Trump and his company being investigated for bank fraud, Manhattan prosecutors suggest

'Public reports of possibly extensive and protracted criminal conduct' at president's company justify subpoena for tax records, district attorney argues

Alex Woodward
New York
Monday 03 August 2020 13:55 BST
Trump says Supreme Court ruling on his taxes is a 'witch hunt'

Donald Trump and his company may be the subject of New York prosecutors’ deeper inquiry into possible bank fraud, according to new court filings.

District attorney Cyrus Vance is seeking to dismiss the president’s lawsuit that aims to shield him from disclosing his financial records. He called the lawsuit ”baseless” and claimed it “utterly failed” to prove a bad faith argument that was previously made to the court.

Mr Vance’s district court filings point to ”undisputed” news reports about the president’s businesses and his wealth that would justify a legal basis for a subpoena to probe those records, but the office did not identify the explicit focus of its investigation.

In 2019, the office subpoenaed the president’s accounting firm Mazars USA for eight years of personal and business tax filings – which the president has refused to make public – following a criminal investigation into “hush money” payments arranged by the president’s former attorney Michael Cohen in an attempt to quash accusations from adult film star Stormy Daniels, who alleged having an affair with the president.

The president’s legal team has argued that the president has an executive “immunity” from complying with the subpoena in a state-level criminal case, an argument that the US Supreme Court rejected last month and deferred to a lower court.

Mr Vance rejected the president’s ”conspiratorial assertion” that the district attorney’s subpoena’s similarity with subpoenas issued by Congress means it was issued in “bad faith”.

“The Mazars subpoena seeks information about potential financial misconduct that has been publicly reported, and in part adopts language from one of the congressional subpoenas,” the office wrote in a memorandum attached to its motion. “As Congress has asserted, its subpoena was seeking information relating to those same public allegations for Congress’ own legislative purposes ... It makes perfect sense that the subpoenas seek the same information, as they both relate to public reports about the same potentially improper conduct.”

In his February 2019 testimony to Congress, Cohen alleged that the president had “inflated his total assets when it served his purposes ... and deflated his assets to reduce his real estate taxes.”

Asked explicitly by New York congresswoman Alexandria Ocasio-Cortez whether the president ever provided “inflated assets to an insurance company”, Cohen answered affirmatively.

In its filing on Monday, the district attorney’s office said “public allegations of possible criminal activity at [the president’s] New York County-based Trump Organisation ... describe transactions involving individual and corporate actors based in New York County, but whose conduct at times extended beyond New York’s borders.”

Following “public reports of possibly extensive and protracted criminal conduct” at the company, there was nothing “improper” or “even particularly unusual” about the subpoena, the filings said.

The district attorney’s office also rejected the president’s claims that the subpoena arrived ”at a time when ... Democrats had become increasingly dismayed over their ongoing failure ‘to get their hands on the long-sought after documents.’”

“From this assertion, [the president] would apparently have the court infer that the office is colluding with news reporters and unspecified ‘Democrats’ to make the requested records public,” according to the filing.

Those records, if obtained, aren’t likely to become public unless attached to a criminal court filings as part of a trial.

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