President Donald Trump
Tom Brenner | Reuters
President Donald Trump and his business could be facing a criminal tax probe by the Manhattan District Attorney’s office, prosecutors suggested Monday in a court filing.
Prosecutors from Manhattan DA Cyrus Vance Jr.’s office raised that possibility as they said that a grand jury subpoena seeking eight years of Trump’s tax returns and other records from the president’s accountants should be allowed by a federal appeals court, which is set to hear arguments in this case this week.
While prosecutors last month suggested that they might be eyeing the Trump Organization for possible bank and insurance fraud, Monday’s filing was the first time they had publicly said that their probe might encompass potential tax crimes.
Before last month, reports had suggested that Trump’s company was under investigation for how it accounted for hush money payments made to two women who said they had affairs with Trump, who has denied their claims.
Trump’s lawyers have argued that the subpoeana is “overbroad” and was issued “in bad faith.”
But Vance’s team said in Monday’s court filing that the subpoena is more than justified by news reports that have raised the prospect that Trump and his company misstated the values of their business properties at different times.
The filings said that if misstatements about business properties were conveyed from the Trump Organization’s headquarters in New York to business partners, insurers, potential lenders or tax authorities, that could mean the breaking of state laws such as scheme to defraud, falsification of business records, insurance fraud and criminal tax fraud, the filing said.
Vance’s office also said in the filing that the scope “of the subpoena is moderate when compared to the temporal scope of misconduct alleged in public reports. “
“The New York Times reported that Appellant engaged in ‘dubious tax schemes during the 1990s, including instances of outright fraud’ and that he ‘helped his parents dodge taxes’ by ‘set[ting] up a sham corporation to disguise millions of dollars in gifts’ and undervaluing assets,” the filing said.
Trump’s lawyer, Jay Sekulow, did not immediately respond to a request for comment. A spokesman for Vance declined to comment.
The Supreme Court ruled this summer that Trump did not have an absolute right to avoid having his tax returns and other financial records subpoenaed by a state prosecutor while serving in the White House.
But the Supreme Court also allowed the president to continue to challenge the subpoena, which was issued at Vance’s behest, on other grounds, in lower federal court.
A federal judge in Manhattan last month rejected new arguments by Trump’s lawyers to block the subpoeana.
Trump then appealed that ruling the U.S. Court of Appeals for the 2nd Circuit.
A hearing on the appeal is scheduled for Friday.