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Revelations in New York court underscore Trump's legal peril on multiple fronts

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In a push to compel the testimony of former President Donald Trump and two of his children, New York Attorney General Letitia James disclosed a potential game changer late Tuesday in a widening civil investigation of the Trump family business.

State investigators, the attorney general asserted, have "collected significant additional evidence indicating that the Trump Organization used fraudulent or misleading asset valuations to obtain a host of economic benefits, including loans, insurance coverage, and tax deductions."

Trump family business: New York AG subpoenas Ivanka Trump, Don Jr. in fraud inquiry

The state investigation and a parallel criminal probe by the Manhattan District Attorney's Office are two of the legal battles shadowing the former president. The New York court filing, which the company dismissed as a long-simmering political vendetta, underscored an expanding legal firestorm inching closer to the Trump business and the former president himself.

New York Attorney General Letitia James says investigators "collected significant additional evidence" against the Trump Organization.
New York Attorney General Letitia James says investigators "collected significant additional evidence" against the Trump Organization.

Beyond New York, Georgia authorities have been building on a months-long criminal investigation into Trump's alleged attempts to interfere in the state presidential vote count. In Washington, a special House committee signaled that it is examining whether Trump's failure to call off a mob of supporters who assaulted the Capitol amounts to criminal conduct that should be referred to the Justice Department for prosecution.

This week, the House committee pushed further into Trump's inner circle, serving subpoenas on the former president's legal team who advanced baseless election fraud theories to overturn the election. Late Wednesday, the Supreme Court added to the former president's troubles when it refused to block the House panel's demand for caches of documents from Trump's last days in the White House that could shed light on his actions and communications during the Capitol riot and the days leading up to the insurrection.

Donald Trump sues NY attorney general: A bid to stop probe of his business practices

Sidney Powell, right, and Rudy Giuliani are among the people subpoenaed by the House committee investigating the Jan. 6 riot.
Sidney Powell, right, and Rudy Giuliani are among the people subpoenaed by the House committee investigating the Jan. 6 riot.

The attorney general's assessment of the evidence against the Trump business represents the most detailed accounting of the legal threat.

"In the past, Trump's approach to any legal trouble has been to brush it off as some sort of political gamesmanship," said Jimmy Gurule, a former Justice Department official in the George H.W. Bush administration. "But these are investigations on multiple levels, examining multiple courses of conduct. These are exceedingly serious matters. The big difference is that he is no longer president, and the mantle of immunity is no longer available to him."

New York looking into Trump properties

In the New York case, James’ office teamed with the Manhattan district attorney to investigate whether there is evidence that Trump, his business organization and members of his family violated the law by exaggerating or undervaluing the worth of various properties to obtain loans, lower taxes and other financial advantages.

The probe was sparked by congressional testimony in 2019 by Michael Cohen, a former Trump lawyer who said his ex-boss changed valuations virtually the way other people changed socks.

Michael Cohen, President Donald Trump's longtime personal attorney, testifies before the House Committee on Oversight and Reform on Feb. 27, 2019, in Washington.
Michael Cohen, President Donald Trump's longtime personal attorney, testifies before the House Committee on Oversight and Reform on Feb. 27, 2019, in Washington.

“It was my experience that Mr. Trump inflated his total assets when it served his purposes, such as trying to be listed among the wealthiest people in Forbes, and deflated his assets to reduce his real estate taxes," said Cohen, who pleaded guilty to unrelated charges and served a prison sentence.

James’ office said Tuesday that investigators had not decided whether to proceed with legal allegations against Trump. The investigators notified the Trump Organization last year that the probe, initially civil in nature, had become a criminal matter.

One filing submitted in Manhattan Supreme Court late Tuesday said investigators “obtained documents and testimony from numerous witnesses that were involved in creating and disseminating the misleading statements and omissions.”

Investigators determined that official statements of Trump’s financial condition were made “in broad terms and in ways which were often inaccurate or misleading when compared with the supporting data and documentation that the Trump Organization submitted to its accounting firm," a court filing said.

Supporting financial data for a 2015 Trump financial statement pegged the value of his triplex apartment in Manhattan’s Trump Tower at $327 million, based on 30,000 square feet of space multiplied by a certain price per square foot. Investigators said a 2017 financial statement said the apartment’s total area was slightly more than 10,996 square feet.

Allen Weisselberg, a former top Trump business executive charged in an alleged tax fraud scheme involving the Trump Organization, told investigators the difference represented an overstatement of “give or take” $200 million, James’ office said in the court filing. Weisselberg has denied wrongdoing.

