Manhattan prosecutors may be in the final stages of Trump’s investigation

• Manhattan DA Cyrus Vance Jr.’s investigation into Donald Trump’s finances is heating up.
• Vance already has Trump’s taxes and recently hired a renowned prosecutor.
• Some DOJ veterans expect possible charges before the end of the year, when Vance retires.
• See more stories on the Insider business page.

After a months-long battle with Donald Trump over his income tax returns, the Manhattan district attorney’s office may finally be in the final stages of his extensive investigation into the former president’s financial negotiations.

Trump has repeatedly refused to release his tax returns. But in February, prosecutors won a major victory when the Supreme Court forced Trump to hand over thousands of pages of his financial information to the prosecutor’s office.

The prosecutor’s investigation is examining whether Trump or his businesses falsely reported the value of properties for tax and loan purposes, which would violate New York law. In the weeks since prosecutors obtained their financial records, the investigation has increased significantly, according to media reports and two former prosecutors who spoke to Insider.

“They mean business now,” a source told Jane Mayer of The New Yorker. The person believes that prosecutor Cyrus Vance Jr.’s investigation stalled while Trump was in office and prosecutors were waging a legal battle to get their taxes. But now, the source told Mayer, prosecutors’ questions have become “very punctual – they are shooting with precision now, using laser beams”.

“It hit me,” added that person. “They are closer.”

The clues are there. Vance announced on Friday that he would not run for re-election. The change was widely expected, as Vance, who has held the position of DA since 2010, did not raise funds before this summer’s primaries. His final day will be in December, and a former deputy told Insider that he believes Vance will want to make charging decisions before he leaves.

“Vance started the investigation,” Daniel Alonso, now a partner at Buckley LLP, told Insider. “I am sure he is absolutely pushing for a decision to be made about prosecuting someone, who to prosecute and by what charges, by the end of the year.”

Jeffrey Cramer, a longtime former federal prosecutor who spent 12 years at the Justice Department, shared that opinion and told Insider that it was not surprising that the pace of the investigation had accelerated after the Supreme Court decision.

“You need documents and tax records to prove these cases. That’s how they go up and down, ”he said. “This is not about testimony from witnesses and emails; these things contextualize the money. But this case is about following the money, so it comes down to tax records, to which prosecutors now have full access.”

Representatives from Trump and the Trump Organization did not immediately respond to Insider’s request for comment on this story.

Vance recruited a veteran prosecutor who worked on organized crime cases

Vance is probably personally involved in the details of Trump’s investigation, according to Alonso. Eight candidates are competing to be his successor, however, and Alonso said there is “significant concern” in the New York legal community that not all of them are “qualified to oversee a case of this magnitude”.

While virtually all candidates have criticized Trump at one point or another, they have focused mainly on local issues in their campaigns. At a candidate forum in January, they objected when asked how they would handle the Trump case and avoided injecting political considerations into it.

Meanwhile, Vance has assembled an experienced team of white-collar prosecutors, including several of his own senior officials. He also made the unusual decision in February to hire Mark Pomerantz, a former federal prosecutor who worked on organized crime cases before joining Paul Weiss as a white-collar criminal defense attorney.

“The team was in very good shape,” said Alonso of Vance’s office. “But the fact that Pomerantz agreed to participate in the case strikes me as an indication that there is definitely something substantial there to investigate.”

ProPublica reported in October 2019 that documents showed that Trump appeared to keep two sets of books from his properties, suggesting potential financial fraud.

In November 2019, Mother Jones published an investigation that found that Trump may have fabricated a loan to avoid paying $ 50 million in income tax. And The New York Times reported in 2018 that Trump used a series of dubious tax schemes to protect a $ 413 million inheritance from the IRS.

In 2019, an IRS whistleblower came forward and claimed that there were “inadequate efforts to influence” the agency’s mandatory audit of Trump’s taxes. And at the end of last year, The Times published another bombshell investigation showing that Trump paid just $ 750 in income tax in 2016 and 2017.

