As former U.S. President Donald Trump goes to trial this week in the Senate on charges of inciting the Jan. 6 Capitol insurrection, criminal and civil investigations into his businesses are accelerating in New York.
Manhattan prosecutors probing Trump’s real-estate business for possible insurance and tax fraud have stepped up witness interviews in recent months and hired forensic accountants, four people familiar with the criminal probe told Reuters. A separate state attorney general’s civil probe into whether the business falsely reported property values got a boost on Jan. 29, when a New York Supreme Court judge ordered the Trump Organization to turn over documents.
A U.S. Supreme Court decision is expected soon on whether Manhattan District Attorney Cyrus R. Vance Jr can obtain eight years of Trump’s tax records and other financial information from accounting firm Mazars. Two people familiar with the district attorney’s criminal probe expect the court to act this month.
Both the district attorney and the attorney general are focused in part on whether Trump’s businesses improperly falsified values on real-estate assets to secure tax breaks, loans or other benefits.
Trump’s tax returns could provide compelling evidence in the criminal probe if they differ significantly from other financial statements reported by the Trump business, said Daniel Horwitz, a white-collar defense lawyer and former Manhattan prosecutor. But in addition to records, he said, prosecutors will likely need witnesses who could “testify about false documents and why they were falsified.”
Lawyers for the Trump Organization did not respond to requests for comment. The Trump Organization has denied in court filings that the company falsified property values, and has rejected other allegations being investigated by Manhattan District Attorney Vance and New York State Attorney General Letitia James.
Trump’s lawyers have tried to block the disclosure of his tax records by appealing the Manhattan district attorney’s request to the U.S. Supreme Court. Lower courts rejected an argument by Trump’s attorney that the request amounted to political “harassment.” Trump’s team has requested a stay of the Supreme Court proceedings. The high court normally acts quickly on such “emergency applications,” but Trump’s request has been pending since October. Another ruling in favor of the district attorney would clear the way for prosecutors to access the tax and financial records.
The Manhattan district attorney said in an August filing that the office is investigating “possibly extensive and protracted criminal conduct” at the Trump Organization. In a September filing, he said “mountainous” misconduct allegations could justify a grand jury probe into possible tax fraud, insurance fraud and falsifying business records. James’ office has filed a civil lawsuit to compel the Trump Organization to produce documents but has not alleged any crimes.
A spokesperson for Vance declined to comment. A spokesman for James’ office said the Trump Organization has turned over all the documents that prosecutors sought but declined to comment further on the inquiry.
The investigations face challenges. The Manhattan district attorney may struggle to prove that inaccurate property estimates amount to fraud because the standards for valuing properties vary, legal experts say. Such appraisals are also typically performed by outside parties, potentially putting distance between any controversial valuations and Trump’s businesses.
“There’s a lot of expertise to hide behind,” said Joshua Levine, a former assistant U.S. attorney in the Southern District of New York who now specializes in white-collar criminal and regulatory law in private practice.