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In 2012, the Trump Organization valued a 212-acre property north of New York City at $291 million, based on zoning that would enable construction of nine luxury homes. Two outside appraisers valued the property at $56 million in March 2016.

Trump’s next financial statement “disguised” the nosedive by moving the property to a category that did not include specific valuations, James’ office said in a statement.

Trump’s financial statements specified that asset valuations did not include any “brand value,” a reference to the financial worth of his famous name. Investigators determined that from 2013-2014, seven Trump golf club properties were formally valued in a way that included an undisclosed 30% premium above fixed assets for a “fully operational branded facility,” James’ office said.

President Donald Trump drives his golf cart to the next hole at his Trump International Golf Club in West Palm Beach, Fla., on Dec. 28, 2020.
President Donald Trump drives his golf cart to the next hole at his Trump International Golf Club in West Palm Beach, Fla., on Dec. 28, 2020.

Real estate developers and other business executives often use shifting financial figures in valuing their assets, based on changing economic conditions and other factors. As a result, it can be difficult for investigators or prosecutors to prove that the changes amounted to alleged civil or criminal wrongdoing.

Paul Rosenzweig, founder of Red Branch Consulting and a former senior counsel to Kenneth Starr, who headed an investigation of President Bill Clinton, described the shifting valuations as the "reality of business."

"Is there wiggle room? Absolutely. A lot of real estate assessors will tell you that determining a value is an art and not a science. You can try to make it as scientific as possible by being very clear about your underlying assumptions, said Martha Stark, a New York University professor and former New York City finance commissioner who oversaw property tax assessments.

Where's the line that separates an estimation from an alleged falsification?

"If Trump is ultimately charged, it's only because he has been excessive in doing what everybody in the New York real estate business does," Rosenzweig said.

One of Tuesday’s court filings said James’ office “intends to make a final determination about who is responsible for those misstatements and omissions” in Trump’s financial statements.

Pursuing that goal last year, investigators subpoenaed Trump, his son Donald Jr. and his daughter Ivanka to provide testimony and financial records. Alan Futerfas, an attorney for the Trumps, filed a motion this month to quash or delay compliance with the subpoenas until the conclusion of the investigation by the Manhattan district attorney and James’ office.

Donald Trump, his daughter Ivanka and his son Donald Jr., right, have been subpoenaed in a New York investigation into the family business.
Donald Trump, his daughter Ivanka and his son Donald Jr., right, have been subpoenaed in a New York investigation into the family business.

In opposing that motion Tuesday, James’ office filed more than 260 sealed court exhibits whose titles offered cryptic clues to the actions of Trump and his children.

One exhibit referred to a Trump certification to Deutsche Bank, one of his major lenders, in November 2014. Others were titled as certifications of Trump’s financial statements from 2016-2019. Trump’s children, including his son Eric, received corporate operating financial documents, other exhibits showed.

The Trump Organization responded with a wholesale political attack on the attorney general.

"The only one misleading the public is Letitia James," the company said. "She defrauded New Yorkers by basing her entire candidacy on a promise to get Trump at all costs without having seen a shred of evidence and in violation of every conceivable ethical rule."

Georgia inquiry focusing on Trump's pressure in 2020 election: 'I just want to find 11,780 votes'

Trump's alleged attempt to pressure Georgia authorities to tilt the state vote count in his favor has been at the center of Fulton County District Attorney Fani Willis' investigation, which has been weighing charges of solicitation of election fraud, false statements and conspiracy since early last year.

At least part of the inquiry has focused on President Trump's telephone call Jan. 2, 2021, to Secretary of State Brad Raffensperger who was pressed to "find" enough votes to reverse Joe Biden's victory in Georgia in the presidential race.

Georgia Secretary of State Brad Raffensperger resisted pressure from Donald Trump, telling the president his claims of election fraud were false.
Georgia Secretary of State Brad Raffensperger resisted pressure from Donald Trump, telling the president his claims of election fraud were false.

"So look, all I want to do is this: I just want to find 11,780 votes, which is one more than we have. Because we won the state," Trump told Raffensperger, according to an audio recording of that call.

On Thursday, Willis sent a letter asking Fulton County Superior Court Chief Judge Christopher Brasher to impanel a special grand jury. She wrote that her office “has received information indicating a reasonable probability that the State of Georgia’s administration of elections in 2020, including the State’s election of the President of the United States, was subject to possible criminal disruptions," The Associated Press reported.

