'People don't want to know how it's done'

Eye witness: The spell-binding world of conjuror Steve Cohen

A mobile phone rings. This is astonishing, and not just because it happens in the middle of a highly intimate theatrical performance. That would be embarrassing, but the person who is making the phone ring in a most remarkable way is the star of the show, a man 40 people have paid a lot of money to watch, in the crowded parlour of a London hotel.

You may not have heard of a young, red-haired American called Steve Cohen, but serious followers of magic know he is one of the most remarkable mind-readers and conjurors in the world. Cohen doesn't go in for the smoke and mirrors of stadium magicians such as David Copperfield. He likes to work up close and personal, and charge for it: the likes of Michael J Fox and Martha Stewart pay up to $15,000 for him to appear at private functions, which is why he's known in the States as the Millionaire's Magician.

In the office of Michael Bloomberg, the billionaire Mayor of New York, he asked for a dollar bill. Watched closely by the Mayor, Cohen rubbed the bank note with his finger until the signature of the Secretary to the Treasury became that of Bloomberg himself. Or so he says. The note hangs in a frame on the wall of the Mayor's office, apparently, but I can't go and see it. I don't really believe the story either, so I'm sitting with people who have paid £40 each to be inches away from Cohen's magic fingers. One of them is Steve McAllister, who has travelled to Las Vegas to watch the greats of magic. Despite being magicians themselves, his friends are absolutely astonished when McAllister's mobile starts to ring.

Cohen is dialling it from across the room. The thing is, nobody has told him the number. McAllister simply visualised the necessary digits, in silence. When it rang he jumped out of his seat, literally, and looked shaken. Scared, even.

"For those who believe, no explanation is necessary," says Cohen with a grin. "For those who do not, none will suffice."

He is as fond of such epigrams as the European salon magicians of the 1850s who inspired his act, but Cohen is modern in other ways – not least in looking like the thin, nervy love child of Charlie Chaplin and Woody Allen in a suit that hangs off the shoulders since he lost a stone by adopting a diet of raw food. Cohen knows all about advertising – his shows are in the Langham Hilton, right opposite Broadcasting House – and he is a psychology graduate. Married to a Japanese woman, he likes to use the language of Eastern philosophy in his shows.

Which is, quite frankly, more fishy than sushi. For all his talk of spiritual energy, he is essentially only trying to con us into thinking something supernatural is going on. Anyone who seeks out an exclusive show such as this is eager to be tricked, so a combination of sleight of hand, distraction, psychological techniques and card-counting does the trick. Right?

Well, yes, up to a point. Yesterday, when we were talking in his hotel suite, he asked me to visualise an amazing holiday. I thought of walking on the beach in Mauritius. Then he said take off your shoe, which suddenly had white sand in it. Then a shell. Amazing stuff, except he was holding the shoe, not me. Any magician worth their top hat ought to be able to smuggle a shell into a shoe while the punter has his eyes half closed thinking about a beach.

Tonight I have managed to sustain my scepticism all the way through his skilful card tricks and the one with the silver coin that turns into a brick, which was learnt from his uncle at the age of six and so is obviously explicable. But now things are getting freaky. Two women close their eyes and hold out bare arms. He taps one with a feather, lightly, three times – but it is the other who reacts and swears she has been touched. Now he takes three wedding rings from volunteers, puts them into a glass tumbler, shakes it and lifts the rings out with a pen. They are interlinked. Oh boy. Then he shows us the time on a stranger's watch, asks a woman to hold it and think of a number. She says 18. When she opens her fist the hands on the watch have moved back 18 minutes, on their own.

That's it. Now I know what rich and powerful people obsessed with controlling their own lives will pay so much for: the existence of the inexplicable. The chance to believe in something extraordinary, because you've seen it with your own eyes.

"On a deep level people don't want to know how it's done," says Cohen. He's not about to tell anyone, for all the money in the world. "A comedian can make you laugh. Music can make you tap your foot. But magic makes you wonder."