How charges against the Trump Organization could cramp Donald Trump’s high-flying lifestyle

donald trump hat in hand
Former US President Donald Trump arrives for a rally at the Lorain County Fairgrounds on June 26, 2021 in Wellington, Ohio.

  • Donald Trump wasn’t charged in Thursday’s indictments against his company and its CFO.
  • But the charges will still give him financial headaches, legal experts say.
  • Trump’s personal finances are closely entwined with the company’s, which now may hemorrhage deals.
  • See more stories on Insider’s business page.

Former President Donald Trump was not personally charged in Thursday’s 15-count indictment against the Trump Organization and its CFO, but he is not out of the woods yet.

The Manhattan District Attorney’s investigation is ongoing, and prosecutors still appear to be interested in Trump’s personal role in possible tax fraud schemes. Cary Dunne, a prosecutor in the case, blasted Trump in court Thursday for downplaying the charges and said the alleged crimes were not “the act of a rogue or isolated employee.” The indictment also said the former president personally signed checks that were under scrutiny.

While it may not be immediately evident, the 15-count indictment also is likely to hit the former president’s wallet.

Trump’s personal finances are closely entwined with the Trump Organization’s. His high-flying lifestyle – living in his Mar-a-Lago estate in Florida, using his private jet, makeup and hairstyling – have all been categorized as business-related tax deductions, according to a New York Times analysis of his tax returns.

CFO Allen Weisselberg and Trump’s two oldest sons, Donald Jr. and Eric, have led day-to-day operations at the Trump Organization ever since the former president relinquished some control in 2017. But Trump still holds vast power and on-paper oversight, and he remains an owner and shareholder of the company.

“If you kill the Trump Organization, basically you kill the Trump family’s means of a rather extravagant high-profile and lavish lifestyle,” Randy Zelin, a defense attorney at Wilk Auslander LLP and former New York state prosecutor, told Insider.

Banks may dump the company

Weisselberg and lawyers for the Trump Organization pleaded not guilty to Thursday’s charges. But the company still may have an immediate problem with its lenders, according to legal experts.

Banks are highly regulated and will likely look at an indictment against a company as an excuse to back out of any deal, even if that company hasn’t been convicted. The company will also have a hard time opening new bank accounts and lines of credit.

“The most initial impact on Trump himself will be financial,” Anthony Capozzolo, a former prosecutor in the Manhattan District Attorney’s office and a former federal prosecutor in Brooklyn, told Insider. “One of the biggest collateral effects of a company being indicted is its banking relationships and other business relationships because, immediately, all of those companies have obligations, especially banks that are highly regulated. They are obligated to not do business with companies breaking the law.”

allen weisselberg trump organization court
Allen Weisselberg, Trump Organization CFO, leaves Manhattan Criminal Court after his arraignment in State Supreme Court on July 01, 2021 in Lower Manhattan in New York City.

The Trump Organization has around $600 million in debt due over the next four years, according to Bloomberg News. Zelin said it will have an even harder time finding new lenders with the reputational damage and legal headaches the indictments introduce.

“The moment the Trump Organization is charged, every bank is going to treat that as an act of default,” Zelin said. “No one will lend the Trump Organization a penny. You are essentially suffocating everyone who relies on the Trump Organization for their current standard of living.”

However, the bulk of the company’s debt – $330 million – is owed to Deutsche Bank, which does not plan to demand immediate repayment unless the Trump Organization is convicted of bank-related fraud, according to the New York Times. Thursday’s charges did not include bank fraud.

The fines upon conviction, according to New York state law, would be around double the amount of unpaid taxes. While that would be a blow, it wouldn’t be enough to bankrupt the company on its own.

It’s going to be harder to make new deals

In recent years, the Trump Organization hit some rough patches.

It’s a private company that doesn’t need to make public financial disclosures, but since it’s in the hospitality industry, its hotels, golf courses, and other businesses have no doubt been ravaged by the coronavirus.

Then many corporations cut ties with the Trump Organization following the January 6 insurrection at the US Capitol, when a mob of pro-Trump supporters sought to stop Congress from certifying the 2020 presidential election results. The company had already lost some partners following Trump calling Mexicans rapists and imposing a ban on people from Muslim-majority countries entering the US. While Trump was president, the company had also curtailed its exploration of foreign deals to limit potential conflicts of interest.

trump family allen weisselberg
Allen Weisselberg and members of the Trump family.

The companies still doing business with the Trump Organization may use an indictment as an excuse to back out of deals. The terms of the Trump Organization’s various contracts and licenses with casinos, hotels, apartment buildings, and other businesses aren’t fully known. But it’s very common for companies to sever ties upon an indictment rather than waiting for a conviction, according to Rebecca Ricigliano, a regulatory enforcement lawyer at the law firm Crowell & Moring and former state and federal prosecutor.