In Georgia, special grand juries do not have authority to hand up indictments. However, they may issue recommendations to prosecutors who can.

Willis told The Associated Press earlier that the investigation was progressing and a decision on whether to bring criminal charges could come as soon as the first part of this year.

She said a team of lawyers, investigators and a legal assistant, less than 10 in all, have been focused on the case.

“We’re going to just get the facts, get the law, be very methodical, very patient and, in some extent, unemotional about this quest for justice,” she said.

In a statement issued Thursday, Trump characterized his call with Raffensperger as "perfect."

"I didn't say anything wrong in the call, made while I was President on behalf of the United States of America, to look into the massive voter fraud which took place in America," Trump said in the statement, repeating erroneous comments he made earlier about the 2020 election outcome.

Jan. 6 panel breaching Trump's inner circle

Rep. Liz Cheney is vice chair of the committee investigating the Jan. 6 riot.
Rep. Liz Cheney is vice chair of the committee investigating the Jan. 6 riot.

A special House committee has been investigating the Jan. 6 attack for the past six months. Panel leaders signaled that they are prepared to pass judgment on whether Trump's conduct during the siege broke the law.

Rep. Liz Cheney, R-Wyo., the panel's co-chair, said lawmakers gathered "firsthand" witness testimony that Trump watched the riot unfold on television from a dining room next to the Oval Office yet did little to stop it.

Ex-president in the crosshairs: Jan. 6 committee puts Trump on notice as US marks riot anniversary

"We know that that is clearly a supreme dereliction of duty ... we've certainly never seen anything like that as a nation before," Cheney told CBS this month.

Rep. Bennie Thompson, D-Miss., the panel's chairman, has gone further, suggesting that Trump's action – or inaction – could have criminal consequences.

Reps. Bennie Thompson, D-Miss., and Liz Cheney, R-Wyo., head the House committee investigating the Capitol riot. Cheney accused Donald Trump of dereliction of duty, and Thompson suggested there could be criminal penalties against the former president.
Reps. Bennie Thompson, D-Miss., and Liz Cheney, R-Wyo., head the House committee investigating the Capitol riot. Cheney accused Donald Trump of dereliction of duty, and Thompson suggested there could be criminal penalties against the former president.

"If, in the course of our review, we find something that we think warrants review or recommendation to the Department of Justice ... we will do it," Thompson told ABC this month. "We are not looking for it, but if we find it, we will absolutely make the (criminal) referral."

Since then, the panel has pushed further into Trump's inner circle. Last week, the committee called for the cooperation of Trump ally and House Minority Leader Kevin McCarthy, R-Calif., who described a “very heated conversation” with Trump on Jan. 6. Thompson said McCarthy spoke with Trump on Jan. 11 about the potential for censure, impeachment or removal under the 25th Amendment.

Capitol riot: Jan. 6 panel asks House GOP leader Kevin McCarthy for information about Donald Trump, Mark Meadows

Accusing the committee of playing politics, McCarthy said he will not cooperate.

The panel sought other high-profile witnesses, issuing subpoenas to attorneys Rudy Giuliani and Sidney Powell, who led failed legal challenges to overturn the election.

The committee demanded testimony and documents from Mark Meadows, a former Trump chief of staff, and former White House political strategist Steve Bannon, though both refused to comply with subpoenas. Bannon has been charged with criminal contempt; a decision on whether Meadows will be prosecuted has not been disclosed by the Justice Department.

Robert Costello, who represents Giuliani in the most recent subpoena demand, cast the committee's action as "political theater."

"Do you really think the committee is going to get substantial information from Rudy Giuliani? There are all sorts of privilege at play here, including communications involving attorney and client," Costello told USA TODAY.

Thompson said Giuliani, Powell and two other Trump attorneys subpoenaed Tuesday "advanced unsupported theories about election fraud, pushed efforts to overturn the election results or were in direct contact with the former president about attempts to stop the counting of electoral votes."

Wednesday's decision by the Supreme Court, which refused Trump's plea to block the transfer of White House documents sought by the panel, opens the door to hundreds of pages of records. Lawmakers said the material is central to clarifying the chaotic final days of Trump's presidency and his actions – and inaction – during the Capitol siege.

The panel chairman lauded the action as "a victory for the rule of law and American democracy."

"The Select Committee has already begun to receive records that the former president had hoped to keep hidden, and we look forward to additional productions regarding this important information," Thompson said.

This article originally appeared on USA TODAY: New York AG court filing about Trump underscores family legal peril

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