New York suggests a fraud probe is driving its bid for Trump records

Register now

Manhattan District Attorney Cyrus Vance Jr. suggested his office may be investigating potential bank and insurance fraud by the Trump Organization, as it seeks access to the president’s tax returns and other financial records.

Vance (pictured) asked a federal judge on Monday to throw out President Donald Trump’s latest effort to block a subpoena for documents from his accounting firm, Mazars USA LLP. While not being specific, the filing signaled prosecutors are looking into possible fraud, citing news reports that Trump inflated his wealth to get loans and classified hush payments as legal expenses.

“At the time the Mazars subpoena was issued, there were public allegations of possible criminal activity at plaintiff’s New York County-based Trump Organization dating back over a decade,” the filing states.

The court document doesn’t say specifically what Vance is investigating. Instead, it quotes from an October opinion by U.S. District Judge Victor Marrero in New York, who listed a number of publicly reported investigations that included allegations of “insurance and bank fraud by the Trump Organization.” For his opinion, Marrero had relied on a publicly filed declaration by one of Vance’s prosecutors, Solomon Shinerock, which also discussed public reporting about probes involving Trump, his companies and the people around him.

The DA’s investigation may result in a “favorable outcome” related to “alleged insurance and bank fraud by the Trump Organization and its officers,” among other matters, prosecutors said Monday, quoting from Marrero’s October ruling.

Asked about the court filing at a press conference Monday, Trump called the investigation “Democrat stuff.”

“This is a continuation of the worst witch hunt in American history. And there’s nothing that I know, even, about it,” Trump said. “It’s a terrible thing that they do. It’s really a terrible thing.”

Hush-money payment

Trump wants to prevent Mazars from turning over evidence in Vance’s investigation of hush-money payments to porn star Stephanie Clifford, who is known as Stormy Daniels and claims she had sex with Trump. The U.S. Supreme Court ruled last month that the president doesn’t have absolute immunity from state criminal investigations.

Prosecutors on Monday cited “public reports of possibly extensive and protracted criminal conduct at the Trump Organization” to justify the subpoena.

Vance told Marrero that a new complaint Trump filed last week was “baseless,” arguing that it “merely serves to delay the grand jury’s investigation.”

The new litigation by Trump may add weeks or months to when Vance will receive the president’s tax filings, possibly until after the November election. The district attorney’s office is barred by grand jury secrecy laws from making the information public.

Trump failed to convince the Supreme Court last month that, as president, he and the people around him have broad immunity from criminal investigations. The high court said he can raise arguments that the subpoena is too broad or is intended to harass him, which is why the case is back in court.

“Every day that goes by is another day plaintiff effectively achieves the ‘temporary absolute immunity’ that was rejected by this Court, the Court of Appeals, and the Supreme Court,” Vance said.

Lawyers for Trump didn’t immediately respond to emails seeking comment on the court filing.

The president filed a new complaint on July 27, arguing that the grand jury subpoena is “wildly overbroad” and was made in bad faith.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.
Donald Trump Cyrus Vance Jr. Tax returns
MORE FROM ACCOUNTING TODAY