Manhattan prosecutors advance investigation into Trump’s estate in Seven Springs

Trump valued the property at up to $ 291 million in financial statements that the New York attorney general’s office, which is also investigating Seven Springs, said it had been turned over to financial institutions. Raising assets to help secure loans or other financial benefits could be a state criminal offense, legal experts said.

The Seven Springs scrutiny is part of a broader criminal investigation into Trump, his company and its directors, which also includes financial negotiations on properties such as Trump’s flagship Trump Tower in Manhattan, the Wall Street Journal previously reported. Outside New York, prosecutors are also examining a loan for the Trump International Hotel and Tower Chicago, people familiar with the matter said, which CNN previously reported.

Manhattan prosecutor Cyrus Vance’s office said in lawsuits that it is investigating possible tax, insurance and banking fraud. Investigators now have Trump’s tax returns and other financial records after an 18-month court dispute, allowing prosecutors to compare Trump’s statement to creditors with their representations to tax authorities.

Prosecutors in recent weeks have sent subpoenas to attorney Charles Martabano and engineer Ralph Mastromonaco, both involved in planning the Trump Organization’s proposal for Seven Springs, people said.

Mr. Mastromonaco confirmed that he had received a subpoena and said that he had delivered materials from the district attorney’s office, including communications with others involved in the project.

The prosecutor’s office also requested recordings of the planning council meetings in Bedford, NY, one of the three cities where the Seven Springs property is located, people familiar with the matter said. Messrs. Mastromonaco and Martabano attended the board with Mr Trump’s son, Eric Trump, in 2012 and 2013, as shown in the minutes of the meetings.

The lawyers for Trump and the Trump Organization did not respond to requests for comment. Last month, after the United States Supreme Court denied Trump’s efforts to prevent Vance, a Democrat, from obtaining his tax returns, Trump, in a written statement, called the investigation a “continuation of the biggest hunt for political witches in our country’s history. “

Prosecutors’ interest in the local planning process may be related to the valuation of the property and whether it has been incorrectly inflated in financial documents, the lawyers said. Mr. Trump valued the property at $ 291 million in 2012, according to what he called a “statement of financial condition”, a collection of financial information compiled but not audited by his accountants. Mr. Trump valued the property between $ 25 million and $ 50 million based on the financial disclosure paperwork presented when he was president.

Local tax valuation lists indicate the property’s market value at about $ 19 million.

The new subpoenas add to the picture of what is known about Vance’s investigation. Prosecutors have already sent subpoenas to some of Trump’s creditors and a longtime insurance broker.

The district attorney’s office hired Mark Pomerantz, a former federal prosecutor now on leave from Paul, Weiss, Rifkind, Wharton & Garrison LLP, to work on the investigation, according to people familiar with the matter. A spokesman for Vance said Pomerantz was sworn in last month as a special assistant prosecutor.

The firm also hired FTI Consultoria Inc.

to do the forensic accounting work on the case, people familiar with the matter said. An FTI spokesman declined to comment.

Manhattan prosecutors’ interest in Seven Springs dates back to at least December, when they sent a different batch of subpoenas to the three cities, the Journal reported. The subpoenas asked the authorities in Bedford, North Castle and New Castle to provide information on tax assessments, city communications and minutes from the planning council, local officials said.

Since then, cities have delivered the materials, local officials said.

The information prosecutors requested focused on a year-long effort to obtain the local approvals needed to build a subdivision of luxury homes after Trump’s original plan to build a golf course in Seven Springs failed in the early 2000s. The subdivision effort dates back to at least 2004 and continued until 2013, according to the planning and zoning board documents.

In 2015, the Trump Organization discarded development plans, opting to place 158 acres of land in a conservation easement, or land that an owner agreed not to develop.

The final assessment, sent to Mr. Trump in 2016, values ​​the property at $ 56.5 million and the conservation easement share at $ 21.1 million. Seven Springs LLC, which is part of the Trump Organization, claimed a $ 21.1 million tax deduction for easement in fiscal 2015, an attorney from the attorney general’s office said in court.

New York Attorney General Letitia James, who in 2019 opened a civil fraud investigation into Trump and his company, said her office is investigating conservation easement in Seven Springs. The Trump Organization called the investigation of James, a Democrat, politically motivated.

Write to Corinne Ramey at [email protected]