1-30-2021
((trump chin deep in criminal deeds))))
Legal Pressure on Trump Increases With Judge’s Order in Fraud Inquiry.
The order, answering a demand for documents by New York’s attorney general, rejected a bid to shield the records with attorney-client privilege.
The most serious threats confronting the former president include a criminal investigation
by the Manhattan district attorney and the civil inquiry by the attorney general into possible fraud
in Mr. Trump’s business dealings before he was elected.
Ms. James’s investigation began in March 2019, after Michael D. Cohen, the former president’s onetime lawyer, told Congress that Mr. Trump had inflated his assets in financial statements to secure bank loans and had understated them elsewhere to reduce his tax bill.
Investigators in Ms. James’s office have focused their attention on an array of transactions, including a financial restructuring of the Trump International Hotel & Tower in Chicago in 2010 that resulted in the Fortress Credit Corporation forgiving debt
worth more than $100 million.
Ms. James’s office has said in court documents that the Trump Organization — Mr. Trump’s main business vehicle — had thwarted efforts to determine how that money was reflected in its tax filings, and whether it was declared as income, as the law typically requires.
An analysis of Mr. Trump’s financial records by The New York Times found that he had avoided federal income tax on almost all of the forgiven debt.
Ms. James’s office is also examining whether the Trump Organization used inflated appraisals when
it received large tax breaks after promising to conserve land where its development efforts faltered, including at its Seven Springs estate in Westchester County.
Accusing the Trump Organization of trying to stall the inquiry, lawyers with Ms. James’s office sought a judge’s order in August compelling the company to turn over documents related to the Seven Springs estate and other properties, and requiring the former president’s son Eric Trump, a company vice president, to testify in the inquiry. (Eventually, he did.)
In December, Justice Engoron ordered the Trump Organization to turn over to Ms. James’s office an engineer’s documents related to a conservation easement at the Seven Springs property.
Ms. James’s office is examining whether the easement is legitimate and whether an improper valuation of the estate allowed the Trump Organization to take a $21 million tax deduction
it was not entitled to.
Lawyers for the company had tried to keep the engineer’s documents from investigators by claiming the materials were privileged because lawyers for the Trump Organization
relied on them in valuing the property.
Justice Engoron rejected that argument.
In the order issued on Friday, Justice Engoron
again found that the Trump Organization lawyers had invoked attorney-client privilege for documents to which it did not apply.
Some communications that had been marked as privileged, he wrote, were “addressing business tasks and decisions, not exchanges soliciting or rendering legal advice.” He also said that communications related to public relations were
not of a legal nature and that privilege was waived in some circumstances where third parties were involved in the discussions.
Justice Engoron did not specify in the order which documents were to be provided to Ms. James’s office, but he gave the Trump Organization until Feb. 4 to turn them over.
A spokesman for the attorney general declined to comment. A representative of the Trump Organization did not immediately respond to a request for comment.
The Seven Springs estate is also now at issue in the long-running inquiry being conducted by the Manhattan district attorney, Cyrus R. Vance Jr.,as first reported by The Wall Street Journal. Prosecutors involved in the inquiry, the only known active criminal investigation of Mr. Trump, have subpoenaed records related to the Westchester property, according to people familiar with the matter.
Mr. Vance’s investigation has largely been stalled since last fall, when Mr. Trump sued to block a subpoena for his tax returns
and other records, sending the bitter dispute to the U.S. Supreme Court for a second time. A ruling is expected soon.
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