President Donald Trump's former personal lawyer and fixer Michael Cohen is formally cooperating with an investigation by the Manhattan District Attorney's Office into whether Trump's company falsified business records, a source familiar with the situation told NBC News.
Cohen, who is serving a three-year federal prison sentence for multiple crimes, is helping prosecutors in their probe of the Trump Organization as part of an effort to get a federal judge to reduce his sentence, another source familiar with the situation told CNBC on Thursday.
"He figures as much as he can help, the better," said CNBC's source of Cohen, whose proffer agreement allows him to share information with prosecutors without fear of having that information being used to file criminal charges against him.
Cohen has not yet formally asked his sentencing judge in his federal case to reduce his prison term.
Marc Mukasey, a lawyer for the Trump Organization, had a tart response to the news of Cohen's cooperation.
"When you lie down with dogs, you wake up with fleas," Mukasey told CNBC in an email.
On Aug. 20, representatives from the prosecutors' office, which is headed by DA Cyrus Vance Jr., went to meet with Cohen at the prison in Otisville, New York.
"Cy wants to go after the Trump Organization," the source said. "They're trying to get as much [evidence] as they can."
Cohen, who worked for Trump for years, has knowledge about hush money payments that he made to porn star Stormy Daniels and that American Media Inc., then-publisher of The National Enquirer, made to Playboy model Karen McDougal. The payments were made to keep the women quiet before the 2016 presidential election about their purported affairs with Trump years before.
Trump, who defeated Democratic nominee Hillary Clinton in that race, has denied having sex with either Daniels or McDougal.
But Vance's office is eyeing whether Trump's company, and top executive Allen Weisselberg, falsified records in connection with the hush money payouts to obscure the true nature of the disbursements.
In early August, Vance's office subpoenaed records from the Trump Organization related to payments to Daniels, and also issued a subpoena to American Media Inc., the Enquire's former publisher.
Cohen pleaded guilty in 2018 to federal campaign violations in connection with the payoffs, as well as to lying to Congress about an aborted effort to build a Trump Tower in Moscow, and to financial crimes.
He previously had cooperated with special counsel Robert Mueller's investigation of Russian interference in the 2016 election, actions by the Trump campaign, and possible obstruction of justice by the president himself.
Mueller's inquiry concluded without any recommendation of charges against Trump, but he pointedly did not exonerate the president on the question of whether Trump obstructed justice.
Cohen claims that the Trump Organization owes him $1 million in fees stemming from legal proceedings and criminal investigations.
In August, Cohen's lawyer, Lanny Davis, said he would subpoena Trump and other associates to prove the Trump Organization did not come through on their promise to pay those legal bills.
Davis declined to comment to CNBC about Cohen's reported cooperation with Vance's office.
Vance currently is prosecuting Trump's former campaign chief Paul Manafort on felony charges of mortgage fraud, conspiracy and falsifying business records. Manafort, 70, has pleaded not guilty in that case, which is not related to the Trump Organization.
Manafort is currently serving a 7 1/2-year federal prison sentence after being convicted in 2018 on charges of bank fraud, tax fraud, conspiracy and failing to file a foreign bank account. That case is connected to the long-time Republican operative's work for a pro-Russia political party in Ukraine.