(CNN) New York state tax department investigators are scheduled to meet Tuesday with an attorney for President Donald Trump's former personal lawyer Michael Cohen, as part of a state probe regarding Cohen and the Trump Organization that comes as federal prosecutors have asked state and local prosecutors' offices to avoid taking steps that could interfere with their federal case, according to sources familiar with the matter.
The move puts state investigators at odds with the senior leadership of the US Attorney's Office for the Southern District of New York, which in the weeks since it charged Cohen with eight criminal counts has requested that other offices with related inquiries hold off on proceeding with certain investigative actions that might derail their efforts.
"This is clear interference with an ongoing criminal investigation," a law-enforcement official involved in the matter said.
Further complicating the situation is that state tax officials, who are examining potential tax fraud by the Trump Organization, have sought to include local prosecutors from the Manhattan district attorney's office in any meeting with Cohen and his attorney, the sources said.
Federal prosecutors generally seek to complete their inquiries without the interference of other overlapping probes that could cause hiccups in their case. While Cohen has already pleaded guilty in the federal case, he has yet to be sentenced and could still seek to cooperate with the US attorney's office. In addition, federal prosecutors are continuing to pursue a line of inquiry stemming from their Cohen investigation, according to a person familiar with the matter: whether Trump Organization executives violated campaign finance laws.
The federal probe regarding the Trump company was first reported by Bloomberg News. A spokeswoman for the company didn't immediately respond to a request for comment.
In the days following the federal charges, US attorney officials relayed their preferences to the Manhattan district attorney's office and to the state attorney general's office, which has its own related inquiries and has been coordinating closely with the US attorney's office, these people said. The attorney general's office then conveyed the federal prosecutors' message to the tax department and to the office of New York Gov. Andrew Cuomo, according to the law-enforcement official involved with the matter.
The governor's office said it was never contacted on the subject. "No one has told us that the southern district of New York advised the tax department not to proceed with their investigation," said Alphonso David, counsel to the governor.
A tax department spokesman declined to comment prior to the publication of this story. After publication, the spokesman, James Gazzale, contacted CNN by email to say, "This is misinformation. Neither The US Attorney's Office for the Southern District of New York or any other law enforcement agency expressed that the US Attorney's Office did not want us to continue with our investigation of state tax matters."
Nevertheless, the tax department on Tuesday is set to meet with Cohen's attorney, Guy Petrillo, the sources said. It is unclear if Cohen himself is also scheduled to attend or if the prosecutors from the Manhattan district attorney's office plan to join.
Tax department inquiries are designed to be independent of the governor's office, which isn't supposed to have any involvement in or knowledge of their proceedings.
Petrillo didn't immediately respond to a request for comment. A spokesman for the Manhattan district attorney's office declined to comment.
In August, hours after Cohen pleaded guilty to the federal charges, the tax department subpoenaed him as part of an inquiry into the Donald J. Trump Foundation and whether the charity violated tax laws, CNN has reported.
The tax department now also appears to be examining the Trump Organization based on information included in the federal charges against Cohen, one of the people familiar with the matter said. Court filings from federal prosecutors showed that Cohen submitted false invoices to the Trump Organization in an effort to get reimbursed for hush money he paid to women who had alleged affairs with Trump, which the White House has denied. According to the filings, the company then paid out those invoices as legitimate business expenses. That could be considered tax fraud, this person said.
The tax department is also examining whether the Trump Organization failed to keep accurate books and records, which is a crime under state law, this person said.
The tax department can't bring any criminal charges on its own, and if it finds any wrongdoing, the department would have to refer the matter to the state attorney general or another prosecutor's office.
UPDATE: This story has been updated to include comment from the New York state tax department offered after its initial publication.