Susan and Amara Cohen “to find out what the deal was” with the foreign bank accounts, and Johnson emphasized according to the deposition that he made clear the U.S. tax implications surrounding offshore assets.
“I have had experience in the past with clients who inherited money in Germany and found out the hard way that they owed the U.S. government a bunch of money because they had an offshore account. So yeah, I explained the penalties ... I would have told everybody, including Michael,” he stated.
Johnson added in his deposition, “I think Mike maybe always had a fantasy, this is just pure speculation ... that if things went to crap, he would go to Mexico and live off of those accounts in one of his houses.”
The final exhibit entered by Krona in his Sept. 22 response appears to show a single-page email from June 2021 from Susan Cohen to Loren Cohen outlining a possible plan for transferring money from Mexico into a new “trust account” in British Columbia. “Then I could purchase a rental property and declare that income and 7-10 years down the road sell the property and bring the money back to the U.S.”
The email in the exhibit states, “Mike said it was about $1.5 million,” in the accounts, and ends with, “Please call so we can discuss this. Thanks.”
“Sue Cohen also knew about the accounts and had a plan that a reasonable person would construe as a plan to launder the money through a Canadian account,” Krona wrote in his Sept. 22 filing.
Susan Cohen was questioned about the email in an October 2024 sworn deposition. In her deposition, of which portions were also submitted by Krona, she stated, “It wasn’t in my mind a serious email. It was like, Loren, I want you to start talking about this and thinking about this and coming up with some ideas.”
When asked about the significance of the plan in the email to later sell purchased property and bring the money into the U.S., she responded, “I don’t think there was any significant thinking or analysis or seriousness in it,” according to the deposition.
She added in response to further questioning, “I definitely didn’t think this email was going to result in those actions being taken.”
Laliberte told The News Tribune via email this week, “Loren has cherry-picked a single email and used it out of context in his submissions. We will address Loren’s recent submissions in this proceeding as appropriate.”
A hearing is scheduled Sept. 26, and the case is tentatively scheduled for trial next April.
Previous reporting from The News Tribune contributed to this report.
