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Merged probe adds muscle, resources to Trump criminal investigation

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New York State Attorney General, Letitia James, announces a lawsuit by the state of New York against e-cigarette maker Juul Labs Inc in New York City, U.S., November 19, 2019. REUTERS/Lucas Jackson/File Photo

May 19 (Reuters) - By joining forces in a newly combined criminal probe of former U.S. President Donald Trump’s finances, the New York attorney general and the Manhattan district attorney have opened new avenues to sharing critical information that could speed indictments in the sprawling investigation.

Investigators for both Manhattan District Attorney Cyrus Vance Jr. and New York Attorney General Letitia James have been focused on some of the same questions: whether Trump or his representatives committed fraud by improperly manipulating the values on some of the Trump Organization’s signature properties, pushing them up to secure loans from banks, and writing them down to reduce his property taxes.

In a brief statement late on Tuesday, James’ office said the investigation into the Trump Organization was now considered a criminal matter and officials with Trump’s company were informed. She would now work closely with Vance, who has led a criminal probe into the company and its officers since 2018.

Two assistant attorneys general from James’ office are joining Vance’s team to work on the criminal investigation, according to a source familiar with the inquiry. The attorney general will go on pursuing a civil investigation into Trump’s finances.

Vance and James have not accused Trump or his associates of wrongdoing, but prosecutors in both offices have spent months gathering information and testimony from bankers, bookkeepers, real-estate consultants and others close to the Trump Organization who could detail its operations, according to interviews and court filings.

The Manhattan DA has authority to handle all crimes in Manhattan, including financial crime. The attorney general’s office has statewide jurisdiction, but it also has a criminal enforcement and financial crimes bureau focused primarily on securities and tax fraud, with its own authority to prosecute complex financial crimes that cross county lines.

“What does it mean for Trump? It's clearly not good in the sense that you now have a combining of resources, information and evidence,” said Daniel Horwitz, a white-collar defense lawyer and former Manhattan prosecutor. “It's a muscling up and a sharing of resources.”

In a statement, Trump said he was “being unfairly attacked and abused” and vowed to “overcome” any criminal prosecution. “There is nothing more corrupt than an investigation that is in desperate search of a crime.”

Lawyers for Trump and his business did not immediately return requests for comment.

Vance has said he is examining “possibly extensive and protracted criminal conduct” by the Trump Organization and obtained millions of pages of Trump’s tax records in February after the U.S. Supreme Court ruled that Trump did not have the right to shield them.

Trump already faces multiple government investigations at the local, state and federal level, including a criminal probe in Fulton County, Georgia, where the district attorney is investigating whether Trump violated election laws by pressing state officials to overturn President Joe Biden’s 2020 victory in that state. Several congressional committees also are probing Trump’s financial affairs.

Separately, the former president faces an array of private lawsuits related to business disputes and other charges. He also is a defendant in several lawsuits alleging that he incited his supporters to attack the U.S. Capitol on Jan. 6 as Congress was certifying the presidential election results.

“I do believe that indictments will be issued shortly, and definitely before summer's end," Trump's former lawyer Michael Cohen, who has been interviewed by Vance’s investigators, told Reuters. Cohen pleaded guilty in 2018 to campaign finance violations and other crimes and is currently serving his three-year sentence under home confinement.

PRESSURE ON WEISSELBERG

Both the New York attorney general and Manhattan DA investigations have shown interest in Allen Weisselberg, 73, chief financial officer at the Trump Organization, where Weisselberg has served for decades as a trusted Trump confidant, managing both his personal and business finances.

The attorney general’s office, while pursuing a separate civil investigation, deposed Weisselberg last summer, and the DA’s office also has pressured him to cooperate, according to people familiar with the investigation.

“Now, they can put it all together,” said Jennifer Weisselberg. Her ex-husband, Weisselberg’s son Barry, is a Trump Organization employee.

“To build a case against Allen, they have to connect the dots, all the stuff that both (offices) have collected, and now they can do that,” she told Reuters.

Jennifer Weisselberg has been cooperating since last fall with investigators from both the attorney general’s office and the district attorney’s office.

She said she has turned over boxes of financial documents, including records on a Trump Organization apartment overlooking Manhattan’s Central Park where she and Barry lived rent-free while they were married, as well as another Trump-owned apartment where Barry lived after they divorced.

Both offices are looking at those arrangements and whether the apartments, which could be considered gifts if provided for free, were accounted for properly in tax and financial filings, she said.

“I think they’re building a case against Barry to get Allen to flip,” she said.

A lawyer for Allen Weisselberg, Mary Mulligan, declined to comment. A lawyer for Barry Weisselberg did not immediately respond to a request for comment.

One Trump property scrutinized in both investigations is Seven Springs, a 212-acre estate in Westchester County, New York. The attorney general’s statewide jurisdiction may make it easier to bring charges related to that property, experts said.

After a long and failed effort to develop the property as a golf course and luxury home site, Trump in 2015 took a $21.1 million tax break in the form of a conservation easement, a legal promise to leave 158 acres of the property undeveloped.

Vance has subpoenaed planning records related to Seven Springs from nearby towns, while James’ investigators, in court filings, have cited emails from an appraiser who suggested Trump’s representatives were applying pressure to push that value higher.

“When you combine what each side has learned, they may be able to more quickly fill out a picture that could lead to indictments of the president,” said Claire Finkelstein, a University of Pennsylvania law professor, adding that the combination will bring “more information, more firing power and an ability to broaden the scope of a criminal investigation.”

Rebecca Roiphe, a New York Law School professor, says James’ involvement also creates an opening for Trump to attack the investigation’s legitimacy. When James campaigned for office in 2018, she criticized Trump as an “illegitimate president” and vowed to explore his business dealings.

“That certainly creates a shadow,” she said. “The question is whether or not having these two investigations joined would ultimately have an impact on the legitimacy of any prosecution.”

Additional reporting and editing by Jason Szep; Editing by Howard Goller

Our Standards: The Thomson Reuters Trust Principles.

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