New York AG's Office says its probe of the Trump Organization is now 'criminal' and will work with Manhattan DA Cy Vance in his ongoing fraud investigation

  • NYAG Letitia James announced she is also investigating Trump Organization for criminal offenses 
  • She has been investigating the company since 2019 for civil violations
  • They included inflating assets for the purposes of loans  
  • Manhattan DA Cyrus Vance launched a criminal investigation in 2018 
  • His initial focus was on hush money payments to Stormy Daniels but it has widened to tax evasion and fraud
  • The two offices have teamed up to work together, which is an unusual legal step 
  • Michael Cohen, Trump's former lawyer, triggered James' initial probe  

By Harriet Alexander For Dailymail.com

Published: | Updated:

New York's attorney general is now investigating the Trump Organization for criminal offenses, it emerged on Tuesday night.

The office, led by Letitia James, had been investigating the company for civil tax offenses since early 2019. but the investigation has now escalated.

'We have informed the Trump Organization that our investigation into the Organization is no longer purely civil in nature,' said Fabien Levy, a spokesman for the office. 

'We are now actively investigating the Trump Organization in a criminal capacity, along with the Manhattan DA.'

The district attorney's office, led by Cyrus Vance, has been investigating possible criminal tax fraud since 2018.  

A person familiar with the investigation told CNN that several investigators with the James's office, who are considered experts on the Trump Organization, have joined Vance's team.  

The notice from James’s office was sent in late April to attorneys for the Trump Organization, The Washington Post said. 

Trump, seen Tuesday in NYC, has been told his organization is under criminal investigation
Letitia James, the attorney general of New York, has ramped up her investigation

Trump, seen Tuesday in NYC, has been told his organization is under criminal investigation

THE INVESTIGATIONS INTO TRUMP ORGANIZATION 

New York State AG Civil - 2019

NY State AG Letitia James launched a civil probe into the Trump Organization in 2019, after Michael Cohen - Trump's former attorney - testified at Congress. 

At first, the focus was whether or not the charity inflated the value of its assets while seeking loans and insurance coverage. 

James campaigned on the promise that she would investigate Trump and his family, which some experts say may impact how credible any charges may be because it undermines her impartiality. 

Manhattan DA criminal - 2018 

Manhattan DA Cyrus Vance launched his investigation in 2018. 

He wanted specifically to focus on hush money payments given to Stormy Daniels by Michael Cohen during the 2016 election. 

In court filings, his office has indicated he has widened the scope of his investigation to also include tax evasion and fraud. 

Michael Cohen
Stormy Daniels

 

NY State AG Criminal - 2020 

It's unclear what James' office will focus their investigation on but they say they're joining Vance's. 

The NYAG has a more limited remit when it comes to what she can bring charges for. 

'Although NYAG is best known for its civil enforcement work, it also has criminal enforcement authority in a number of areas, including securities fraud and tax fraud, ' former prosecutor Harry Sandick explained to The Washington Post. 

'In addition, they should be able to prosecute those who make false statements in the course of their investigations.'

Some have suggested that the announcement may just be a tactic to get others who are on the cusp of cooperating to agree to. 

'The timing of the announcement may serve to heighten the pressure on persons who may be on the cusp of cooperating, and who now see more clearly that a unified demonstration of coordination, pooling of resources and resolve by the two prosecutor offices intensifies the criminal probe.'   

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It suggested that criminality could apply to actions by current and former company executives and employees if the investigation finds wrongdoing, a source told the paper.

It was not immediately clear why the two law enforcement agencies are now collaborating years into their previously separate investigations. 

Partnerships between the two New York law enforcement offices are rare. 

Trump has previously called the New York attorney general's investigation politically motivated, and Eric Trump - who has spoken to James's team - responded to The Washington Post's request for comment with a video montage of James criticizing his father. 

Trump was in New York City on Monday and Tuesday, having left Florida for the summer. 

Much of the attention at the moment from Vance appears focused on the chief financial officer for the Trump Organization, Allen Weisselberg, and attempts to encourage him to 'flip' on his longtime boss. 

Sources told the Wall Street Journal last week that Vance's office has issued a subpoena against Columbia Grammar & Preparatory School over $500,000 in fee payments made for Weisselberg's grandchildren. 

Those payments were made between 2012 and 2019 using checks signed by both Trump and Weisselberg, it is claimed. 

They are said to have been made as a form of financial assistance to Weisselberg's son Barry and his ex-wife Jessica so their two children could attend the school. 

Barry managed Trump's ice rink in New York's Central Park on a salary of $223,000, until the city officials axed their contract with the ex-president this year.

Pomerantz, a 'mob-busting' prosecutor, has been brought in by Vance to investigate Trump

Pomerantz, a 'mob-busting' prosecutor, has been brought in by Vance to investigate Trump

He claims not to have been able to afford for his children to pay to attend Columbia Grammar & Prep, located on New York's Upper West Side. 