“It’s broader than bank loans or other loans and things like that. It’s contractual obligations writ large,” Ricigliano said. “And obviously the potential for fines, the potential for draining the books for legal fees. It costs a lot of money to mount a legal defense.”

Local governments that may have contracts with the Trump Organization – in places where the company has golf courses or ongoing development deals – may also try to back out of any contracts with the company, causing more headaches, legal experts told Insider.

Staffers may run to the DA’s office to save themselves

Now that the ongoing investigation has produced its first indictment, people who may be on the fence about cooperating may be more likely to take the plunge.

As Jeremy Saland, a former prosecutor in the Manhattan District Attorney’s Office and current attorney at Crotty Saland in New York, told Insider’s C. Ryan Barber and Camila DeChalus, the Trump Organization may see an exodus of staffers knocking on the DA’s door.

“Not only will banks, lenders, and business associates begin to flee, the financial consequences may send employees running for lifeboats and pointing a finger at the captain to protect themselves before everyone is submerged along with the former president,” Saland said.

cyrus vance jr letitia james manhattan da trump organization allen weisselberg
Cyrus Vance Jr., District Attorney of New York County, and New York State Attorney General Letitia James arrive in court for the hearing of Allen Weisselberg.

The Trump Organization doesn’t have many options to head off such an exodus, either. While CEOs typically try to cooperate with prosecutors to save their company, Trump has maintained his innocence and belittled the investigation as politically motivated.

“It’s a little bit tricky because the organization is so intertwined with the individuals,” Ricigliano said. “It’s almost like a family business that has become bigger over the years.”

Since the special grand jury in the investigation will run until November, prosecutors may still bring a superseding indictment against the Trump Organization and Weisselberg, and may bring additional charges against Trump himself.

Prosecutors are also looking into other issues, like whether the Trump Organization misrepresented property values to pay little in taxes while receiving favorable loan and insurance rates, and whether it broke financial laws by arranging a hush-money payment for Stormy Daniels. Those issues were not addressed in Thursday’s indictment.

“We’re just waiting for the other shoe to drop,” Zelin said.

C. Ryan Barber and Sonam Sheth contributed reporting.

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What we know about ‘Unindicted Co-conspirator #1’ in the indictment against the Trump Organization and its CFO

Trump Organization chief financial officer Allen Weisselberg exits after his arraignment hearing in New York State Supreme Court in the Manhattan borough of New York City, New York, U.S., July 1, 2021.
Trump Organization chief financial officer Allen Weisselberg exits after his arraignment hearing in New York State Supreme Court in the Manhattan borough of New York City, New York, U.S., July 1, 2021.

  • A 15-count indictment against the Trump Organization and its CFO was unsealed Thursday.
  • Prosecutors reference an “Unindicted Co-conspirator #1” in the document.
  • This person had a role in determining CFO Allen Weisselberg’s compensation in 2009, according to the indictment.
  • See more stories on Insider’s business page.

There is an anonymous person lurking in the background of the New York grand jury indictment against the Trump Organization and CFO Allen Weisselberg unsealed Thursday: “Unindicted Co-conspirator #1.”

Twice in the 25-page document, prosecutors reference the unindicted co-conspirator. Prosecutors normally use the term to refer to someone involved in an investigation who may still face charges down the line.

The charging document refers to only one unindicted co-conspirator.

According to the indictment, the Trump Organization, Allen Weisselberg, and the unindicted co-conspirator “agreed to and implemented” a compensation scheme that allowed Weisselberg to underreport his income. Prosecutors allege this scheme permitted Weisselberg to claim tax refunds he wasn’t entitled to, and skip out on paying taxes on $1.7 million worth of income since 2005.

“As a result of the conspirators’ actions, during the period of the conspiracy, Weisselberg took approximately $94,902 from the United States Internal Revenue Service in federal tax refunds to which he was not entitled,” the charging document says.

More specifically, the indictment says that the unindicted co-conspirator played a role in underreporting Weisselberg’s income from 2009.

“On or before April 5, 2010, the Trump Corporation, acting through its agent, Unindicted Co-conspirator #1, underreported Allen Weisselberg’s taxable income for the tax year 2009,” the indictment says.

So, who is it?

All we know so far is that, according to prosecutors, it’s someone who would be in a position to underreport Weisselberg’s taxable income in 2009.

