New York investigations of the Trump Organization
Two related investigations by New York State and City officials were opened by 2020 to determine whether the Trump Organization has committed financial fraud. One of these is a criminal case being conducted by the Manhattan district attorney and the other is a civil case being conducted by the New York State Attorney General. The DA's case has led to two of the organization's subsidiary companies being found guilty of 17 charges including tax fraud and the indictment of Donald Trump, while the AG has succeeded in imposing an independent monitor to prevent future fraud by the organization.
By mid-2021, New York AG Letitia James had joined the DA's criminal probe, with the latter convening a grand jury. Prosecutors filed 10 charges against the organization, alleging that it had conducted a "scheme to defraud" the government, and 15 felony counts against longtime chief financial officer Allen Weisselberg—who invoked his Fifth Amendment right against self-incrimination more than 500 times in his testimony. In August 2022, Weisselberg pleaded guilty and agreed to testify against the organization in exchange for a reduced sentence. In December, the organization was convicted of all 17 criminal charges it faced. Evidence including the testimonies of Weisselberg and others indicate that he and other executives—as well as the two subsidiaries—participated in fraudulent schemes, including recording some employee bonuses as pay for contract work. A number of illegal practices were ceased around the time of Trump's election as U.S. president.
In 2020, Eric Trump pleaded the Fifth over 500 times in his testimony for the AG. In November 2021, The Washington Post reported that between 2011 and 2015 the organization presented several properties as being worth far more to potential lenders than to tax officials. Donald Trump reportedly pleaded the Fifth more than 400 times in his August 2022 deposition. In September, James filed a civil lawsuit against Trump, his three oldest children, and the organization for alleged fraud. Additionally, she referred the case to federal criminal prosecutors and the Internal Revenue Service. In November, the New York judge overseeing the lawsuit appointed retired judge Barbara S. Jones to monitor the organization, with a trial being held from late 2023 to early 2024.
Background
The financial statements of the Trump Organization's holdings are private, and there exist a wide range of estimates of the organization's true value. Donald Trump has been accused on several occasions of deliberately inflating the valuation of Trump Organization properties through the aggressive lobbying of the media, in particular the authors of the annual Forbes 400 list, in order to bolster his perceived net worth among the public over several decades. He has released little definitive financial documentation to the public to confirm his valuation claims.It is difficult to determine a net value for the Trump Organization's real-estate holdings independently since each individual property may be encumbered by debt.
In October 2015, Forbes published an article detailing its decades-long struggle to estimate the true net worth of Trump and the organization. In 2018, a former Forbes journalist who had worked on the Forbes list claimed in an to The Washington Post that Trump had lied about his wealth to Forbes to get on the list repeatedly and suggested that Forbess previous low-end estimates of Trump's net worth were still well above his true net worth.
On a Schedule C form filed in 1984 for a purported consulting business, Trump reported no income but over $600,000 in unknown expenses. After New York State and City auditors rejected the unexplained expenses, Trump requested a tax trial. In separate 1992 trials, state and city judges ruled against Trump. In the city case Trump's only witness was the lawyer and accountant who prepared his returns for over 20 years, who testified that although it had his signature he did not prepare the 1984 return he was presented a photocopy of ; Trump asserted that he had been subjected to double taxation, in response to which the judge wrote that "The problem at issue is of no taxation." In June 2016, investigative journalist David Cay Johnston argued that the proceedings demonstrated evidence of intentional tax fraud and that Trump should release his tax returns to disclose whether he had repeated such behavior.
In a defamation case against TrumpNation author Timothy L. O'Brien, Donald Trump testified in 2007 that "I think everybody" exaggerates their property values and that he did not do so "beyond reason". He said he would give his opinion to chief financial officer Allen Weisselberg, who "predominately" determined final values, which Trump called "conservative". Regarding one case in which a property increased from $80 million in 2005 to $150 million in 2006, Trump stated, "The property was valued very low, in my opinion, then and it became very—it just has gone up." He was unable to provide a reason for this other than his opinion. Between 2011 and 2015, the Trump Organization presented several properties as being worth millions of dollars—in one case over $500 million—more to potential lenders than to tax officials; this was reported by The Washington Post in November 2021. In January 2017, ahead of Trump's inauguration as U.S. president, his attorney Sheri Dillon announced that the organization's businesses would be transferred to a trust controlled by Trump's sons Donald Jr. and Eric Trump, as well as Weisselberg.
