After making efforts to untangle the Trump Organization’s assets, which they described as intricate as a “Russian nesting doll,” lawyers with the New York State Attorney General’s Office claimed they are virtually through with their civil investigation into the Trump Organization.
They still want to search two of former President Donald Trump’s cell phones, as well as his longtime executive assistant Rhona Graff’s laptop and desktop, but investigators told a judge last week that they’re moving rapidly.
“The process is near the end,” Kevin Wallace, senior enforcement counsel at the New York State Attorney General’s Office, said Monday.
The attorney general’s office has identified 151 custodians, or people or entities, who may hold records sought by the office, but Wallace said they are focusing on the “most essential unresolved pieces of evidence” because time is running out to launch a case.
The statute of limitations for the different statutes under examination is several years old, but the tolling deal with the Trump Organization, which halted the clock, expires on Saturday. Even when the deal ends, the attorney general’s office may take several weeks to decide what to do next in the probe.
The remarks were made during a court hearing on Monday when New York state Judge Arthur Engoron found Trump in civil contempt and penalized him $10,000 per day for failing to comply with a subpoena for documents related to the Trump Organization’s finances in New York. (On Wednesday, Trump filed an appeal against the order.)
After the judge asked them to explain why their investigation has taken so long and where it is going, lawyers with the New York State Attorney General’s Office gave an insight into their three-year inquiry.
“Given the upcoming end of the tolling agreement we will likely need to bring some kind of enforcement action in the near future to preserve our rights,” Wallace said. He noted that before they file the attorney general’s office has agreed to meet with the Trump Organization attorneys and “allow them to make their case” and discuss what any “appropriate resolutions might look like.”
Wallace pointed out that, in addition to the tolling agreement’s expiration, evidence may get old and recollections may fade. “Counsel is in favor of moving as quickly as we can.”
For years, Trump has been the subject of a civil probe. He’s been focusing on the inquiry that threatens his family’s business, labeling Attorney General Letitia James a “racist” who is chasing him for political benefit.
The attorney general’s office has already stated in court filings that it believes Trump’s financial statements, which were submitted to lenders and insurers and utilized for tax purposes, contained deceptive representations and omissions. The probe has been dubbed a witch hunt, and Trump and his company have denied any wrongdoing.
Trump, Donald Trump Jr., and Ivanka Trump have already been ordered to take depositions by the judge. Trump has filed an appeal, and it’s unclear when they’ll get a judgment. In 2020, Eric Trump was impeached after asserting his Fifth Amendment protection against self-incrimination over 500 times. The judge ordered the Trump Organization to comply with subpoenas by Friday last month, at the request of the attorney general.
Because the Trump Organization has refused to cooperate with the probe, Wallace said the office began with an “unguided tour” based on financial statements submitted to Congress by Trump’s former personal attorney Michael Cohen in February 2019. According to him, the lawyers discovered a corporation that lacked the systems and controls often seen in regulated industries such as banking. The Trump real estate business is handled as a tiny family business, despite the fact that it owns a lot of golf courses, condos, hotels, and office space.
“The company relies more on its people than its systems,” Wallace said. According to him, there are 500 separate entities, millions of dollars in circulation, and various accounting processes and statements depending on the business unit.
Alina Habba, an attorney for Trump, said at the hearing Monday that the attorney general’s office served the first of six subpoenas to the Trump Organization in December 2019. Millions of pages of papers have been turned over so far, and 13 Trump Organization personnel have been interrogated, she said. According to court documents, those named include Allen Weisselberg, the Trump Organization’s long-serving chief financial officer; Alan Garten, the Trump Organization’s general counsel; and Jeffrey McConney, the controller, as well as McConney’s deputy and other finance staffers.
Trump’s golf course in Jupiter, Florida, is an example of the industry’s complexity. They’ve been pulling on strands to see if it was “presented fairly” in Trump’s financial accounts, according to Wallace.
He said the golf club, which he bought for $5 million in 2012, was included in a $2 billion pool of club assets on the financial statement. There were no footnotes describing the contents of the bundle. Trump valued the course at $46 million, according to the supporting documents. Investigators then tried to figure out where the extra $41 million came from, which led them down other investigative lines, according to him.
“These issues repeat across clubs,” Wallace said. “Each of these assets is like a Russian nesting doll.”
Habba said, “There were multiple layers and multiple people because that’s how real estate companies operate.”
She said that the financial statements at the center of the attorney general’s probe were a family-owned business’s unaudited compilation.
“These are sophisticated banks and companies,” she said. “No one was lending us money without their own vetting.”
“Quite honestly, I would love to go into the particulars of my client’s properties, some of which are grossly undervalued, but I don’t think we’re at that stage yet,” Habba argued.