As the Manhattan district attorney’s office intensifies Donald J. Trump’s criminal investigation, he left his ranks to recruit a prominent former federal prosecutor to help scrutinize financial negotiations at the former president’s company, according to several people with knowledge of the subject.
Former prosecutor Mark F. Pomerantz has deep experience in investigating and defending white collar and organized crime cases, reinforcing the team of prosecutor Cyrus R. Vance Jr. who is examining Trump and his family-owned company, the Trump Organization.
The investigation by Mr. Vance, a Democrat, is focused on possible tax and banking fraud, including whether the Trump Organization cheated its creditors or local tax authorities about the value of their properties to obtain loans and tax benefits, people with knowledge of the matter he said, asking for anonymity because of the delicate nature of the investigation. Mr Trump said he did nothing inappropriate and has long complained about the investigation, calling it a politically motivated “witch hunt”.
In recent months, Vance’s office has extended the lengthy investigation to include a series of financial transactions and Trump properties – including the Trump Tower on Fifth Avenue in Manhattan, several Trump hotels and the Seven Springs property in Westchester County – as prosecutors expect a United States Supreme Court decision that could give them access to Trump’s tax returns.
Prosecutors also interviewed several witnesses and issued more than a dozen new subpoenas, including one of Trump’s top creditors, Ladder Capital, people with knowledge of the matter said.
In addition, investigators subpoenaed a company hired by Trump’s other main lender, Deutsche Bank, to assess the value of certain Trump properties, said one of the people with knowledge of the previously unreported subpoenas.
Months earlier, Vance’s office had subpoenaed records from Deutsche Bank itself, The New York Times reported earlier. More recently, Deutsche Bank employees testified to Vance’s office about the bank’s relationship with the Trump Organization, said an informed person.
Still, despite the explosion in investigative activity, prosecutors said tax returns and other financial records are vital to the investigation – and the Supreme Court delayed the final decision by months.
Manhattan prosecutors also subpoenaed the Trump Organization for records related to tax deductions in millions of dollars in consulting fees, some of which appear to have gone to the daughter of former President Ivanka Trump.
The Trump Organization delivered some of these records last month, although prosecutors questioned whether the company responded fully to the subpoena, people with knowledge of the matter said.
Trump was acquitted in his second impeachment trial last week, but remains the focus of at least two state criminal investigations. In addition to the Manhattan investigation, prosecutors in Georgia are examining Trump’s efforts to persuade local officials to undo the election results. His departure left him without the prosecution shield provided by the presidency.
The Manhattan district attorney’s office has not accused Trump of wrongdoing and it is unclear whether Vance, whose term ends in January, will ultimately file charges against Trump or any Trump Organization officials.
The Trump Organization declined to comment, but in the past, the company’s lawyers said their practices were in line with the law and called the investigation a “fishing expedition”.
Pomerantz, 69, was sworn in earlier this month to serve as a special assistant prosecutor, according to Danny Frost, a spokesman for the prosecutor, who otherwise declined to comment on the investigation. Mr. Pomerantz will work exclusively on Trump’s investigation.
Hiring a stranger is a highly unusual move for a prosecutor’s office, but the two-and-a-half-year investigation of the former president and his family’s business is unusually complex. And Vance, whose office had some errors in other white-collar cases, had already hired FTI, a large consulting firm, to help analyze Trump’s financial records.
Prosecutors are examining whether the Trump Organization has artificially inflated the value of some of its exclusive properties to obtain the best possible loans, while simultaneously lowering property values to reduce property taxes, knowledgeable people said. Prosecutors are also reviewing the Trump Organization’s statements to insurers about the value of various assets.
The Trump Organization’s lawyers are likely to argue with prosecutors that it could not have deceived sophisticated financial institutions that did their own analysis of Trump’s properties without relying on what the Trump company told them. The firm’s lawyers must also emphasize that the practice of providing these different appraisals is common in New York’s real estate industry.
Deutsche Bank said it is cooperating with the investigation. A spokesman for Ladder Capital, which securitized loans years ago and therefore no longer owns them, declined to comment.
Mr. Pomerantz, who has been helping the case informally for months, took a temporary leave from law firm Paul Weiss to work at Mr. Vance’s office. Among other tasks, he is likely to handle interactions with key witnesses.
Mr. Vance also hired veteran constitutional lawyers to work on documents filed in the 18-month legal battle over the office’s subpoena for Trump’s tax returns and other financial records, which reached the United States Supreme Court twice. The case was defended by Vance’s attorney general, Carey Dunne, who is helping to conduct the investigation.
The court could decide for the second time on the matter soon, potentially putting eight years of Trump’s personal and corporate tax records and other documents in the hands of prosecutors for the first time, a development that Vance’s office deemed critical to its investigation.
Mr. Pomerantz, a leading figure in New York’s legal circles, was the secretary to Judge Edward Weinfeld in Manhattan and Judge Potter Stewart to the Supreme Court. He then became a federal prosecutor at the United States attorney’s office in Manhattan, where he led the appeal unit before leaving in 1982.
In private practice, he developed a specialty in organized crime and was involved in a 1988 case that helped determine the legal definition of extortion. Their former lawyer partner, Ronald P. Fischetti, estimated that they tried about 25 cases involving organized crime in one way or another.
Mr. Pomerantz returned to the Manhattan Attorney General’s office to head the criminal division between 1997 and 1999, overseeing major securities fraud and organized crime cases, perhaps most prominently against John A. Gotti, Gambino’s boss.
He later joined Paul Weiss, one of New York’s best-known law firms, where he defended Robert Torricelli, the New Jersey senator accused of campaign financing violations.
“He worked on both sides of the street, so he won’t be biased because of his temperament,” said Robert S. Litt, former general counsel to the Director of National Intelligence, who has known Pomerantz since 1976.
David Enrich contributed reports.