(CNN) Federal prosecutors are preparing criminal charges against President Donald Trump's former lawyer Michael Cohen and could announce them by the end of the month, people familiar with the matter tell CNN.

The US Attorney's office for the Southern District of New York has been investigating Cohen for possible bank and tax fraud and campaign finance violations related in part to a $130,000 hush money payment made to silence porn star Stormy Daniels' allegations of an affair with Trump. Trump has denied an affair.

Investigators are also examining more than $20 million in loans obtained for Cohen and his family's taxi companies, The New York Times reported Sunday night, citing people familiar with the matter.

Criminal charges against Cohen would be a major setback to President Donald Trump because Cohen has long been in his inner circle. Cohen has prided himself over the years on his reputation as Trump's pit bull and once said he "would take a bullet" for Trump.

But Trump's longtime consigliere has since broken allegiance with his former boss. Cohen has expressed a willingness to cooperate with the investigation, but it isn't clear if prosecutors are interested in a deal or what information he has to offer them. The US Attorney's office operates under the guidelines of the Justice Department, which advises against indicting a sitting president.

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