Manhattan District Attorney Cyrus Vance Jr. appears to be looking outside the boroughs for evidence of potential tax, insurance, and bank fraud by the Trump Organization. In reports this week from CNN and the Wall Street Journal, sources familiar with Vance’s probe say that his office is investigating the finances of Trump’s Chicago skyscraper and his Seven Springs estate in Westchester county in New York.
On Monday, CNN reported that the Manhattan DA had subpoenaed documents from an investment company, Fortress Investment Management, which loaned the Trump Organization $130 million in 2005 to build its tower in Chicago. By 2012, the firm forgave $102 million of that debt. Now, Vance — as well as New York State attorney general Letitia James — is investigating whether or not Trump’s business reported that forgiven amount and paid taxes on it, as it is required to do by the Internal Revenue Service.
On Tuesday, the Wall Street Journal reported that Vance had sent additional subpoenas to lawyers and engineers involved in the Trump Organization’s Seven Springs complex, where the real-estate developer failed to create a luxury subdivision in the late 1990s. Trump bought the 213-acre property in 1995 for $7.5 million. But over the years, he has valued the property as high as $291 million in statements provided to financial institutions. According to local tax-assessment rolls, however, the market value of the property is shy of $20 million.
The inquiries into the properties in Chicago and Westchester are consistent with the larger aims of Vance’s criminal inquiry — to determine if Trump inflated the value of his properties when it was convenient to obtain loans, and if he underreported income when it was convenient to avoid taxes. One recent development in the investigation will certainly help the district attorney do so: In February, the Supreme Court ruled that Trump had to hand over his tax and financial records to Vance’s office 18 months after the DA first subpoenaed his accountant for them.
