A judge in New York on Friday increased pressure on former President Donald J. Trump’s family business and several associates, ordering them to give state investigators documents in a civil investigation into whether the company misrepresented assets to bank loans and tax benefits to get.
It was the second blow Judge Arthur F. Engoron of the Manhattan High Court has inflicted on Trump’s company in recent weeks.
In December, he ordered the company, the Trump organization, to compile records that his attorneys tried to protect, including some related to a Westchester County, NY, property that is among those owned by the attorney general’s attorney. New York, Letitia James, investigated. .
On Friday, Justice Engoron went on to say that even more documents, as well as communications with a law firm hired by the Trump organization, to Ms. James’ office had to be handed over. In so doing, he rejects the lawyers’ contention that the documents in question were covered by the privilege of an attorney-client.
The decision was a new reminder that Mr. Trump – who left office a week ago under the cloud of accusation and is on his way to a Senate hearing on a charge of ‘incitement to rebellion’ after his supporters violently stormed the Capitol – as a private citizen poses a significant legal threat facing.
The most serious threats facing the former president include a criminal investigation by Manhattan’s district attorney and the attorney general’s civil investigation into possible fraud in Trump’s business dealings before he was elected.
James’ investigation began in March 2019, after Michael D. Cohen, the former president’s former lawyer, told Congress that Trump had inflated his assets in financial statements to secure bank loans and underestimated them elsewhere to lower his tax bill. .
Investigators in the office of Mrs. James drew attention to a variety of transactions, including a financial restructuring of the Trump International Hotel & Tower in Chicago in 2010, which resulted in the Fortress Credit Corporation forgiving debts of more than $ 100 million.
Mrs. James’ office said in court documents that the Trump organization – Mr. Trump’s main business vehicle – attempts to determine how the money is reflected in his tax file, and whether it is declared income, as the law usually requires.
An analysis of Trump’s financial records by The New York Times found that he avoided federal income taxes on almost all forgiven debts.
Mrs. James’ office also investigates whether the Trump organization used inflated valuations when it received large tax cuts after promising to preserve land where its development efforts faltered, including on its Seven Springs estate in Westchester County.
Attorneys at James’s office accused the Trump organization of trying to stop the investigation, seeking an order from the judge in August to force the company to seize documents related to the Seven Springs estate and other properties. gives, and requires former president’s son Eric Trump, a company vice president, to testify in the investigation. (Eventually he did.)
In December, Justice Engoron ordered the Trump organization to provide an engineer with documents related to the preservation of the Seven Springs property. To surrender James’s office.
Mrs. James’s office is investigating whether the redemption is legal and whether an improper valuation of the estate allows the Trump organization to take a $ 21 million tax deduction to which he was not entitled.
Lawyers for the company tried to withhold the engineer’s documents from investigators by claiming the material was privileged because attorneys from the Trump organization trusted them to value the property. Judge Engoron dismissed the argument.
In the order issued Friday, Judge Engoron again found that the Trump Organization attorneys invoked a privilege of an attorney client for documents to which it does not apply.
Some communications marked as privileged, he wrote, “paid attention to business tasks and decisions, not to exchanges seeking legal advice.” He also said that public relations communications were not lawful and that privilege was denied in some circumstances where third parties were involved in the discussions.
Judge Engoron did not specify in the order which documents to Mrs. James’ office was not to be provided, but he gave the Trump organization until Feb. 4 to hand it over.
A spokesman for the attorney general declined to comment. A representative of the Trump organization did not immediately respond to a request for comment.
The Seven Springs estate is also now at stake in the lengthy investigation conducted by Manhattan District Attorney Cyrus R. Vance Jr., as first reported by The Wall Street Journal. Prosecutors involved in the investigation, the only known active criminal investigation of Mr. Trump, has sued Westchester property records, according to people familiar with the matter.
Mr. Vance’s investigation has been largely halted since last fall, when Mr. Trump sued to block a summons for his tax returns and other records, and sent the bitter dispute to the U.S. Supreme Court for a second time. A verdict is expected soon.
Danny Hakim contribution made.