  • That could be Donald Trump himself. After all, Trump was the CEO of the Trump Organization in 2009, and it stands to reason that he would sign his CFO’s checks.
  • It could also be someone like Jeffrey McConney, the Trump Organization Controller. He has worked for the Trump Organization since 1987, according to his LinkedIn, and in his role has a deep understanding of the company’s finances and payroll. McConney reportedly testified before the grand jury in June, and therefore may be legally protected from any charges based on his testimony, depending on whether he made an arrangement with the District Attorney’s office before testifying.
  • It could also be another tax preparer. The Trump Organization used Mazars USA, a third-party tax firm that handed over copious documents to the DA’s office after being subpoenaed. Given how closely intertwined the Trump Organization’s finances are with its executives’ finances, it’s possible Mazars accountants worked on Weisselberg’s personal taxes as well.
  • Or maybe it’s a third-party accountant who prosecutors allege was complicit in Weisselberg’s scheme to misrepresent his income for tax purposes in 2009.

In federal charges against a different Trump Organization executive, Michael Cohen, for illegal hush-money payments given to Stormy Daniels, prosecutors referred to an “Individual #1” later determined to be then-President Donald Trump himself.

That case triggered the Manhattan District Attorney’s investigation into the Trump Organization’s finances. The grand jury ultimately brought 15 charges in what prosecutors described as a sweeping tax-fraud scheme.

Weisselberg and attorneys for the Trump Organization pleaded not guilty to the 15 counts in court Thursday.

Prosecutors have been pressuring Weisselberg to cooperate in the investigation, and he may still do so even after Thursday’s charges. If the CFO does cooperate, it is likely prosecutors will ask for information about Trump’s personal role in preparing the Trump Organization’s tax forms and determining executive compensation.

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Trump personally signed tuition checks for CFO Allen Weisselberg’s family members, prosecutors say

donald trump allen weisselberg
Trump Organization chief financial officer Allen Weisselberg.

  • Trump personally signed CFO Allen Weisselberg’s family members’ tuition checks, NY prosecutors alleged.
  • They said the practice went on from 2012 through 2017 and that Weisselberg did not report the “indirect compensation” in his taxes.
  • Weisselberg and the Trump Organization were charged with 15 felony counts on Thursday.
  • See more stories on Insider’s business page.

Former President Donald Trump personally signed the tuition checks for Trump Organization CFO Allen Weisselberg’s family members, Manhattan prosecutors alleged in a 25-page indictment charging Weisselberg and the Trump Organization with 15 felony counts.

According to the document, one of Weisselberg’s family members started attending a Manhattan private school in 2012, and another one of family members started attending the same school in 2014. Prosecutors said that from 2012 to 2017, “Trump Corporation personnel, including Weisselberg, arranged for tuition expenses for Weisselberg’s family members to be paid by personal checks drawn on the account of and signed by Donald J. Trump, and later drawn on the account of the Donald J. Trump Revocable Trust, dated April 7, 2017.”

The indictment went on to say that although the tuition expenses for the Weisselberg family members constituted taxable income and were part of his annual compensation in internal company records, the “indirect compensation in the form of tuition payments was not included on Weisselberg’s W-2 forms” or reported to federal, state, or local tax authorities, “and no income taxes were withheld by the corporate defendants in connection with the tuition payments.”

Prosecutors said that Weisselberg “intentionally” omitted the tuition payments from his personal tax returns even though he knew the payments “represented taxable income and were treated as compensation by the Trump Corporation in internal records.”

Altogether, the indictment said, Weisselberg didn’t pay taxes on $359,058 in tuition payments for his family members that he received from 2012 through 2017.

Jennifer Weisselberg, the ex-wife of Allen Weisselberg’s son Barry Weisselberg and a cooperating witness in the Manhattan District Attorney’s investigation, previously told Insider that the CFO arranged for tuition payments for her children. She said the Trump Organization gave compensation like tuition and taxes as a way of controlling employees.

“It was like Allen designing a plan,” she said. “It was like, ‘OK, the way we’re going to maestro this is instead of a raise, we’re going to pay my daughter’s tuition. Instead of a raise, we’re going to pay for the apartment.’

Prosecutors subpoenaed documents from Columbia Grammar and Preperatory School earlier this year, the Wall Street Journal previously reported.

Thursday’s charges are the first ones prosecutors brought amid a three-year investigation by the Manhattan district attorney’s office into whether the Trump Organization violated state laws and engaged in financial fraud.

Prosecutors accused Weisselberg and the Trump Organization of the following:

  • Scheme to defraud in the first degree.
  • Conspiracy in the fourth degree.
  • Grand larceny in the second degree.
  • Four counts of criminal tax fraud in the third degree.
  • Four counts of offering a false instrument for filing in the first degree.
  • Four counts of falsifying business records in the first degree.

Carey Dunne, one of Manhattan district attorney Cyrus Vance Jr.’s top deputies, said in court Thursday that the alleged criminal conduct was carried out as part of a “sweeping and audacious payment scheme” and that Weisselberg personally did not pay taxes on $1.7 million of his income dating back to March 2005.

