Trump's bankers questioned by prosecutors in “significantly escalating” criminal probe: report

Manhattan District Attorney Cy Vance is investigating Trump for potential tax, bank, and insurance fraud

By Igor Derysh
December 11, 2020 3:42PM (UTC)
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Donald Trump (Getty Images/Salon)

The Manhattan district attorney's office has interviewed employees of President Donald Trump's bank and insurance broker in a signal that the criminal investigation into the president's business practices has "intensified" just before he leaves office, according to The New York Times.

District Attorney Cy Vance is "significantly escalating" the investigation with interviews of employees from Deutsche Bank, Trump's biggest lender, and insurance brokerage Aon, according to the report. The two companies were among the few financial giants willing to do business with Trump after a series of bankruptcies and defaults in the 1990s. There is no indication either company is suspected of impropriety but their employees "might offer investigators a rich vein of information about the Trump Organization," The Times reported.

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Vance initially launched an investigation more than two years ago into Trump's hush money payments to former adult film actress Stormy Daniels and model Karen McDougal. While that particular line of inquiry has stalled amid a legal battle over the president's tax returns, Vance's probe has since expanded to include potential tax, insurance, and bank fraud, his office said in a court filing earlier this year. More recently, Vance's office has "stepped up" its investigation by issuing new subpoenas and interviewing witnesses, according to the Times. Some witnesses were interviewed before a grand jury. The Times notes that the grand jury appears to be "serving an investigative function" rather than "considering any charges."

Still, the ramped-up criminal probe is the latest sign that Trump could face legal jeopardy after leaving office. Although he has floated the idea of pardoning himself, a dubious idea that has never been challenged in court, the Manhattan probe is out of the reach of any federal pardon.

Vance's criminal investigation is focused on whether Trump and his business committed financial crimes. Vance's office appears to be particularly interested in whether Trump inflated the value of his assets to obtain loans while deflating those same assets when paying taxes, according to the court filing. Former Trump fixer Michael Cohen, who pleaded guilty to paying Daniels on Trump's behalf during the campaign among a number of other federal charges, testified to Congress that Trump inflated his assets while seeking a Deutsche Bank loan in a failed bid to buy the NFL's Buffalo Bills but "deflated his assets to reduce his real estate taxes."

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Trump's allies have alleged that Cohen lied in a bid to reduce his prison sentence. The Trump Organization is "likely to argue… that Mr. Trump could not have duped Deutsche Bank because the bank did its own analysis of Mr. Trump's net worth," The Times reported.

The outlet previously reported that Deutsche Bank officials were well aware that Trump was inflating his assets. "The bankers determined he was overvaluing some of his real estate assets by as much as 70 percent," two former executives said, but decided to approve loans to his company, including one that he used to pay off a loan to another division of the bank.

Vance's prosecutors have interviewed two Deutsche Bank employees about the bank's lending practices, according to the Times, which also noted that neither served as one of the Trump Organization's bankers. Bank officials expect Vance to question more employees in the near future. The bank was subpoenaed in the probe last year and said it is cooperating with prosecutors. Aon also confirmed to the Times that it received a subpoena from Vance's office and said it would cooperate with any document requests.

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The Times also reported last month that Vance's office subpoenaed the Trump Organization for records related to tax write-offs on millions in consulting fees, some of which appear to have been paid to daughter Ivanka Trump. The Times first reported the write-offs after obtaining years of Trump's tax returns and documents, which showed he paid no federal income taxes for years while declaring large business losses.

Trump Organization attorney Alan Garten claimed last month that the subpoena was part of an "ongoing attempt to harass the company" and said that "everything was done in strict compliance with applicable law and under the advice of counsel and tax experts."

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New York Attorney General Letitia James is leading a separate sweeping civil investigation of Trump's business practices. Andrew Weissmann, a former prosecutor on special counsel Bob Mueller's team, predicted that James' probe could "quickly turn into a criminal inquiry."

While Trump faces potential legal jeopardy in New York, the idea of pursuing a federal investigation of Trump has divided President-elect Joe Biden's team and Democrats. Weissmann, who led the successful prosecution of former Trump campaign chief Paul Manafort, argued that it was imperative for the next attorney general to "investigate Mr. Trump and, if warranted, prosecute him for potential federal crimes."

Weissmann said in an op-ed last month that "Trump's criminal exposure is clear," noting that Mueller's team "amassed ample evidence to support a charge that Mr. Trump obstructed justice." The Manhattan and New York state probes "may well reveal evidence warranting additional federal charges."

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"In short," he wrote, "being president should mean you are more accountable, not less, to the rule of law."


Igor Derysh

Igor Derysh is a staff writer at Salon. His work has also appeared in the Los Angeles Times, Chicago Tribune, Boston Herald and Baltimore Sun.

Tips/Email: iderysh@salon.com Twitter: @IgorDerysh

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