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New York D.A. Chides ‘Audacious’ U.S. Claim in Trump Tax Row

Manhattan D.A. Assails ‘Audacious’ U.S. Claim in Trump Tax Fight

(Bloomberg) -- Manhattan District Attorney Cyrus Vance Jr. took unusual public aim at federal prosecutors working just a block away, calling the Justice Department’s support of President Donald Trump in a subpoena fight over his tax returns “audacious,” especially considering that Vance’s office is carrying forward the Justice Department’s investigation and prosecution of Michael Cohen, the president’s former personal lawyer.

Vance was responding to a U.S. court filing on Wednesday supporting Trump’s request for a delay in enforcing a grand jury subpoena seeking tax filings and other documents from his accountants, Mazars USA LLP. Trump sued Vance and Mazars last month trying to block the subpoena, which seeks evidence in an investigation of hush payments made to adult film star Stormy Daniels former Playboy model Karen McDougal.

Manhattan U.S. Attorney Geoffrey Berman’s office last year charged Cohen with coordinating payments to Clifford and McDougal at the direction of Trump, whom federal prosecutors famously referred to as “Individual 1” in court papers. Cohen pleaded guilty last year to campaign-finance violations, tax evasion, bank fraud and lying to Congress. He’s serving a three-year sentence. Berman recused himself from the case, which was pursued by other lawyers in the office.

In the Vance litigation, the Justice Department has sided with Trump over another set of prosecutors seeking to further the federal investigation in Manhattan into payments made on the instructions of Individual 1. Justice Department lawyers say the president should have the opportunity to make arguments that, if accepted by the judge in the case, would mean that the Cohen investigation was probably unconstitutional.

Vance’s investigation is focused on determining whether business records were falsified to hide the nature of the payments, which were made before the 2016 presidential election. Trump sued Vance and Mazars in his individual capacity, not as president of the U.S. Mazars has taken no position in the case, saying it will comply with whatever the courts order it to do.

“For more than a year, DOJ prosecutors in this very district conducted a highly publicized grand jury investigation into some of the very same transactions and actors that have been reported to be at issue in this matter,” lawyers from Vance’s office said in the letter, referring to a U.S. probe into the payments. Trump’s “only goal in this litigation, now supported by the DOJ itself, is to obtain as much delay as possible, through litigation, stays and appeals. If delays are achieved, to the frustration of the New York state inquiry,” Trump will effectively win, they said.

Dawn Dearden, a spokeswoman for Berman, didn’t immediately respond to an email seeking comment on the letter. The Justice Department didn’t immediately return an email seeking comment.

The Justice Department, in its filing in support of Trump on Wednesday, asked for a delay to allow his lawyers to address the “weighty constitutional issues” involved in the case, including that he enjoys broad constitutional immunity from criminal investigation into his affairs, his businesses and the people who worked for him before he became president. Justice Department lawyers also supported Trump’s argument that the case should be decided in federal court rather than state court, where Vance argued it should be heard. The government didn’t specifically endorse Trump’s claims for immunity from investigation.

The court filing was made by five senior lawyers from Attorney General Bill Barr’s Justice Department, Berman and Berman’s top deputy for civil litigation. The filing was notable because Berman leads a group of federal prosecutors in the Manhattan U.S. attorney’s office, which has long been known for operating with a measure of independence from “Main Justice” in Washington.

Under a deal worked out between Trump’s personal attorneys and Vance’s office, Trump’s accountants must turn over documents to prosecutors beginning on Oct. 7, or two days after a judge is to rule on the president’s request to block the subpoena, whichever comes first. But that won’t apply if U.S. District Judge Victor Marrero in Manhattan blocks the request.

The case is Trump v. Vance, 19-cv-08694, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, David S. Joachim

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