Weisselberg and the Trump Organization pleaded not guilty to the charges.

Liz Harrington, a spokesperson for Trump, said in a statement after the indictment was unsealed that prosecutors were trying to “harass everyone” connected to the former president and that the charges were part of a political vendetta.

Dunne pushed back on the notion that the investigation was politicized, telling the judge during Thursday’s arraignment that the grand jury that brought the indictment was unbiased and had no skin in the game.

“There is no clearer example of a company that should be held to account,” he said.

Editor’s note: A previous version of this story incorrectly stated that prosecutors allege that former President Trump signed tuition checks for Allen Weisselberg’s children. In fact, prosecutors allege that Trump paid the tuition of Weisselberg’s family members.

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Trump’s longtime ally Roger Stone has warned that the former president must prepare to be indicted for fraud in the coming weeks

Roger Stone, Donald Trump
Roger Stone, left, has predicted that former President Donald Trump, right, will be indicted.

  • Roger Stone has predicted that former President Donald Trump will be indicted, he said in an InfoWars interview.
  • The indictment would be on the grounds of “bank fraud or tax fraud,” Stone said.
  • Stone accused Manhattan prosecutors of “combing for a crime” in their wide-ranging criminal probe.
  • See more stories on Insider’s business page.

Roger Stone, a longtime friend, and erstwhile adviser to Donald Trump believes the former president will face an indictment imminently, Salon reported.

“I would be shocked if they did not come forward with a fabricated indictment for bank fraud or tax fraud against the former president [Donald Trump] by Manhattan District Attorney Cyrus Vance Jr.,” Stone said during an appearance on the far-right InfoWars website.

“If they want to go after the president on fabricated charges, then we will establish that this is a partisan witch hunt,” the GOP strategist, who was pardoned by Trump in 2020, told InfoWars host Alex Jones.

Read more: Meet Donald Trump’s next nemeses: The 16 New York prosecutors peppering the ex-president with history-making criminal probes

Stone argued that the indictment would likely be filed sometime around when the Republican-led effort to examine ballots in Maricopa County, Arizona, comes to an end.

“Don’t be surprised if the announcement comes at the same time that we learn the truth about Maricopa County, Arizona,” he said. “Don’t be surprised because I see that coming.”

Stone also alleged in the interview that those involved with the Manhattan district attorney’s criminal investigation into Trump are “combing for a crime” and referred to it as “disgraceful.”

Manhattan District Attorney Cyrus Vance Jr. has convened a grand jury as his office investigates whether the Trump Organization violated state law, The Washington Post reported Tuesday. This marks an aggressive new phase in Vance’s years-long investigation, Insider’s Sonam Sheth and Jacob Shamsian reported.

Legal experts suspect the inquiry is nearing its end, Sheth and Shamsian said.

The probe looks into the Trump Organization’s and former President Donald Trump’s finances, court records show.

Read the original article on Business Insider

The Manhattan DA’s assembling of a grand jury likely means its Trump investigation is in the ‘home stretch,’ former federal prosecutor says

Donald Trump
Former President Donald Trump.

  • The Manhattan DA has reportedly convened a grand jury in his Trump Org. investigation.
  • A former federal prosecutor said this appears to show the investigation is in an advanced stage.
  • Renato Mariotti said “charges are on the horizon,” though it doesn’t necessarily mean Trump will be.
  • See more stories on Insider’s business page.

A former federal prosecutor said the reports that Manhattan district attorney had assembled a grand jury is a sign that its investigation into former President Donald Trump was in its “home stretch.”

The Washington Post reported on Tuesday that Cyrus Vance Jr. has convened a grand jury as his office investigates whether the Trump Organization violated New York state law, among other major points of examination.

Renato Mariotti tweeted Tuesday: “The mere fact that a special grand jury was empaneled does not mean that any particular person will be charged. It does not necessarily mean that Trump himself will be charged.”

“But it is fair to say that Vance’s investigation is far along and that charges are on the horizon.”

“This is the second sign in recent days that Vance’s investigation has entered the home stretch.”

Read more: A grand jury has reportedly been convened in the Manhattan district attorney’s criminal investigation into Trump

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Manhattan DA prosecutors subpoenaed an elite Manhattan private school as part of its investigation into Trump

Donald Trump
Former President Donald Trump.

  • Manhattan prosecutors subpoenaed a private school for its Trump investigation, according to the Wall Street Journal.
  • It’s reportedly examining whether tuition payments for the Trump Organization’s CFO broke tax laws.
  • The school received more than $500,000 in tuition overall, according to Jennifer Weisselberg.
  • See more stories on Insider’s business page.

