New York lawsuit against Trump, family could prompt new federal criminal inquiries

·3 min read

The New York attorney general's lawsuit accusing former President Donald Trump and three of his children of perpetrating a decade-long fraud scheme carries no criminal penalties.

Yet the extraordinary civil action, which seeks $250 million in penalties, could open new avenues of criminal inquiry by federal authorities already involved in a multi-pronged examination of Trump's conduct.

While detailing a litany of allegations involving bank, tax and insurance fraud related to inflated valuations attached to the former president's residential and commercial properties, New York Attorney General Letitia James also revealed that she was referring the findings to federal prosecutors in Manhattan and the Internal Revenue Service for possible criminal investigation.

Federal authorities did not immediately respond to requests for comment, but the local Manhattan district attorney's office has already been engaged in a parallel criminal investigation of the Trump Organization's finances in conjunction with James' office.

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Former President Donald Trump departs Trump Tower, Wednesday, Aug. 10, 2022, in New York, on his way to the New York attorney general's office for a deposition in a civil investigation.
Former President Donald Trump departs Trump Tower, Wednesday, Aug. 10, 2022, in New York, on his way to the New York attorney general's office for a deposition in a civil investigation.

Last month, Allen Weisselberg, Trump's longtime top business lieutenant, pleaded guilty to 15 criminal charges flowing from that investigation for a scheme that paid him lavish corporate benefits in off-the-books payments from the Trump Organization without paying taxes.

The deal with the Manhattan district attorney's office requires him to testify truthfully if called as a government witness at the scheduled October trial of two companies of the Trump Organization, where Weisselberg long served as chief financial officer.

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That investigation was believed to have stalled short of implicating Trump earlier this year following the abrupt resignations of two prosecutors who had been leading the district attorney's inquiry.

The resignations of Carey Dunne and Mark Pomerantz were submitted just over a month into the tenure of District Attorney Alvin Bragg, who succeeded longtime prosecutor Cyrus Vance. Vance did not seek reelection.

New York Attorney General Letitia James announces that she's filed a civil lawsuit against former President Donald Trump and his family for overstating asset valuations and deflating his net worth by billions for tax and insurance benefits, on Wednesday, Sept. 21, 2022, in New York. James told journalists her office is seeking that the former president pay $250 million in penalties, as well as banning his family "from running NY business for good" and barring him and his company from purchasing property in the state for five years.
New York Attorney General Letitia James announces that she's filed a civil lawsuit against former President Donald Trump and his family for overstating asset valuations and deflating his net worth by billions for tax and insurance benefits, on Wednesday, Sept. 21, 2022, in New York. James told journalists her office is seeking that the former president pay $250 million in penalties, as well as banning his family "from running NY business for good" and barring him and his company from purchasing property in the state for five years.

At the time of their February departures, Pomerantz said in a resignation letter that Bragg had not authorized a prosecution even though authorities had amassed a powerful case against the former president who Pomerantz believed was "guilty of numerous felony violations."

The letter was first published by the New York Times.

Bragg has claimed that the investigation is continuing, and he reaffirmed that position  following the disclosure of James' lawsuit.

“Our criminal investigation concerning former President Donald J. Trump, the Trump Organization, and its leadership is active and ongoing," Bragg said Wednesday.

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But James' referrals to federal authorities appeared to intensify the pressure on Trump who has repeatedly cast the attorney general's actions as politically driven.

Sarah Krissoff, a former federal prosecutor in Manhattan who handled complex financial  crimes, said the attorney general's lawsuit offers some potentially rich avenues of investigation for federal authorities.

"There seems to be a lot of material in there that could be the basis of criminal charges," Krissoff said, referring to the alleged inflated property valuations used to secure bank loans. "The misrepresentations are so egregious.

"I can't apply for a mortgage and say whatever I want on an application and take the proceeds," Krissoff said. "I have an obligation to tell the truth."

Krissoff described the attorney general's lawsuit as "very strong."

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"Reading this as a defense attorney, I'm thinking your very first conversation with the client should be: 'You're in trouble.'"

Barbara McQuade, a former federal prosecutor, said the findings are only bolstered by their reliance on financial records – not personal testimony susceptible to challenge.

"These allegations seem to be the type of claims that can be proved mostly by documents, which are difficult to refute," said McQuade, a law professor at the University of Michigan. "Documents don’t lie or forget."

Contributing: David Jackson

This article originally appeared on USA TODAY: Trump sued: Letitia James' action could spark fresh criminal inquiries