Politics

New York attorney general is now investigating Trump Organization 'in a criminal capacity'

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Key Points
  • New York State Attorney General Letitia James' office, which already was conducting a civil investigation of former President Donald Trump's company, is now probing the Trump Organization "in a criminal capacity," her spokesman said.
  • James' spokesman indicated that her office's probe is being conducted in conjunction with the criminal investigation of Trump and the Trump Organization by the office of Manhattan District Attorney Cyrus Vance Jr.
  • Both investigations are eyeing claims by Trump's former personal lawyer Michael Cohen that the Trump Organization misstated real estate valuations to reduce their tax liabilities, and get better loan and insurance terms.
President-elect Donald Trump boards the elevator to the lobby after meetings at Trump Tower in New York City on January 16, 2017.
Dominick Reuter | AFP | Getty Images

New York State Attorney General Letitia James' office — which already was conducting a civil investigation of former President Donald Trump's company — is now also probing the Trump Organization "in a criminal capacity" as well, her spokesman said Tuesday night.

James' spokesman implied that her probe is being done in conjunction with the criminal investigation of Trump and the Trump Organization by the office of Manhattan District Attorney Cyrus Vance Jr.

The 2-year-old civil investigation by the Democrat James already was eyeing allegations that the Trump Organization had manipulated the stated value of real estate assets in order to lower their tax liability and to receive more favorable terms for loans and insurance.

Vance's office has been conducting a criminal investigation of those allegations, which first were made in congressional testimony by Trump's former longtime attorney Michael Cohen. Vance's probe also is focused on other issues.

"We have informed the Trump Organization that our investigation into the organization is no longer purely civil in nature," said James' spokesman, Fabien Levy.

"We are now actively investigating the Trump Organization in a criminal capacity, along with the Manhattan DA. We have no additional comment at this time," Levy said.

An official familiar with the latest developments told WNBC in New York on Wednesday that James' office is not conducting a separate criminal probe, but instead has sent two lawyers from her office to work with Vance's investigators. The move came after James' investigators found evidence suggesting a possible crime, that official said.

In late 2019, James scored a legal victory against Trump when a judge ordered him to pay $2 million to settle a lawsuit by the attorney general's office alleging that he had misused his Trump Foundation, a charity, to benefit his 2016 presidential campaign, along with other unlawful activity for more than a decade.

The Trump Foundation agreed in December 2018 to dissolve and to donate its remaining funds to charity as the AG's probe into the foundation continued.

A Trump Organization spokeswoman declined to comment on the announcement that the current probe by James now is focused on possible crimes.

But Trump, in a statement issued Wednesday, said, "There is nothing more corrupt than an investigation that is in desperate search of a crime."

"But, make no mistake, that is exactly what is happening here," Trump said.

The former president then cited statements James made while campaigning in 2018 for election as attorney general.

"The Attorney General of New York literally campaigned on prosecuting Donald Trump even before she knew anything about me," Trump said. "She said that if elected, she would use her office to look into 'every aspect' of my real estate dealings. She swore that she would 'definitely sue' me. She boasted on video that she would be, and I quote, 'a real pain in the ass.' "

"She declared, 'just wait until I'm in the Attorney General's office,' and, 'I've got my eyes on Trump Tower,' " Trump said. "She also promised that, if elected, she would 'join with law enforcement and other Attorney Generals across this nation in removing this President from office,' and, 'It's important that everyone understand that the days of Donald Trump are coming to an end.' "

James won her election in 2018 with 62% of the vote, crushing Republican nominee Keith Wofford.

Last November, Trump, who was raised in the Queens section of New York City, received just 37.7% of the vote in the presidential election in New York State, whose 29 Electoral College votes helped give President Joe Biden his margin of victory over the Republican incumbent.

Trump's son, Donald Trump Jr., later Wednesday later tweeted a copy of his father's full statement on the investigation, which the son called "the flagrant witch hunt that started before New York's Attorney General even took office and apparently before she'd actually seen any actual evidence. (Apparently minor details these days)."

"If that's not a political persecution I'm not sure what is," the younger Trump tweeted.

James last August filed an ultimately successful court action that forced Trump's other adult son, Eric Trump, to answer questions as part of her investigation. Eric Trump runs the Trump Organization with Donald Trump Jr.

The AG's investigators also have reportedly taken a deposition from Allen Weisselberg, the long-time chief financial officer of the Trump Organization. Vance's probe recently has looked into Weisselberg and his two adult sons, one of whom works for the Trump Organization.

Among the real estate holdings that James is known to be eyeing is Seven Springs Estate, a 212-acre property in Westchester County.

The Trump Organization used valuations of Seven Springs to claim an apparent tax deduction of more than $21 million by donating a conservation easement on the property in 2015. 

In 2019, the Financial Times newspaper 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 the property was worth less than $19.5 million, citing what were then recent property sales, as well as local real estate brokers and assessors.

James' office also is investigating the valuations of the 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 issued in August, James said, "Nothing will stop us from following the facts and the law, wherever they may lead."

James at the time accused the Trump Organization of stalling in requests for information, withholding documents, and instructing witnesses, among them Eric Trump, "to refuse to answer questions under oath."

In February, the U.S. Supreme Court refused a last-ditch request by the former president to block Vance's investigators from obtaining years' worth of his tax returns and other financial records via a grand jury subpoena from his long-time accountants.