His former spouse Jennifer has claimed they believed the school fees were part of Barry's payment package. 

Vance's investigation is said to center on whether the fee payments should have been flagged as gifts or loans, rather than as 'financial assistance.' 

If so, they should have incurred tax, meaning the Weisselbergs may have evaded their dues to the IRS with the payment arrangement.

The school has indicated it will comply with the prosecutor's request. 

Weisselberg has not been accused of or charged with any crime, and Trump has denied all allegations of wrongdoing. 

Another key figure in Vance's investigation is Trump's former lawyer Michael Cohen, who has met with Vance and his team at least nine times.  

Cohen, 54, began working for the Trump Organization in 2006, and in 2018 was sentenced to three years for his role assisting tax evasion and campaign finance fraud. Cohen was released in April 2020. 

In a recent interview with Cohen, investigators asked questions about Trump's Seven Springs estate as part of an inquiry into whether the value of the 213-acre Westchester County property was improperly inflated to reduce his taxes.

The Associated Press reported that investigators asked Cohen about individuals involved in the appraisal of the estate and benefits derived from its valuation, including a $21 million income tax deduction.

Cohen was released to home confinement last year amid coronavirus fears, and his recent meetings have been conducted via video conference.

In a recent interview with Cohen, investigators asked questions about Trump's Seven Springs estate as part of an inquiry into whether the value of the 213-acre Westchester County property was improperly inflated to reduce his taxes.

In a recent interview with Cohen, investigators asked questions about Trump's Seven Springs estate as part of an inquiry into whether the value of the 213-acre Westchester County property was improperly inflated to reduce his taxes.

Vance recently hired former mafia prosecutor Mark Pomerantz - who, as a federal prosecutor, oversaw the prosecution of Gambino crime boss John Gotti - as a special assistant district attorney to assist in the wide-ranging probe of Trump's finances.

The inquiry, according to court filings, includes an examination of whether Trump or his businesses lied about the value of assets to gain favorable loan terms and tax benefits. 

The district attorney also is scrutinizing hush-money payments paid to women on Trump's behalf.

After a lengthy legal battle, his office is now in possession of eight years of Trump's tax records, including final and draft versions of tax returns, source documents containing raw financial data and other financial records held by his accounting firm.

The Supreme Court on February 22 ruled that Vance's team should have access to the documents. 

Vance's focus on Seven Springs involves an environmental conservation arrangement Trump made in return for a tax deduction at the end of 2015, following failed attempts to turn the property into a golf course and luxury homes.

Trump granted an easement to a conservation land trust to preserve 158 acres and received a $21 million income tax deduction, equal to the value of the conserved land, according to records. 

The amount was based on a professional appraisal that valued the full Seven Springs property at $56.5 million as of December 1, 2015.

That was a much higher amount than the evaluation by local government assessors, who said the entire estate was worth $20 million. 

Trump bought the property, including a palatial Georgian-style mansion that once belonged to the family of newspaper publisher Katharine Graham, for $7.5 million in 1995.

Vance announced in April that he would leave office at the end of the year and not seek reelection, but in a memo to staff, he stressed that the investigation would not stop.

'The work continues,' Vance wrote, echoing his short statement after the U.S. Supreme Court ruled last month that he could have Trump's tax records.

All the president's men indicted and convicted of crimes

ARRESTED AND INDICTED: STEVE BANNON 

Arrested and indicted on August 20, 2020, Steve Bannon and three others are accused of ripping off donors who wanted to self-fund President Donald Trump's proposed border wall. 

Bannon and his accomplices 'orchestrated a scheme to defraud hundreds of thousands of donors,' federal prosecutors alleged. 

Bannon, the former head of Breitbart News, joined Trump's 2016 campaign in August of that year alongside longtime Republican pollster Kellyanne Conway.

He became the campaign's CEO and pushed Trump to pursue scorched earth tactics like bringing Bill Cilnton's #MeToo accusers to the second presidential debate to help the campaign weather the fallout from the infamous 'Access Hollywood' tape. 

The political aide was named chief strategist and senior counselor when Trump moved into the White House. Bannon only lasted in that position until August 2017. 

GUILTY: ROGER STONE 

Convicted in November 2019 on seven counts including obstruction of justice, witness tampering, and lying to Congress about his communications with WikiLeaks. 

Stone's sentencing was controversial because the Department of Justice pushed for a lighter sentence than what the D.C. U.S. Attorney's office put forward. Trump was publicly complaining about the case. 

In February, Stone was sentenced to 40 months, though never served any jail time, as Trump commuted his sentence in July. Stone had publicly fretted about going to jail during the coronavirus crisis. Stone had been a person of interest in Special Counsel Robert Mueller's probe long before his January 2019 indictment, thanks in part due to his public pronouncements as well as internal emails about his contacts with WikiLeaks.