New York prosecutors have subpoenaed an elite private school in Manhattan as part of an investigation into former President Donald Trump and his Trump Organization, according to the Wall Street Journal.

Sources told the Journal that Columbia Grammar & Preparatory School was subpoenaed by prosecutors in the Manhattan District Attorney’s office.

Trump Organization CFO Allen Weisselberg’s grandchildren are students at the school. Prosecutors are reportedly trying to “flip” Weisselberg, who also oversees the Trump family’s finances, into cooperating with the investigation into irregularities in Trump’s and the Trump Organization’s finances.

Jennifer Weisselberg – the childrens’ mother – previously told Insider that Trump would include school tuition in the compensation package for her former husband, Barry Weisselberg. She is a cooperating witness in investigations from both the Manhattan District Attorney’s office and the New York Attorney General’s office.

Prosecutors may be examining whether the tuition arrangement allowed Barry or Allen Weisselberg to avoid paying taxes, according to the Journal.

Jennifer Weisselberg told the Journal that more than $500,000 in tuition was paid for with checks written either by Trump or Allen Weisselberg. But the records in her possession don’t show who made the payments, the Journal reported.

The subpoenas for the elite Upper West Side school will allow prosecutors to obtain copies of the transactions for tuition payments, which may tell them whether they came from Trump, Allen Weisselberg, Barry Weisselberg, the Trump Organization, or some other source.

Prosecutors in the Manhattan District Attorney’s office have already gone to the Supreme Court to subpoena reams of financial documents from the Trump Organization, including tax filings. They have also subpoenaed Allen Weisselberg’s bank records.

The Trumps and Weisselbergs have ties to Columbia Grammar

Michael Cohen, a former executive at the Trump Organization and personal lawyer for Trump, was previously the chairman of Columbia Grammar’s board. He helped make sure the Weisselberg grandchildren would be considered for admission, Jennifer Weisselberg previously told Insider.

The children of Jack Weisselberg, Allen Weisselberg’s other son, have also attended Columbia Grammar, according to the Journal.

Barron Trump, the former president’s youngest son, attended the school when he lived in New York City.

And the Trump Foundation – Donald Trump’s now-dissolved charity organization – donated $150,000 to the school between 2014 and 2016, according to the Journal’s review of tax filings.

donald trump jr allen weisselberg
Allen Weisselberg in 2016.

A court ordered the dissolution of the Trump Foundation in 2019, after New York Attorney General Letitia James brought a lawsuit accusing it of misusing funds.

James’s office is conducting its own investigation into Trump’s and the Trump Organization’s finances. It has made fewer public moves than the investigation from Manhattan District Attorney Cyrus Vance Jr. Vance is set to retire in December, and is widely expected to make a decision about whether to bring charges against Trump or the Trump Organization before then.

Trump faces numerous other legal headaches, including investigations into his conduct as president, lawsuits over sexual misconduct allegations, and an investigation in Georgia into his attempts to overturn the 2020 election results there.

In an earlier interview with Insider, Jennifer Weisselberg said the Trump Organization would pay employees like her former husband with perks like tuition and housing instead of cash as a way to control their lives.

“They want you to do crimes and not talk about it and don’t leave,” she said.

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The ex-daughter-in-law of Trump’s CFO handed over boxes of financial records and a laptop to Manhattan prosecutors

Trump
Donald Trump attends the D-day Commemorations on June 05, 2019 in Portsmouth, England.

  • Jennifer Weisselberg delivered boxes of financial records and a laptop to prosecutors Thursday.
  • Weisselberg is the ex-daughter-in-law of the Trump Organization’s longtime CFO Allen Weisselberg.
  • She is cooperating with investigations into Trump’s personal finances and those of his company.
  • See more stories on Insider’s business page.

Jennifer Weisselberg handed over boxes of financial records to investigators with the Manhattan District Attorney’s Office on Thursday as part of the investigation into former President Donald Trump’s finances.

Weisselberg is the ex-wife of Barry Weisselberg, son of the Trump Organization’s longtime Chief Financial Officer Allen Weisselberg. Weisselberg’s lawyer previously told Insider’s Jacob Shamsian that she was cooperating with the investigation and had “several boxes of documents” left to deliver.

Weisselberg was seen Thursday morning transporting three boxes of records as well as a laptop from her building, The Washington Post reported.

Duncan Levin, an expert in financial fraud and Weisselberg’s attorney, told Insider he was hired to help her sort through the documents and “turn over documents and information to law enforcement as is helpful.”

Read more: A Trump appointee who drank vodka and had sex on the General Services Administration building’s roof is back with a new political committee, documents show

“She has joint-bank-account information, credit cards, tax records, tax returns – that’s the meat of what we’re looking at to see what types of patterns we might be able to find,” he said.

