On top of that, the moves pose a different kind of peril for Trump than the investigation by Mueller for its ties to Russia. Unlike in federal cases, Trump has no power to pardon crimes charged by state prosecutors and no authority to shut down a state investigation into his business.

In his plea Tuesday, Cohen admitted that Trump directed him to pay hush money to Clifford shortly before the 2016 election in violation of campaign finance law. The Trump Organization approved paying Cohen $420,000 early last year based on sham invoices he submitted to recoup the $130,000 he paid to Clifford, according to court documents.

One Trump Organization executive instructed an employee to incorrectly record the first of Cohen’s payments in the company’s books as a “retainer” for the months of January and February 2017, the documents show. But prosecutors said that there was no retainer.

Three Employees

The company paid Cohen more than double what he claimed he ultimately spent for Trump’s campaign. At least three Trump Organization employees were involved in the effort, according to court records. According to Ryan, the reimbursement exposes the company to laws banning so-called straw donors.

New York state laws could also come into play. The bogus invoices Cohen submitted to the Trump Organization for reimbursement could open the company to claims it falsified business records, according to Mark A. Bederow, a Manhattan criminal defense attorney.

New York Attorney General Barbara Underwood has already sought a referral from the New York Department of Taxation and Finance to launch a criminal tax probe of Cohen’s activities, according to a person familiar with the matter.

‘Conceal the Truth’

It’s clear that Cohen’s bills and the way Trump’s company accounted for them “were intended to conceal the truth,” Bederow said, adding that such conduct would be a Class E felony in New York.

Sham invoices clearly are falsified documents, said Alfredo F. Mendez, a former chief of financial crimes for the New York Attorney General’s office who’s now a partner at law firm Abrams Fensterman Fensterman Eisman Formato Ferrara Wolf & Carone LLP. But to rise to the level of a felony charge state or local prosecutors would have to determine whether Trump Organization executives knew the documents were bogus and if they were created to cover up other crimes.