In campaign texts and emails, Stone communicated with associates about WikiLeaks following reports the organization had obtained a cache of Clinton-related emails. According to the federal indictment, Stone gave 'false and misleading' testimony about his requests for information from WikiLeaks. He then pressured a witness, comedian Randy Credico, to take the Fifth Amendment rather than testify, and pressured him in a series of emails. 

Following a prolonged dispute over testimony, he called him a 'rat' and threatened to 'take that dog away from you', in reference to Credico's therapy dog, Bianca. Stone warned him: 'Let's get it on. Prepare to die.' 

GUILTY: MICHAEL FLYNN

 In December 2017, Flynn pleaded guilty to making false statements to the FBI about his conversations with the Russian ambassador. The admission was part of a plea bargain etched out with Mueller investigators. 

Flynn's sentencing was then delayed several times. 

The Justice Department, under Attorney General Bill Barr, filed a motion to dismiss the Flynn case in May, but a U.S. district judge ordered a hold. The matter is still currently held up in court. 

Flynn was President Trump's former National Security Advisor . He previously served when he was a three star general as President Obama's director of the Defense Intelligence Agency but was fired. 

GUILTY: MICHAEL COHEN

Cohen pleaded guilty to eight counts including fraud and two campaign finance violations in August 2018. 

Pleaded guilty to further count of lying to Congress in November 2018. He was sentenced to three years in prison and $2 million in fines and forfeitures in December 2018. 

He was released from prison and into home confinement in July due to the coronavirus pandemic.Cohen was Trump's longtime personal attorney, starting working for him and the Trump Organization in 2007. 

Cohen professed unswerving devotion to Trump - and organized payments to silence two women who alleged they had sex with the-then candidate: porn star Stormy Daniels and Playboy model Karen McDougal. He admitted that payments to both women were felony campaign finance violations - and admitted that he acted at the 'direction' of 'Candidate-1': Donald Trump. 

He also admitted to tax fraud by lying about his income from loans he made, money from taxi medallions he owned, and other sources of income, at a cost to the Treasury of $1.3 million.And he admitted that he lied to Congress, in a rare use of that offense. 

The judge in his case let him report for prison on March 6 and recommended he serve it in a medium-security facility close to New York City. 

Campaign role: Paul Manafort chaired Trump's campaign for four months - which included the Republican National Convention in Cleveland in 2016, where he appeared on stage beside Trump who was preparing  to formally accept the Republican nomination

GUILTY: PAUL MANAFORT

Found guilty of eight charges of bank and tax fraud in August 2018. Sentenced to 47 months in March 2019. Pleaded guilty to two further charges - witness tampering and conspiracy against the United States.

Manafort was supposed to be jailed for seven and a half years, but, like Cohen, was released in May due to COVID-19 concerns. 

Manafort worked for Trump's 2016 bid for the White House starting in March 2016 and served as campaign chairman from June to August 2016, helping the now-president amass the needed delegates to win the nomination at the the Republican National Convention in Cleveland. 

Manafort was a well known D.C. lobbyist, but in 2015 he needed more funds and offered to work for Trump for free in order to bank new clients afterward. 

The Mueller team unwound his previous finances and discovered years of tax and bank fraud as he coined in cash from pro-Russia political parties and oligarchs in Ukraine.

Manafort pleaded not guilty to 18 charges of tax and bank fraud but was convicted of eight counts in August 2018. The jury was deadlocked on the other 10 charges. 

A second trial on charges of failing to register as a foreign agent due in September did not happen when he pleaded guilty to conspiracy against the United States and witness tampering in a plea bargain.

Minutes after his second sentencing hearing in March 2019, he was indicted on 16 counts of fraud and conspiracy by the Manhattan District Attorney Cyrus Vance Jr., using evidence which included documents previously presented at his first federal trial. The president has no pardon power over charges by district and state attorneys. 

GUILTY: RICK GATES

Pleaded guilty to conspiracy against the United States and making false statements in February 2018. 

Gates, a Trump campaign official, was Manafort's former deputy at political consulting firm DMP International. He admitted to conspiring to defraud the U.S. government on financial activity, and to lying to investigators about a meeting Manafort had with a member of Congress in 2013. As a result of his guilty plea and promise of cooperation, prosecutors vacated charges against Gates on bank fraud, bank fraud conspiracy, failure to disclose foreign bank accounts, filing false tax returns, helping prepare false tax filings, and falsely amending tax returns.

Gates was sentenced to three years of probation and 45 days in jail. In April, a judge ruled that he didn't have to report to jail during the coronavirus pandemic. 

GUILTY AND JAILED: GEORGE PAPADOPOLOUS

Pleaded guilty to making false statements in October 2017. Sentenced to 14 days in September 2018 and reported to prison in November. Papadopolous served 12 days and was released on December 7, 2018. 

Papadopoulos was a member of Trump's campaign foreign policy advisory committee. He admitted to lying to Mueller investigators about his contacts with London professor Josef Mifsud and Ivan Timofeev, the director of a Russian government-funded think tank. 

He agreed to cooperate with the special counsel investigation but has criticized it since. 

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