Trump tax claims in media could justify subpoena, D.A. says

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The Manhattan district attorney said press reports suggesting potential misdeeds by President Donald Trump and his company could justify a grand jury subpoena of the president’s taxes and other financial records.

District Attorney Cyrus Vance Jr. is seeking eight years of the president’s tax returns and other documents as part of a grand jury investigation that includes payments made to porn star Stormy Daniels before the 2016 election. Vance has avoided stating publicly what his office is investigating, while trying to defend against Trump’s argument that the subpoena is too broad and was issued in bad faith.

But in a filing Monday, Vance cited reports from the New York Times, Washington Post and Wall Street Journal suggesting the value of Trump Organization assets were misstated to lenders, investors and tax authorities. If proved, those claims could establish New York crimes such as tax fraud, insurance fraud, falsification of business records or a scheme to defraud, Vance said.

“Even if the grand jury were testing the truth of public allegations alone, such reports, taken together, fully justify the scope of the grand jury subpoena at issue in this case,” Vance said in the brief.

Vance’s office declined to comment. Lawyers for Trump didn’t immediately return emails seeking comment.

Among the press reports cited by Vance on Monday was a March 2019Washington Poststory saying Trump routinely sent “deeply flawed” documents to lenders inflating his assets and minimizing debts.

The D.A. also referenced a February 2019 Wall Street Journal report on allegations by Trump’s former lawyer, Michael Cohen, that Trump and Trump Organization executives made hush-money payments to two women who claimed they’d had sex with Trump, and then mischaracterized those expenditures as legal fees.

Vance also cited reports by the Washington Post and New York Times claiming the Trump Organization may have failed to properly characterize as taxable income a forgiven debt related to the Trump International Hotel and Tower in Chicago.

The dispute over whether the records will be turned over is before the Second Circuit appeals court after the U.S. Supreme Court rejected the president’s claim to absolute immunity from a state criminal investigation.

In his filing Monday with the appeals court, Vance said the president is relying on “recycled objections” and that the judges should reject Trump’s latest attempt to block the subpoena. The D.A. also argued that Trump’s complaints about the subpoena are precluded by the Supreme Court’s ruling in the case.

Contrary to the Supreme Court’s ruling, Trump “asks this court to accord his garden-variety claims of bad faith and overbreadth special treatment because he is the president,” Vance said in a filing.

A lower-court judge last month rejected Trump’s latest bid to block the subpoena, which is directed to his accountants at Mazars USA. The appeals court has set a quick schedule for the appeal, which could result in a ruling before the Nov. 3 presidential election.

Even if Trump loses, he can try to get the Supreme Court to take up the case a second time, and grand jury secrecy laws limit the ability of Vance’s office to make Trump’s papers public.

The case is Trump v. Vance, 19-cv-08694, U.S. District Court, Southern District of New York (Manhattan).

Bloomberg News
Donald Trump Cyrus Vance Jr. Tax returns Tax-related court cases Lawsuits