Another criminal investigation of Trump Organization and another potential witness against Rep. Matt Gaetz

Trump investigations

New York Attorney General Letitia James notified the Trump Organization last week that she is now conducting a criminal investigation into the company. James’ public statement suggests her office is working with Manhattan District Attorney Cyrus R. Vance Jr., who has been investigating potential crimes committed by the former president’s company since 2018.

“We have informed the Trump Organization that our investigation into the organization is no longer purely civil in nature. We are now actively investigating the Trump Organization in a criminal capacity, along with the Manhattan DA. We have no additional comment.”

A person familiar with the investigation said a couple of investigators with the New York attorney general’s office, who are steeped in knowledge about the Trump Organization, have joined the district attorney’s team. A different person familiar with the matter said the New York attorney general is still conducting a civil investigation.

Based on previous reporting, it appears likely that the AG and DA are focusing on financial crimes. Since the last time James told the court her probe was restricted to civil matters, her office won a court ruling to obtain documents related to Trump’s Seven Springs estate, which he used to obtain a $21 million tax break in 2015.

There are three main differences between a civil and criminal case:

  1. A civil case would pursue mistakes due to negligence or recklessness. A criminal case involves knowing intent to defraud.
  2. A civil case must be proven by a preponderance of the evidence, or more than 50% certainty. Criminal cases, on the other hand, must be proven beyond a reasonable doubt. Cornell Law School: “This means that the prosecution must convince the jury that there is no other reasonable explanation that can come from the evidence presented at trial.”
  3. Penalties in a civil case are limited to monetary damages and injustice relief, or a court order to stop an act/to act in a certain way. For instance, a bankruptcy injunction stops creditors from taking money and assets. Penalties of a criminal conviction can include monetary fines, too, but also prison sentences.

The Daily Beast explained what kinds of criminal evidence may have been found:

One other point about the timing of James’ decision to convert a civil investigation into a criminal one: IRS auditors are trained that when conducting civil audits that they are to make criminal referrals once firm indications of fraud are unearthed. This means that evidence may have been obtained demonstrating that financial records were intentionally and/or willfully falsified or concealed in some fashion.

Classic indicators of criminal fraud have been held by the courts to be the use of more than one set of books and records; the use of false invoices; the use of shell companies to conceal financial transactions, and the altering of books and records and false statements by the subjects of the investigation.

A key part of AG James’ criminal investigation is reportedly Trump Organization Chief Financial Officer Allen Weisselberg. According to the New York Times, both James and Vance are looking at whether taxes were paid on a slew of fringe benefits Trump handed out to his executives. Weisselberg’s former daughter-in-law provided James with documents related to his personal finances, potentially giving investigators the evidence they need to pressure Weisselberg into flipping on Trump.

Weisselberg’s former daughter-in-law, Jennifer Weisselberg, has been interviewed by the district attorney’s office, she told ABC News, and was asked about everything from school tuition, the family apartment and several cars.

“Some of the questions that they were asking were regarding Allen’s compensation at the apartment at Trump Place on Riverside Boulevard,” Jennifer Weisselberg told ABC News in an interview earlier this month.

When asked under oath about Allen Weisselberg, Ivanka Trump acted unfamiliar with him – the Trump Organization’s CFO and Trump’s personal bookkeeper for decades.

“Who is Allen Weisselberg?” Ivanka Trump was asked in a deposition in December with investigators from the District of Columbia Attorney General’s Office as part of its lawsuit alleging the misuse of inaugural funds.

“He is the — I would have to see what his, his — I don’t know his exact title but he’s an executive at the company,” she responded, according to a transcript released earlier this year.

Giuliani investigation

Former Trump lawyer Rudy Giuliani is attempting to shield the evidence collected by the FBI from his apartment and business under attorney-client privilege claims. His legal team took particular issue with a 2019 search of his iCloud account, which was not disclosed until last month. They – bafflingly – publicly argue that the public shouldn’t find out about the FBI’s concern over the potential for Giuliani to destroy evidence:

In addition, in the original warrant for the iCloud account, there is a non-disclosure order based upon an allegation made to the issuing Court, that if Giuliani were informed of the existence of the warrant, he might destroy evidence or intimidate witnesses. Such an allegation, on its face, strains credulity. It is not only false, but extremely damaging to Giuliani’s reputation.

Giuliani’s team is challenging this earlier warrant under the premise that it violated attorney-client privilege and executive privilege:

During this period, as the Government was aware, Giuliani was acting as the President’s attorney, as well as representing others, some of whom were being investigated by the Southern District of New York…These seizures were not only unnecessary but also constituted a monumental, and heavily publicized, breach of the attorney-client privilege, [and] the Executive privilege… [PDF]

Due to his status as a prominent lawyer, Giuliani argues, he should be given the right to decide what evidence taken from his properties should be allowed to go to the government. Prosecutors disagreed, saying that “the mere fact that Giuliani and Toensing are lawyers does not mean that they are above the law or immune to criminal investigation.” As in other cases involving the investigation of a lawyer, the DOJ has asked a judge to appoint a special master – an independent party – to review the recently seized materials for potentially privileged material.

