Manhattan’s district attorney is now looking into loans totaling more than $280 million taken out against properties such as Trump Tower as part of his criminal probe of Donald Trump and his company, according to a new report.
District Attorney Cyrus Vance Jr’s office is investigating the loans made since 2012 by subsidiaries of Ladder Capital, a New York City-based real-estate investment trust, people familiar with the matter told the Wall Street Journal.
The loans were made against the iconic Trump Tower on Fifth Avenue, as well as other Trump Organization properties including 40 Wall Street in the Financial District, Trump International Hotel and Tower on Columbus Circle and Trump Plaza on the Upper East Side, the people said.
The loans add a potential target to the previously disclosed probe, which began as an investigation into hush money payments to two women who claimed they had affairs with Trump, and has widened into examining potential tax, loan and insurance fraud at the Trump Organization.
DA Cy Vance Jr (left) is now looking into loans totaling more than $280 million taken out against properties such as Trump Tower as part of his criminal probe of Donald Trump
The loans were made against the iconic Trump Tower (above) on Fifth Avenue, as well as other Trump Organization properties in Manhattan
Trump has previously called Vance’s probe ‘a fishing expedition’ and ‘a continuation of the witch hunt — the greatest witch hunt in history,’ accusing the elected Democrat of partisan motives.
While the precise object of Vance’s inquiry into the loans wasn’t clear, he could be scrutinizing the loan applications in comparison with other documents, such as tax returns and insurance filings, looking for any discrepancies.
Knowingly providing false information on a loan application is a crime under New York law, as well as federal statutes.
A separate state attorney general’s civil probe into whether Trump’s business falsely reported property values got a boost on January 29, when a New York Supreme Court judge ordered the Trump Organization to turn over documents.
A U.S. Supreme Court decision is expected soon on whether Vance can obtain eight years of Trump’s tax records and other financial information from accounting firm Mazars. Two people familiar with the district attorney’s criminal probe expect the court to act this month.
Both the district attorney and the New York attorney general are focused in part on whether Trump’s businesses improperly falsified values on real-estate assets to secure tax breaks, loans or other benefits.
New York Attorney General Letitia James (above) is also conducting a civil investigation into whether the Trump Organization artificially inflated property values to obtain tax benefits
Also in the spotlight: The New York AG is investigating whether there was a tax fraud involving the Seven Springs Estate in Bedford, Westchester County, north of New York City.
Trump’s tax returns could provide compelling evidence in the criminal probe if they differ significantly from other financial statements reported by the Trump business, said Daniel Horwitz, a white-collar defense lawyer and former Manhattan prosecutor.
But in addition to records, he said, prosecutors will likely need witnesses who could ‘testify about false documents and why they were falsified.’
Lawyers for the Trump Organization did not respond to requests for comment. The Trump Organization has denied in court filings that the company falsified property values, and has rejected other allegations being investigated by Manhattan District Attorney Vance and New York State Attorney General Letitia James.
Trump’s lawyers have tried to block the disclosure of his tax records by appealing the Manhattan district attorney’s request to the U.S. Supreme Court.
Lower courts rejected an argument by Trump’s attorney that the request amounted to political ‘harassment.’
Trump’s team has requested a stay of the Supreme Court proceedings. The high court normally acts quickly on such ’emergency applications,’ but Trump´s request has been pending since October.
Vance’s probe, which began more than two years ago, originally focused on hush money payments made by the president’s former lawyer and fixer Michael Cohen (center)
Another ruling in favor of the district attorney would clear the way for prosecutors to access the tax and financial records.
The Manhattan district attorney said in an August filing that the office is investigating ‘possibly extensive and protracted criminal conduct’ at the Trump Organization.
In a September filing, he said ‘mountainous’ misconduct allegations could justify a grand jury probe into possible tax fraud, insurance fraud and falsifying business records. James’ office has filed a civil lawsuit to compel the Trump Organization to produce documents but has not alleged any crimes.
A spokesperson for Vance declined to comment. A spokesman for James’ office said the Trump Organization has turned over all the documents that prosecutors sought but declined to comment further on the inquiry.
The investigations face challenges. The Manhattan district attorney may struggle to prove that inaccurate property estimates amount to fraud because the standards for valuing properties vary, legal experts say.
Such appraisals are also typically performed by outside parties, potentially putting distance between any controversial valuations and Trump’s businesses.
‘There’s a lot of expertise to hide behind,’ said Joshua Levine, a former assistant U.S. attorney in the Southern District of New York who now specializes in white-collar criminal and regulatory law in private practice.