The Manhattan District Attorney’s Office and the New York attorney general are conducting parallel investigations into Trump’s personal finances and those of the Trump Organization. Weisselberg is cooperating with both offices as they look into whether the former president manipulated the value of his assets for loan and tax purposes.

Weisselberg was married to Barry Weisselberg from 2014 to 2018, and obtained the documents through their divorce. In addition to being CFO at the Trump Organization, his father, Allen Weisselberg, also manages the Trump family’s personal finances.

According to The Post, a subpoena directed Weisselberg to turn over her ex-husband’s records, such as bank and credit card statements, related to the Trump Organization and Central Park’s Wollman Rink, which is run by the company and managed by Allen Weisselberg.

District Attorney Cyrus Vance Jr. has been trying to “flip” Allen Weisselberg and get him to cooperate with the investigation, The Post reported last month. Allen Weisselberg is believed to be a major focus of the criminal investigation into Trump’s finances, which could be in its final stages.

Have a news tip? Contact this reporter at kvlamis@insider.com.

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Manhattan DA’s probe ramps up, placing new scrutiny on Trump’s debt-ridden New York properties

trump tower debt buildings
Banks have now placed three of the four of former President Donald Trump’s real estate holdings on debt “watch lists,” CBS News said.

  • The Manhattan DA probe into former President Donald Trump is heating up, Insider reported on Friday.
  • The investigation is placing new scrutiny on Trump’s commercial properties.
  • Banks have placed three of the former president’s buildings on debt “watch lists,” CBS News said.
  • See more stories on Insider’s business page.

As Manhattan District Attorney Cyrus Vance Jr.’s probe into former President Donald Trump steps up a gear, four of Trump’s New York properties have come under renewed scrutiny.

Trump Tower, Trump International Hotel and Tower, 40 Wall Street, and Trump Plaza have missed lenders’ earning projections for five consecutive years, CBS News reported.

Banks have now placed three of the four real estate holdings on debt “watch lists,” the media outlet said.

Mortgage-payment processors have flagged the loans tied to these three properties due to consistent financial underperformance, CBS said.

Wells Fargo and other banks have told investors that reduced incomes on these holdings, due partly to the COVID-19 pandemic, could result in the properties not generating enough money to cover their mortgage payments, CBS News reported.

In addition to presenting Trump with financial troubles, investigations into these properties could also pose legal challenges.

The Manhattan District Attorney’s office has subpoenaed a New York property tax agency as part of the broad criminal probe, Reuters reported. Prosecutors are looking for signs of possible fraud, the media outlet said.

While Vance’s sprawling probe’s exact scope is not known, court filings suggest that he could be looking into whether Trump and the Trump Organization violated New York laws by manipulating the values of these commercial properties for tax and loan purposes.

The wide-ranging investigation into whether Trump or his businesses violated state tax laws could be reaching its conclusion imminently, Insider reported on Friday.

John Dean, President Richard Nixon’s White House counsel who played a major role in the Watergate scandal, said on Twitter that Trump could be indicted in just a matter of days.

“From personal experience as a key witness, I assure you that you do not visit a prosecutor’s office 7 times if they are not planning to indict those about whom you have knowledge,” Dean’s tweet said.

This refers to Michael Cohen, Trump’s former personal attorney, meeting with prosecutors for the seventh time this week. His latest meeting lasted for over two hours, NBC News reported.

Cohen, who was sentenced to three years in prison after pleading guilty to several felonies, has previously testified to Congress about Trump’s alleged financial mismanagement. In the 2019 testimony, Cohen said that Trump had manipulated the value of assets “when it served his purposes.”

Read the original article on Business Insider

Manhattan prosecutors could be in the final stages of their wide-ranging investigation into Trump’s finances

trump
Former President Donald Trump.

  • Manhattan DA Cyrus Vance Jr.’s investigation into Donald Trump’s finances is heating up.
  • Vance already has Trump’s taxes and recently hired a renowned prosecutor.
  • Some DOJ veterans expect potential charges before the end of the year, when Vance retires.
  • See more stories on Insider’s business page.

After a months-long battle with Donald Trump over his closely held tax returns, the Manhattan district attorney’s office may finally be in the end stages of its wide-ranging investigation into the former president’s financial dealings.

Trump has repeatedly refused to release his tax returns. But in February, prosecutors notched a major victory when the Supreme Court forced Trump to hand over thousands of pages of his financial information to the DA’s office.

The DA’s investigation is examining whether Trump or his businesses falsely reported the value of properties for tax and loan purposes, which would violate New York law. In the weeks since prosecutors obtained his financial records, the investigation has ramped up significantly, according to media reports and two former prosecutors who spoke to Insider.