Under their approach, the subjects of a criminal investigation would have the authority to make unilateral determinations not only of what is privileged, but also of what is responsive to a warrant… Moreover, not only does the law preclude Giuliani and Toensing’s proposal to themselves perform a responsiveness review; it is also wholly inappropriate because Giuliani and Toensing are simply not equipped to perform one. They do not know (and are not entitled to know) everything the Government has learned over the multi-year grand jury investigation, and would therefore inevitably disregard potentially valuable evidence to the investigation. [PDF]

In addition to the federal probe of Giuliani’s potentially illegal foreign lobbying, the Justice Department has also been asking about Giuliani’s work related to Romania. While working as a lawyer to President Trump, Giuliani sent a letter to Romanian President Klaus Iohannis on behalf of a global consulting firm called Freeh Group International Solutions. In the letter, he did not disclose that he was paid by the Freeh Group, which was representing a Romanian property mogul in a real estate fraud case.

Despite Giuliani’s extensive work for the former president, Trump has so far ignored calls from allies to come to the attorney’s aid. The Daily Beast reported that Giuliani’s associates have asked Trump to issue a statement that Giuliani’s Ukraine work – e.g. lobbying for the ouster of Ambassador Marie Yovanovitch – was gone on behalf of the president. They have also urged Trump to intervene in the legal fight over devices seized from Giuliani to bolster attorney-client privilege and executive privilege claims.

Calls to assist Giuliani have not stopped at legal intervention; allies want Trump and Republican committees to financially contribute to his defense:

“I want to know what the GOP did with the quarter of $1 billion that they collected for the election legal fight,” Bernard Kerik, the former New York City police commissioner, wrote on Twitter on Sunday. Mr. Giuliani appointed Mr. Kerik when he was mayor of New York. Using expletives, Mr. Kerik added that “lawyers and law firms that didn’t do” much work were paid handsomely, while those who worked hard “got nothing.”

Mr. Kerik has made similar complaints to some of Mr. Trump’s advisers privately, according to people familiar with the conversations, arguing that Mr. Giuliani has incurred legal expenses in his efforts to help Mr. Trump and that Mr. Giuliani’s name was used to raise money during the election fight.

So far, neither Trump nor the GOP has come to Giuliani’s aid.

In addition to being under federal criminal investigation, Giuliani has been sued by Dominion Voting Systems, Smartmatic, Rep. Eric Swalwell, and Bennie Thompson/NAACP. On Monday, the former mayor moved to dismiss himself as a defendant in Swalwell’s civil suit over the insurrection, during which Giuliani told Trump supporters to “have trial by combat”. His legal team now says his words were “hyperbolic” and “not literal”.

“Plaintiff would have the Court believe that what the FBI has been unable to do — tie Defendants to a vast conspiracy to mastermind the attack on the Capitol — Plaintiff will accomplish through this litigation. This is simply too far-fetched and outlandish to pass the plausibility standard of the law.” [PDF]

Gaetz investigation

An ex-girlfriend of Rep. Matt Gaetz has reportedly agreed to cooperate in the federal investigation against him. The woman, a former staffer on Capitol Hill, has been involved with Gaetz since 2017. CNN calls her a “critical witness” due to her knowledge of the time frame in question, when Gaetz associate – and cooperating witness – Joel Greenberg was trafficking a minor for sex.

Information from Greenberg in the lead-up to his plea agreement has already helped investigators further their scrutiny of the congressman. As he worked towards a plea deal with federal prosecutors in recent months, Greenberg told investigators that Gaetz and at least two other men had sexual contact with a 17-year-old girl, CNN has learned. Gaetz has repeatedly denied he ever had sex with a minor or paid for sex.

A newly-reported grand jury subpoena issued in December 2020 requests information related to Gaetz, Greenberg, former Florida state Rep. Halsey Beshears, and former Greenberg employee/shock jock Joe Ellicott. According to Politico:

The Dec. 28, 2020 subpoena states that the grand jury is investigating alleged crimes “involving commercial sex acts with adult and minor women, as well as obstruction of justice” and seeks any communications, documents, recordings and payments the individual had with Ellicott, Gaetz and Greenberg from January 2016 until now. Two sources familiar with the investigation say Ellicott is also being scrutinized for alleged sex trafficking of a minor.

Separately, the Daily Beast obtained private Signal messages between Greenberg and Ellicott in which the pair discussed fears that their group of friends faced criminal exposure for having sex with a minor. The messages were set to disappear after 30 seconds but Greenberg took screenshots.

In their Signal conversation, Greenberg and Ellicott also discussed what an intermediary told them federal investigators had asked the former teenager in an interview, and the subpoena notes that the grand jury is investigating possible obstruction of justice. Additionally, Greenberg and Ellicott went over explanations for payments that had been flagged in that interview, including a $150 Venmo transaction for “Shoes.”