Can Trump Outmaneuver New York’s Criminal Probes?

Two powerful New York prosecutors are now conducting a joint investigation into the possibility that the Trump Organization committed crimes — a development that heightens the legal stakes and possible consequences for a former president who still wields substantial influence over his splintered political party from a perch at his Florida golf resort.

New York State Attorney General Letitia James, who had been conducting a civil probe of the Trump Organization, disclosed publicly late Tuesday evening to CNN that she had reshaped her investigation into a criminal prosecution. James’s office said it had already notified the company to that effect and said it had also joined forces with Manhattan District Attorney Cyrus Vance, whose office has its own longstanding criminal investigation of the Trump Organization under way.

Unlike civil cases, which can generally result in fines and other similar penalties, criminal cases carry the threat of a prison sentence if a defendant is found guilty. For that reason, a successful criminal prosecution has to demonstrate a defendant’s “intent” to commit a crime – proof of acting with the knowledge that he or she broke the law. It’s a higher legal threshold for prosecutors to overcome, because the penalty imposed is more serious.

All of which suggests that James wouldn’t have converted her case into a criminal prosecution unless she believes she has convincing evidence demonstrating intent. It’s also unusual for prosecutors from different offices to pair up in an investigation. They are normally fiercely protective of their cases, independence and prerogatives. That suggests that James and Vance each believes the other brings unique and added value to their investigations.

Over the years, Donald Trump has managed to maneuver past the threat of personal bankruptcysexual assault accusations, an intensive federal investigation and two impeachments. The New York probes may prove to be more difficult for Trump and his company to overcome, though there is still only limited knowledge about their progress and findings.

Vance has been investigating Trump and his company since 2018 for possible tax fraud and falsification of business records, according to appellate court filings. He is also examining whether Trump inflated the value of his properties and other assets in order to secure funds from lenders and investors, while lowballing those same valuations elsewhere to snare tax benefits.

After a court battle, Vance successfully secured eight years of Trump’s personal and business tax returns, and has hired forensic investigators to examine those and other financial records. Vance’s inquiry reportedly began as an examination of the Trump Organization’s payment of hush money to two women who allegedly had sexual encounters with Trump, and has since expanded.

James’s investigation began in 2019 and has focused on whether the Trump Organization and the Trump family manipulated valuations of their assets to secure funding or engineer tax benefits. Among the properties James has zeroed in on are 40 Wall Street in Manhattan, the Trump International Hotel and Tower in Chicago, a Los Angeles golf club and an 212-acre estate in Bedford, New York, known as Seven Springs.

The Washington Post reported that James notified the Trumps in late April that her investigation had converted into a criminal probe, and it’s not clear why her office decided to disclose that fact Tuesday evening. The Trumps have played hardball with James’s team, by refusing to comply with subpoenas and openly criticizing her investigation as groundless and politically motivated. One of the former president’s sons, Eric, initially refused last year to be deposed by James’s office until after the presidential election in November. A New York judge wound up ordering Eric to sit for a deposition before then.

James’s lawyers deposed the Trumps’ longtime accountant, Allen Weisselberg, last year but the interview ended prematurely after they asked if he had already testified before a grand jury

Weisselberg has worked for the Trump Organization since the 1970s and knows where all of the financial bodies are buried. Vance’s office has also targeted him in what appears to be an effort to flip him and secure his testimony against Trump. Weisselberg has been fiercely loyal to Trump over the years, though he must also be well aware that loyalty flows only one way in Trump’s world. If James and Vance continue to pressure  Weisselberg, and his own legal exposure worsens, he may end up testifying against the former president.

Other lawsuits and investigations are swirling around Trump, including a criminal probe in Georgia related to election interference in the state. But the New York investigations pose the greatest existential threat, prompting speculation that Florida Governor Ron DeSantis, a Trump supporter, might seek to block a judicial order extraditing the former president to New York to stand trial if he’s indicted.

It’s not clear that DeSantis actually has the power to pull that off. Besides, summer is upon us and Trump usually decamps from Palm Beach to spend the warmer months at his golf club in Bedminster, New Jersey. And New Jersey is right next door to New York, making extradition that much easier.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Timothy L. O'Brien is a senior columnist for Bloomberg Opinion.

©2021 Bloomberg L.P.

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