- A New York judge ordered lawyers for President Donald Trump's company and his son, Eric, to court Sept. 23 to explain why they should not be subject to subpoenas issued by the state's attorney general's office as part of an ongoing civil investigation.
- AG Letitia James is investigating whether the Trump Organization incorrectly valued real estate assets on annual financial statements that were used to obtain loans, as well as to get economic and tax benefits related to those properties.
- The probe, and a criminal probe by Manhattan District Attorney Cyrus Vance Jr., who is seeking Trump's tax returns, comes as Trump faces a tough re-election challenge from Joe Biden.
A New York judge has ordered lawyers for President Donald Trump's company and his son Eric to court later in September to explain why they should not be subject to subpoenas issued by the state attorney general's office as part of an ongoing civil investigation.
Attorney General Letitia James is investigating whether the Trump Organization incorrectly valued several real estate assets on annual financial statements that were used to obtain loans, as well as to get economic and tax benefits related to those properties.
The probe comes as Trump, a Republican, is facing a tough reelection fight against Democratic nominee Joe Biden, a former vice president, and as Trump seeks to block a grand jury subpoena to his accountants for his income tax returns and other financial records from the Manhattan District Attorney's Office.
Unlike James' civil investigation, Manhattan DA Cyrus Vance Jr.'s office is conducting a criminal probe.
James in late August filed a court action seeking to compel the Trump Organization, Eric Trump, and several Trump entities and lawyers to comply with investigative subpoenas she issued as part of her probe.
James wants Eric Trump, who runs the Trump Organization with his brother, Donald Trump Jr., to testify in the investigation, and is also seeking thousands of pages of documents related to the properties, which she says are being withheld.
James' office has said that Eric Trump was scheduled to be interviewed by AG investigators in July, but "now refuses to appear."
On Wednesday, Judge Arthur Engoron of state Supreme Court in Manhattan, issued an order to show cause to the Trump Organization, Eric Trump and the other subpoena targets, telling them to appear in court Sept. 23 to explain why they should not be compelled to comply with James' subpoenas.
Engoron also ordered that they file any legal papers opposing the subpoenas by Sept. 16 in Supreme Court, the state's trial court level.
A spokesman for James, and lawyers for the Trump Organization and Eric Trump, had no comment.
Eric Trump on Aug. 24, the same day that James' court filings about the subpoenas became public, accused the attorney general on Twitter of "the highest level of prosecutorial misconduct," which was "purposely dropped on the eve of the Republican" National Convention "for political points."
Trump Organization spokesman Alan Garten, in a statement that same day, called the case "simply a discovery dispute over documents and the like." Discovery is the process of parties in a legal case exchanging documents, submitting to depositions, and providing other information to each other.
Engoron is the second judge to be assigned to the case. The first judge, Debra James, removed herself from the case on her own accord shortly after James filed it.
Judge James in a court filing said she had determined "that she must recuse herself." The judge did not explain what led her to make that determination. James' office did not respond to a request for comment from CNBC. A spokesman for the court system said that James' recusal spoke for itself.
AG James launched the investigation into the Trump Organization in 2019 following testimony before Congress by Michael Cohen, the former personal lawyer and fixer for President Trump, who testified "that Trump's annual financial statements inflated the values of Trump's assets to obtain favorable terms for loans and insurance coverage, while also deflating the value of other assets to reduce real estate taxes," the attorney general's office noted in a statement last month.
One focus of James' probe is the Trump Organization's Seven Springs Estate, a 212-acre property in Westchester County, New York.
Court filings have noted that valuations of Seven Springs were used to claim an apparent tax deduction of more than $21 million for donating a conservation easement on the property in 2015.
The Financial Times last year noted that Trump purchased Seven Springs for $7.5 million in 1996, but valued it at more than $290 million in 2012. Forbes magazine in 2014 said that the property was worth less than $19.5 million, citing recent property sales and local realtors and assessors.
James' office in a statement also said it was eyeing a Trump building at 40 Wall St. in Manhattan, the Trump International Hotel and Tower Chicago and the Trump National Golf Club – Los Angeles.
In a statement last month, James said, "Nothing will stop us from following the facts and the law, wherever they may lead. For months, the Trump Organization has made baseless claims in an effort to shield evidence from a lawful investigation into its financial dealings."
"They have stalled, withheld documents, and instructed witnesses, including Eric Trump, to refuse to answer questions under oath," James said.