New York AG's Office says its probe of the Trump Organization is now 'criminal' and will work with Manhattan DA Cy Vance in their ongoing fraud investigation
New York's attorney general is now investigating the Trump Organization for criminal offenses, it emerged on Tuesday night.
The office, led by Letitia James, had been investigating the company for civil tax offenses since early 2019. The investigation has now escalated.
'We have informed the Trump Organization that our investigation into the Organization is no longer purely civil in nature,' said Fabien Levy, a spokesman for the office.
'We are now actively investigating the Trump Organization in a criminal capacity, along with the Manhattan DA.'
Trump, seen Tuesday in NYC, has been told his organization is under criminal investigation
Letitia James, the attorney general of New York, has ramped up her investigation
Cyrus Vance Jr, the Manhattan district attorney, is investigating Trump for tax fraud
The district attorney's office, led by Cyrus Vance, has been investigating possible criminal tax fraud since 2018.
A person familiar with the investigation told CNN that several investigators with the James's office, who are considered experts on the Trump Organization, have joined Vance's team.
The notice from James’s office was sent in late April to attorneys for the Trump Organization, The Washington Post said.
It suggested that criminality could apply to actions by current and former company executives and employees if the investigation finds wrongdoing, a source told the paper.
It was not immediately clear why the two law enforcement agencies are now collaborating years into their previously separate investigations.
Partnerships between the two New York law enforcement offices are rare.
Trump has previously called the New York attorney general's investigation politically motivated, and Eric Trump - who has spoken to James's team - responded to The Washington Post's request for comment with a video montage of James criticizing his father.
Trump was in New York City on Monday and Tuesday, having left Florida for the summer.
Much of the attention at the moment from Vance appears focused on the chief financial officer for the Trump Organization, Allen Weisselberg, and attempts to encourage him to 'flip' on his longtime boss.
Sources told the Wall Street Journal last week that Vance's office has issued a subpoena against Columbia Grammar & Preparatory School over $500,000 in fee payments made for Weisselberg's grandchildren.
Those payments were made between 2012 and 2019 using checks signed by both Trump and Weisselberg, it is claimed.
They are said to have been made as a form of financial assistance to Weisselberg's son Barry and his ex-wife Jessica so their two children could attend the school.
Barry managed Trump's ice rink in New York's Central Park on a salary of $223,000, until the city officials axed their contract with the ex-president this year.
He claims not to have been able to afford for his children to pay to attend Columbia Grammar & Prep, located on New York's Upper West Side.
Allen Weisselberg is pictured behind Donald Trump and Don Jr in 2017. Manhattan prosecutor Cyrus Vance is reportedly trying to 'flip' Weisselberg into turning on his boss and friend
His former spouse Jennifer has claimed they believed the school fees were part of Barry's payment package.
Vance's investigation is said to center on whether the fee payments should have been flagged as gifts or loans, rather than as 'financial assistance.'
If so, they should have incurred tax, meaning the Weisselbergs may have evaded their dues to the IRS with the payment arrangement.
The school has indicated it will comply with the prosecutor's request.
Weisselberg has not been accused of or charged with any crime, and Trump has denied all allegations of wrongdoing.
Another key figure in Vance's investigation is Trump's former lawyer Michael Cohen, who has met with Vance and his team at least nine times.
Cohen, 54, began working for the Trump Organization in 2006, and in 2018 was sentenced to three years for his role assisting tax evasion and campaign finance fraud. Cohen was released in April 2020.
Michael Cohen, seen in March 2019, has spoken to New York prosecutors at least nine times
In a recent interview with Cohen, investigators asked questions about Trump's Seven Springs estate as part of an inquiry into whether the value of the 213-acre Westchester County property was improperly inflated to reduce his taxes.
The Associated Press reported that investigators asked Cohen about individuals involved in the appraisal of the estate and benefits derived from its valuation, including a $21 million income tax deduction.
Cohen was released to home confinement last year amid coronavirus fears, and his recent meetings have been conducted via video conference.
Vance recently hired former mafia prosecutor Mark Pomerantz - who, as a federal prosecutor, oversaw the prosecution of Gambino crime boss John Gotti - as a special assistant district attorney to assist in the wide-ranging probe of Trump's finances.
Pomerantz, a 'mob-busting' prosecutor, has been brought in by Vance to investigate Trump
Vance, 66, is stepping down at the end of this year but has vowed the investigation will continue
Trump bought the Seven Springs estate, in Mount Kisco, New York, in 1995 for $7.5 million
The inquiry, according to court filings, includes an examination of whether Trump or his businesses lied about the value of assets to gain favorable loan terms and tax benefits.
The district attorney also is scrutinizing hush-money payments paid to women on Trump's behalf.
After a lengthy legal battle, his office is now in possession of eight years of Trump's tax records, including final and draft versions of tax returns, source documents containing raw financial data and other financial records held by his accounting firm.
The Supreme Court on February 22 ruled that Vance's team should have access to the documents.
Vance's focus on Seven Springs involves an environmental conservation arrangement Trump made in return for a tax deduction at the end of 2015, following failed attempts to turn the property into a golf course and luxury homes.
Trump granted an easement to a conservation land trust to preserve 158 acres and received a $21 million income tax deduction, equal to the value of the conserved land, according to records.
The amount was based on a professional appraisal that valued the full Seven Springs property at $56.5 million as of December 1, 2015.
That was a much higher amount than the evaluation by local government assessors, who said the entire estate was worth $20 million.
Trump bought the property, including a palatial Georgian-style mansion that once belonged to the family of newspaper publisher Katharine Graham, for $7.5 million in 1995.
Vance announced in April that he would leave office at the end of the year and not seek reelection, but in a memo to staff, he stressed that the investigation would not stop.
'The work continues,' Vance wrote, echoing his short statement after the U.S. Supreme Court ruled last month that he could have Trump's tax records.