In October 2018, The New York Times published a lengthy exposé concerning Donald Trump's inheritance from his parents, Fred and Mary Anne MacLeod Trump. It includes detailed analyses of Trump family financial records. The article describes an alleged tax fraud scheme conducted by Trump and his siblings related to their joint inheritance of their parents's real estate holdings, effectively evading over $500 million in gift and estate taxes. The alleged schemes involve money from the companies being siphoned to the children throughout their lives and understating the value of transferred properties. The New York State Department of Taxation and Finance announced on the day of the exposé's publication that it would review the allegations. In mid-2021, Mary L. Trump elaborated on how the organization used a shell corporation to siphon money, devaluing Fred Trump's "core business" to $30 million at the time of his death.
In August 2018, Manhattan District Attorney Cyrus Vance Jr. was reportedly considering a criminal investigation of the organization and two of its senior executives for their reimbursement of then-Trump personal attorney Michael Cohen for his hush-money payment to Stormy Daniels; the organization recorded the reimbursement as a legal expense although Cohen did no legal work in the matter. In August 2019, Vance subpoenaed the organization's accountants, Mazars, for Trump's tax returns. In July 2020, the U.S. Supreme Court ruled that Trump's tax records could be released to prosecutors, producing millions of pages of documents, reportedly including Trump's returns from January 2011 to August 2019. In November 2022, the DA's office was reportedly again scrutinizing the hush-money affair, leading to Trump's indictment. Following a Supreme Court ruling, the U.S. Treasury Department released Trump's returns from 2015 to 2020 to the House Ways and Means Committee, and following the committee's vote, the returns were released to the public before the end of the year.
In February 2019, prompted by U.S. House Representative Alexandria Ocasio-Cortez asking whether Trump had ever presented inflated assets to an insurance company, Cohen testified to Congress that Trump "inflated total assets when it served his purposes, such as trying to be listed amongst the wealthiest people in Forbes, and deflated his assets to reduce his real estate taxes." Following Cohen's testimony, in March, the New York State Department of Financial Services issued a subpoena to Aon, the organization's longtime insurance broker. The same month, the office of New York Attorney General Letitia James began investigating the organization, having stated that she intended to do so during her 2018 campaign. By September 2019, the organization was under federal investigation by the Southern District of New York regarding inflated insurance claims allegations. By December, James's office had subpoenaed the organization for some records which it subsequently failed to provide for at least 21 months.
Criminal investigation
By 2020, the Manhattan district attorney had opened a criminal investigation to determine whether The Trump Organization, including any individuals or business entities associated with it, had committed financial fraud. The investigation led to three grand juries being convened, two of which approved indictments.The first indictment named longtime Chief Financial Officer Allen Weisselberg and two Trump Organization business entities. Evidence against the organization indicated that Weisselberg and other executives—as well as the two subsidiaries—participated in fraudulent schemes, including recording some employee bonuses as pay for contract work. Prosecutors filed 10 charges against the organization, alleging that it had conducted a "scheme to defraud" the government, and 15 felony counts against Weisselberg, who agreed to a plea deal in August 2022, during Manhattan DA Alvin Bragg's tenure. Both business entities were convicted of 17 charges including tax fraud in a trial in late 2022.
The second indictment charged Donald Trump was criminally indicted with 34 felony counts of falsifying business records in tandem with an alleged catch and kill operation to suppress negative press during his 2016 campaign, largely revolving around the hush-money payment to pornographic actress Stormy Daniels. On April 4, 2023, he pleaded not guilty. The trial began in April 2024, and in May a jury convicted Trump on all 34 counts. The judge consented to two defense sentencing delay requests, resulting in it being scheduled for after the 2024 election.
Some conservative pundits denounced the investigation, with the Republican National Committee paying some of Trump's legal fees, while Democrats generally endorsed it. After Trump's indictment, Republican U.S. House Judiciary Committee Chair Jim Jordan organized a hearing against Bragg, leading the DA to sue him for alleged interference.