Chris Hondros / Getty Images

Cramer cited Pomerantz’s previous experience in prosecuting organized crime cases – he secured the conviction of the son of mafia boss John Gotti in 1999 – and said that this could be particularly useful for Vance’s office as it examines the Trump Organization.

“Obviously, Trump did not run an organized crime organization. But there are some similarities, depending on how the company, which in this case is the Trump Organization, was structured,” said Cramer.

He noted, however, that Pomerantz’s main value is likely to be in his experience in the private sector.

“If you look at any of the country’s good defense lawyers, most of them are former prosecutors,” said Cramer. “Prosecutors are good defense lawyers because they know both sides of the cases. They can take on different roles and that is critical to helping build a strong case.”

That said, Alonso warned that Vance may choose not to make any charges against Trump.

“In accounting fraud investigations, prosecutors generally suspect, and may even believe, that the CEO has the necessary knowledge and intent, but cannot always prove it,” said Alonso.

The precise scope of Vance’s investigation is unclear, but court documents suggest that the office could be examining whether Trump and the Trump Organization violated New York state tax laws by manipulating property values ​​to obtain tax rates and terms of service. favorable loan.

TIMOTHY A. CLARY / AFP via Getty Images

Now that the Supreme Court has paved the way for prosecutors to receive Trump’s taxes, investigators have access to a potential treasure trove of information about Trump’s complex world of business activities.

Tax returns themselves, as well as communications about them, are at the center of the investigation. Vance hired FTI, a forensic accounting firm, to help analyze the data. Alonso said it could take some time.

“In the main part of the investigation, which is about assessments and possible tax, banking and insurance fraud, as far as we know in the public record, they need to look at those millions of pages of documents they took from Mazars,” Alonso said, referring to to Trump’s accounting firm. “This is not something that is done overnight.”

At the end of the investigation, Alonso said, prosecutors will have a variety of paths to choose from, depending on what they find.

“It could be that they charge from the Trump organization itself or from one of its affiliated companies,” he said. “It may be that they cover CFO Allen Weisselberg if he doesn’t cooperate. It may be that they accuse one of Trump’s sons who helps run the company. Or it may be that they accuse a different executive. Or it may be nobody, at the end of the day. “

“If they can’t prove this case beyond reasonable doubt, they shouldn’t be charging,” he added.

‘You’d better get some good lawyers’

In other parts of the investigation, prosecutors appear to be scoring I’s and crossing T’s.

Ralph Mastromonaco, an engineer who worked on Trump’s estate in Seven Springs, upstate New York – whose assessment is under scrutiny by prosecutors, according to the Wall Street Journal – has been subpoenaed by prosecutors in Manhattan in recent weeks. But he told Insider that everything he provided to prosecutors was already on the public record and was filed with the local Bedford council.

John Dean, a former attorney for President Richard Nixon at the White House, whose testimony about the Watergate scandal led to Nixon’s resignation, said on Friday that he believed Vance’s office could open charges against Trump in a matter of days.

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Dean based his observation on a Reuters report that said former Trump attorney and broker Michael Cohen would meet with Manhattan prosecutors for the seventh time.

Cohen pleaded guilty to several crimes stemming from the Trump investigations carried out by Manhattan’s attorney general and special attorney Robert Mueller. He testified in Congress in 2019 that Trump repeatedly inflated or deflated the value of his assets for loan and tax purposes, respectively, and he cooperated extensively with prosecutors.

In a Friday morning tweet, Dean wrote that based on “personal experience as a key witness, I guarantee that you will not visit the prosecutor’s office 7 times if he is not planning to indict those of whom you are aware. It is just a matter of how many days until DA Vance indict Donald & Co. “

Cramer emphasized that the precise timing of the prosecutor’s investigation is still difficult to assess.

“But when the Manhattan prosecutor’s office receives your tax returns and brings in gunmen like Pomerantz, who specialize in this type of work,” he said, “you better get some good lawyers.”