Trump and Kids Must Face Grilling in Fraud Probe, Appeals Court Rules

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Mandel Ngan/Getty
Mandel Ngan/Getty

Former President Donald Trump and his adult kids, Don Jr. and Ivanka, must indeed sit down and answer tough questions from the New York Attorney General in an ongoing investigation about alleged bank and insurance fraud at their family company, an appellate court in that state ruled on Thursday.

“Our investigation will continue undeterred because no one is above the law,” New York AG Letitia James tweeted immediately after the decision.

Attorneys representing the Trumps did not immediately respond to calls from The Daily Beast.

How Trump’s Fear of Getting Pied in the Face May Come Back to Cream Him

The AG’s office has spent more than three years investigating allegations that the Trump Organization has routinely inflated property values at golf courses and skyscrapers across the country to acquire bank loans on more favorable terms or reduce tax bills. Investigators recently roped in the major real estate firm Cushman & Wakefield, demanding documents showing how it allegedly helped the Trumps lie on official documents. While aspects of this case appear criminal, the AG is pursuing a civil case that could result in New York state seeking to dissolve the former president’s company.

Early on in the investigation, attorneys at the AG’s office sought the closed door testimony of Trump’s son Eric Trump, an executive who oversaw several of the projects in question. While he initially fought the subpoena, he eventually lost and showed up for a deposition—only to refuse to answer questions and plead the Fifth Amendment right against self-incrimination.

The inquiry has continued as investigators tracked down witnesses and amassed hundreds of thousands of documents at the Trump Organization, Cushman & Wakefield, local government offices that oversaw real estate proposals, and other entities involved in the business transactions.

Then, as the investigation entered its final stages in December last year, the AG’s office took the aggressive and inevitable step of seeking testimony under oath from the main players: the former president and two of his other adult children. The Trumps refused to show up for depositions in January—and started revealing details about the investigation into their alleged tax dodging.

The very next month, Justice Arthur F. Engoron blasted the trio for their resistance and ordered them to show up for questioning. The Trumps appealed that decision, which was reaffirmed by a four-judge panel at the New York Appellate Division’s First Judicial Department. Judges Rolando T. Acosta, Tanya R. Kennedy, Peter H. Moulton, and Anil C. Singh signed the order.

The AG’s role in assisting the Manhattan District Attorney in its parallel criminal investigation into the Trump Organization played a major role. The Trumps’ attorneys argued that seeking their clients’ testimony was improper, because it was merely an attempt to acquire their statements in a civil setting so that they could fuel the criminal probe.

While that situation may sound obvious, it takes particular importance in New York, which has a peculiar law that grants total criminal immunity to anyone who testifies before a grand jury ahead of an indictment. The Trumps’ legal team portrays the AG’s subpoena for testimony as an end-run that would allow investigators to get testimony from the former president and his children without having to give them immunity.

That argument didn’t convince New York appellate judges, who said the Trumps could do the same thing Eric did: show up and shut up.

“The existence of a criminal investigation does not preclude civil discovery of related facts, at which a party may exercise the privilege against self-incrimination,” the panel wrote in their decision.

The judges also shot down the idea pushed by the Trump camp that this was a “selective prosecution” that resulted from a vindictive campaign by an AG making good on political promises to go after a president who was loathed by New Yorkers.

“The political campaign and other public statements made by [the Office of the Attorney General] about appellants do not support the claim that OAG initiated, or is using, the subpoenas in this civil investigation to obtain testimony solely for use in a criminal proceeding or in a manner that would otherwise improperly undermine appellants’ privilege against self-incrimination,” the panel wrote.

The AG’s case has become a thorn in Trump’s side as he lies in wait at Mar-a-Lago licking his wounds from his loss to President Joe Biden in 2020 and plotting his potential return in 2024. Although his refusal to testify in the AG’s case was on appeal, Judge Engoron still required him to turn over documents—an order Trump resisted and led to him being found in contempt of court and forced to pay $110,000 in fines. He has since paid the bill and turned over additional records.

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