“They mean business now,” one source told The New Yorker’s Jane Mayer. The person believed Manhattan district attorney Cyrus Vance Jr.’s investigation had stagnated while Trump was in office and prosecutors were fighting a court battle to get his taxes. But now, the source told Mayer, prosecutors’ questions have become “very pointed – they’re sharpshooting now, laser-beaming.”

“It hit me,” this person added. “They’re closer.”

The clues are there. Vance announced Friday he wouldn’t run for re-election. The move was widely expected, since Vance, who held the DA post since 2010, hasn’t raised funds ahead of this summer’s primary. His final day will be in December, and a former top deputy told Insider he believes Vance will want to make charging decisions before he leaves.

“Vance started the investigation,” Daniel Alonso, now a partner at Buckley LLP, told Insider. “I’m sure he is absolutely pressing to have a decision made on whether to prosecute anyone, whom to prosecute, and for what charges, by the end of the year.”

Jeffrey Cramer, a longtime former federal prosecutor who spent 12 years at the Justice Department, echoed that view and told Insider it wasn’t surprising that the investigation’s pace picked up after the Supreme Court ruling.

“You need documents and tax records to prove these cases. That’s how they rise and fall,” he said. “It’s not witness testimony and emails; those things give context to the money. But this case is all about following the money, so it comes down to the tax records, which prosecutors now have full access to.”

Representatives for Trump and the Trump Organization didn’t immediately respond to Insider’s request for comment for this story.

Vance recruited a veteran prosecutor who worked on organized crime cases

Vance is likely personally involved in the details of the Trump investigation, according to Alonso. Eight candidates are vying to be his successor, though, and Alonso said there’s “significant concern” in New York’s legal community that not all of them are “qualified to oversee a case of this magnitude.”

While virtually all of the candidates have criticized Trump at one point or another, they have mostly focused on local affairs in their campaigns. At a candidate forum in January, they demurred when asked how they’d handle the Trump case and largely avoided injecting political considerations into it.

In the meantime, Vance has set up an experienced team of white-collar prosecutors, including several of his own top officials. He also made the unusual decision in February to hire Mark Pomerantz, a former federal prosecutor who worked on organized-crime cases before joining the law firm Paul, Weiss as a white-collar criminal defense lawyer.

“The team was in very good shape,” Alonso said of Vance’s office. “But the fact that Pomerantz agreed to come into the case strikes me as an indication that there is definitely something substantial there to investigate.”

ProPublica reported in October 2019 that documents showed Trump appeared to keep two sets of books for his properties, suggesting potential financial fraud.

In November 2019, Mother Jones published an investigation that found that Trump might have fabricated a loan to avoid paying $50 million in income taxes. And The New York Times reported in 2018 that Trump used a series of dubious tax schemes to shield a $413 million inheritance from the IRS.

In 2019, an IRS whistleblower came forward and alleged that there were “inappropriate efforts to influence” the agency’s mandatory audit of Trump’s taxes. And late last year, The Times published another bombshell investigation showing that Trump paid just $750 in income taxes in 2016 and 2017.

Mark Pomerantz
Mark F. Pomerantz in 2008.

Cramer pointed to Pomerantz’s previous experience prosecuting organized crime cases – he secured the 1999 conviction of the mob boss John Gotti’s son – and said it could prove particularly useful to Vance’s office as it scrutinizes the Trump Organization.

“Obviously Trump wasn’t running an organized crime outfit. But there are some similarities, depending on how the enterprise, which is the Trump Organization in this case, was structured,” Cramer said.

He noted, however, that Pomerantz’s main value likely lies in his private sector experience.

“If you look at any of the good defense lawyers in the country, most of them are former prosecutors,” Cramer said. “Prosecutors make good defense lawyers because they know both sides of cases. They can wear different hats and that’s critical in helping put together a strong case.”

That said, Alonso cautioned that Vance may choose to not bring charges against Trump at all.

“In investigations of accounting fraud, usually prosecutors suspect, and might even believe, that the CEO has the requisite knowledge and intent, but can’t always prove it,” Alonso said.

The precise scope of Vance’s investigation is unclear, but court filings suggest the office could be examining whether Trump and the Trump Organization broke New York state tax laws by manipulating property values to obtain favorable tax rates and loan terms.

donald trump jr allen weisselberg
Donald Trump, Allen Weisselberg, and Donald Trump Jr.

Now that the Supreme Court has cleared the way for prosecutors to get Trump’s taxes, investigators have access to a potential treasure trove of information about the complex world of Trump’s business activities.

The tax returns themselves, as well as the communications about them, are at the very heart of the probe. Vance hired FTI, a forensic accounting firm, to help pore over the data. Alonso said it could take some time.

