NY Prosecutor Hires Forensic Accountants as Criminal Investigation Into Trump Organization Escalates

By Shayna Jacobs and Jonathan O'Connell, The Washington Post

30 December 20

he Manhattan District Attorney's Office has retained forensic accounting specialists to aid its criminal investigation of President Trump and his business operations, as prosecutors ramp up their scrutiny of his company's real estate transactions, according to people familiar with the matter.

District Attorney Cyrus R. Vance Jr. opened the investigation in 2018 to examine alleged hush-money payments made to two women who, during Trump’s first presidential campaign, claimed to have had affairs with him years earlier. The probe has since expanded, and now includes the Trump Organization's activities more broadly, said the people familiar with the matter. Vance’s office has suggested in court filings that bank, tax and insurance fraud are areas of exploration.

Vance has contracted with FTI Consulting to look for anomalies among a variety of property deals, and to advise the district attorney on whether the president’s company manipulated the value of certain assets to obtain favorable interest rates and tax breaks, according to a person with knowledge of the investigation who, like others, spoke on the condition of anonymity because the matter remains highly sensitive. The probe is believed to encompass transactions spanning several years.

Spokesmen for Vance and FTI Consulting declined to comment.

Representatives for the Trump Organization did not respond to a request for comment. In the past, company officials have rejected the merits of Vance’s investigation, calling it politically motivated.

Headquartered in Washington, FTI provides a range of financial advisory services to clients worldwide in public and corporate sectors. “We provide the industry's most complete range of forensic, investigative, data analytic and litigation services,” according to a corporate brochure, which also noted FTI’s “extensive experience serving leading corporations, governments and law firms around the globe.”

The analysts hired by Vance probably have already reviewed various bank and mortgage records obtained from Trump’s company as part of the ongoing grand jury investigation, and they could be called on to testify about their findings should the district attorney eventually bring criminal charges, said the person familiar with the arrangement.

Vance is engaged in a long-running legal battle to obtain eight years of Trump’s tax records and other financial information from the president's accounting firm, Mazars USA. Those records are considered the final piece of what is already a well-developed investigation, according to the person.

In July, the U.S. Supreme Court rejected Trump’s argument that, as president, he is immune from state court proceedings. Since then, he has argued that the subpoena for his financial information is deficient, amounts to political “harassment” and was issued in “bad faith.”

Though lower courts have rejected those arguments as well, the matter is once again before the Supreme Court. Trump has requested a stay, or a suspension of the proceedings, in his fight with Vance. If the president’s request is denied, the district attorney’s office should get immediate access to his tax records.

Jason Zirkle, with the Association of Certified Fraud Examiners, said that in addition to FTI's specialized services, Vance, who is a Democrat, may be hoping that the inclusion of an outside firm will offer a veneer of neutrality and help deflect criticism that his probe is politically motivated.

In Trump, “you have a very high-profile person who is polarizing,” Zirkle said, “and then you also have a district attorney who is elected. You can't ignore those facts, and that they're both of different political parties.” Vance can now say, “We've gotten with a global advisory firm . . . that can come in and take an objective look at this, and we’re outsourcing everything to them in the way of the analysis so that it doesn't look like we're just going after Donald Trump,” Zirkle added.

It is possible Vance could find evidence that the Trump Organization as a business entity has broken the law, without attaching personal liability to Trump or other individuals at his company. To bring criminal charges, the district attorney must be able to prove there was an intent to break the law — which probably would require the testimony of an insider witness, experts have said.

It’s unclear whether Vance has secured such testimony, though in recent weeks his team has spoken with employees at Deutsche Bank, a major lender for the Trump Organization, and the insurance brokerage Aon. Those discussion were first reported by the New York Times. Prosecutors have issued new subpoenas and met with witnesses at a steady pace, people familiar with the process have said.

A spokeswoman for Aon, Nadine Youssef, confirmed that the insurance company received a subpoena from the district attorney’s office but declined to discuss what records had been requested.

“As is our policy, we intend to cooperate with all regulatory bodies,” Youssef said. “We do not comment on specific client matters.”

A spokesperson for Deutsche Bank declined to comment.

Vance’s probe is one of two investigations in New York that could pose serious legal peril for the president once he leaves office next month. New York Attorney General Letitia James is overseeing a civil investigation into the Trump Organization and its business operations. There appears to be at least some overlap in the deals and loans that are under review by the two agencies.

Additionally, the president faces separate defamation lawsuits brought by two women who have accused him of sexual assault.

His niece, Mary L. Trump, is suing him and his siblings as well over a multimillion-dollar inheritance dispute. He’s also being sued by the tenants of several apartment buildings his family once owned, and by people who say they saw little to no profit after joining a multilevel marketing organization touted by Trump and his children.

In all instances, Trump or his representatives have denied any wrongdoing.