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New York Trump Investigations Appear to Be at Critical Junctures…


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New York Trump Investigations Appear to Be at Critical Junctures…

New York prosecutors and lawyers for President Trump are set to argue before a federal appeals court Tuesday over access to his tax returns, in one of two investigations involving Mr. Trump and his company that appear to be heating up in the state.The hearing, in which Mr. Trump’s lawyers will ask the Second U.S.…

New York Trump Investigations Appear to Be at Critical Junctures…

New York prosecutors and lawyers for President Trump are set to argue before a federal appeals court Tuesday over access to his tax returns, in one of two investigations involving Mr. Trump and his company that appear to be heating up in the state.

The hearing, in which Mr. Trump’s lawyers will ask the Second U.S. Circuit Court of Appeals to block the enforcement of a subpoena, comes in a yearlong dispute between the president and the Manhattan district attorney. Both this criminal investigation and a separate civil one, by the New York attorney general, appear to be at critical junctures, as lawyers for the offices are engaged in court battles over what they say is important information for their investigations.

A lawyer for Mr. Trump and a spokeswoman for the Trump Organization didn’t respond to requests for comment. Mr. Trump has called the investigation by the Manhattan district attorney, a Democrat, the “worst witch hunt in American history.”  The Trump Organization spokeswoman has previously said the attorney general’s probe is all about politics.

Both law-enforcement agencies have disclosed information in legal documents relating to the document and witness disputes, but some other details remain unknown.

In the criminal investigation, Manhattan District Attorney Cyrus Vance Jr. subpoenaed financial records, including eight years of tax returns, from the president’s accounting firm in August 2019. Mr. Trump sued the next month to block the subpoena.

Manhattan District Attorney Cyrus Vance Jr. subpoenaed financial records from the president’s accounting firm.



Photo:

jeenah moon/Reuters

The district attorney is conducting a financial investigation into possible insurance or bank fraud, the office said in court documents filed earlier in August. The office referenced public accusations of fraudulent financial activities, including allegations the president inflated his assets and property valuations to lenders and investors to secure loans and obtain tax benefits. Mr. Vance also has requested documents related to hush-money payments made to Stormy Daniels and Karen McDougal, both of whom claim they had affairs with the president. Mr. Trump has denied the affairs.

Mr. Trump in 2016 broke with four decades of precedent for presidential candidates by declining to release his tax returns.

Three courts, including the U.S. Supreme Court, denied the president’s attempt to stop state prosecutors from obtaining the records. The high court in July sent the case back to U.S. District Judge Victor Marrero.

On Aug. 20, Judge Marrero again dismissed the lawsuit, calling Mr. Trump’s arguments “substantially the same” as those in his first attempt. Mr. Trump has said the subpoena was overbroad, was issued to harass him and that a sitting president is immune from criminal investigation.

The president asked the appeals panel to temporarily block enforcement of the subpoena until it rules on the case itself, leading to Tuesday’s arguments.

Mr. Trump and the Trump Organization also face a civil probe from the office of New York Attorney General Letitia James, a Democrat. In that investigation, according to court documents, Ms. James is looking at whether Mr. Trump and his company improperly inflated the value of his assets on financial statements to obtain loans and get economic and tax benefits.

New details of the investigation were revealed last week in court filings in which Ms. James asked a judge to order the Trump Organization to provide documents and the testimony of people including Eric Trump, the president’s son.

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The New York attorney general’s office, which opened its investigation after former Trump lawyer Michael Cohen testified before Congress last year, said last week it has been stonewalled for months by the Trump Organization. Some of the disputes between the attorney general and the Trump Organization were over what testimony and documents were subject to attorney-client privilege.

The Trump Organization spokeswoman has previously said the organization tried to cooperate with the investigation in good faith.

The state attorney general’s office has said it is looking at financial dealings around Seven Springs Estate, a 212-acre property in Westchester County; 40 Wall Street, a mixed-use building in lower Manhattan; Trump International Hotel & Tower Chicago; and Trump National Golf Club Los Angeles.

The office has said it brought the civil investigation under a state law that allows it to probe possible repeated fraud or illegality. The office typically attempts to shut down a company only in extreme cases, like if there was little or no legitimate business activity, said Scott Wilson, a former senior official at the New York attorney general’s office.

The state attorney general’s office has said it is looking at financial dealings around Seven Springs Estate, a 212-acre property in Westchester County.



Photo:

Craig Ruttle/Associated Press

“At the end of the day, if the investigation uncovers illegal activity, they would likely seek an order to stop that conduct and direct restitution or damages be paid,” said Mr. Wilson, now a partner at law firm DLA Piper.

Ms. James could also refer the case to a local law-enforcement agency or ask permission for her office to open a criminal investigation.

Both investigations could continue well after the election. Mr. Vance’s office has said it won’t enforce the subpoena until shortly after the appeals court issues a decision on Tuesday’s arguments. Even then, if the office obtains the financial documents they are subject to grand-jury secrecy rules and are unlikely to be made public before the November election.

A court date hasn’t been scheduled in the dispute with the attorney general.

Write to Corinne Ramey at Corinne.Ramey@wsj.com and Deanna Paul at deanna.paul@wsj.com

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