“In the main part of the investigation, which is about valuations and about potential tax, bank, and insurance fraud, from what we know in the public record, they need to analyze those millions of pages of documents that they picked up from Mazars,” Alonso said, referring to Trump’s accounting firm. “That’s not something that’s done overnight.”

By the end of the investigation, Alonso said, prosecutors will have a variety of paths to choose from depending on what they find.

“It might be that they charge the Trump organization itself, or one of its affiliated companies,” he said. “It might be that they charge the CFO Allen Weisselberg if he doesn’t cooperate. It might be that they charge one of the Trump children who helps manage the company. Or it might be that they charge a different executive. Or it might be nobody, at the end of the day.”

“If they can’t prove this case beyond a reasonable doubt, they shouldn’t be charging,” he added.

‘You’d better grab yourself some good lawyers’

In other parts of the investigation, prosecutors appear to be dotting I’s and crossing T’s.

Ralph Mastromonaco, an engineer who worked on Trump’s Seven Springs estate in upstate New York – the valuation of which is under scrutiny from prosecutors, according to the Wall Street Journal – was subpoenaed by Manhattan prosecutors in recent weeks. But he told Insider that everything he supplied to prosecutors was already in the public record and filed with the local township of Bedford.

John Dean, President Richard Nixon’s former White House counsel whose testimony about the Watergate scandal led to Nixon’s resignation, said Friday he believed Vance’s office could bring charges against Trump in just a matter of days.

trump flipped
Donald Trump.

Dean based his observation on a Reuters report that said Trump’s former lawyer and fixer, Michael Cohen, was going to meet with Manhattan prosecutors for the seventh time.

Cohen pleaded guilty to several felonies stemming from investigations into Trump by the Manhattan US attorney’s office and the special counsel Robert Mueller. He testified to Congress in 2019 that Trump repeatedly inflated or deflated the value of his assets for loan and tax purposes, respectively, and he has extensively cooperated with prosecutors.

In a Friday morning tweet, Dean wrote that based on “personal experience as a key witness I assure you that you do not visit a prosecutor’s office 7 times if they are not planning to indict those about whom you have knowledge. It is only a matter of how many days until DA Vance indicts Donald & Co.”

Cramer emphasized that the precise timeline of the DA’s investigation is still hard to gauge.

“But when the Manhattan DA’s office has your tax returns and they’re bringing in hired guns like Pomerantz who specialize in this type of work,” he said, “You’d better grab yourself some good lawyers.”

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Manhattan’s DA subpoenaed Steve Bannon’s fundraising records as part of a fraud investigation into his border-wall campaign, report says

steve bannon
Steve Bannon.

  • Manhattan’s DA has subpoenaed financial records relating to Steve Bannon, CNN reported. 
  • The DA is investigating Bannon’s use of funds donated as part of the We Build the Wall campaign.
  • Bannon was pardoned by Donald Trump last month, but he could still face state charges. 
  • Visit the Business section of Insider for more stories.

Manhattan’s district attorney has subpoenaed financial records from Steve Bannon’s crowdfunding campaign to build a wall across the US-Mexican border, sources told CNN. 

According to the report, subpoenas were issued to Wells Fargo, which held the money Bannon raised as part of the We Build the Wall fundraising drive, and GoFundMe, the online platform he used to raise donations. 

A spokesman for Manhattan’s district attorney declined to comment. 

The subpoenas were issued shortly after former President Donald Trump pardoned Bannon on federal conspiracy charges hours before he left the White House last month, according to CNN.

New Jersey’s attorney general has also launched a civil investigation into the We Build The Wall campaign, per CNN. 

Bannon had been charged by federal prosecutors last December along with three other men with defrauding donors out of $25 million in relation to the border-wall project. Bannon was accused of pocketing hundreds and thousands of dollars of the money for his own expenses, and diverting $1 million to pay an alleged co-conspirator. 

The three men involved in the project, and charged alongside Bannon, did not receive a pardon from Trump. All of the men charged have denied any wrongdoing.

But Trump’s presidential pardon only applies to federal charges, meaning that Bannon could still faces charges in a state court.

Insider has contacted Bannon’s attorney for comment. 

Bannon was formerly among the most influential people in Trump’s orbit, serving as campaign manager during Trump’s successful run for the White House in 2016, and afterward appointed White House chief strategist. 

He left the White House 2018, after he was quoted in an exposé by the author Michael Wolf insulting members of Trump’s family and likening the Trump Organization to a crime syndicate.

But the men repaired their relationship before Trump left office, and Bannon used his podcast last year to spread Trump’s false claims that the 2020 election was stolen from him. 

Read the original article on Business Insider