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Manhattan DA convenes new grand jury in Trump Org. case to weigh potential charges

Trump Tower on 5th Avenue in Manhattan. (Biz Herman for The Washington Post)

NEW YORK — The Manhattan district attorney has convened a second long-term grand jury to hear evidence about the Trump Organization’s financial practices and potentially to vote on criminal charges, according to people with knowledge of the matter.

An earlier grand jury — convened this spring in Manhattan — returned felony indictments against two Trump companies and Trump’s longtime chief financial officer Allen Weisselberg, charging them with tax evasion. It is unclear whether that grand jury is still hearing evidence about the Trump Organization.

The new grand jury is assigned to meet three days a week over six months, people familiar with the matter said. It was expected to hear evidence on Thursday, meeting in Manhattan’s Surrogate’s Court — usually a forum for disputes over the estates of the deceased — because the criminal court buildings are jammed with a rush of post-pandemic trials.

One person familiar with the matter said the second grand jury was expected to examine how former president Donald Trump’s company valued its assets. The people familiar spoke on the condition of anonymity to describe private legal proceedings.

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Another person familiar with the case said staffers for District Attorney Cyrus R. Vance Jr. (D) and New York Attorney General Letitia James (D) were working together closely on this phase of the investigation. Prosecutors recently inquired about the initiation fees Trump golf courses charged new members, the person said, and Trump’s role in setting those fees for individual customers. Trump often cited his clubs’ initiation fees in the statements he sent potential lenders, as a sign of the courses’ financial health.

That appears to be a separate issue from the one described in indictments from the first grand jury, which has dealt with allegations that Weisselberg and other Trump executives evaded taxes on their pay by systematically hiding some of their compensation from the IRS. Both Weisselberg and the two companies have pleaded not guilty.

The second grand jury’s term indicates that it could outlast Vance — who leaves office at year’s end — and extend into the term of his successor, Alvin Bragg (D).

Vance declined to comment Thursday. Bragg previously declined to talk about the Trump case while campaigning.

The seating of the new grand jury does not signal that any other Trump entities or executives will be charged. The second grand jury could end its term without indicting anyone.

The former president has not been charged with any crime. On Thursday, neither Trump’s company or his post-presidential office responded to requests for comment. Ron Fischetti and Phyllis Malgieri, two of Trump’s personal lawyers, declined to comment.

In the past, Trump and his family have criticized Vance’s investigation — and a separate civil inquiry into his business by James — as motivated by politics and not the law.

“This type of targeting and harassment violates every ethical guideline of a prosecutor. It’s wrong,” Eric Trump, the president’s son, told The Washington Post last year.

Both Vance and James have previously said that they were examining allegations that the Trump Organization misled banks, insurance firms or tax authorities by manipulating the value of its assets to get favorable loan rates or to lower his taxes.

James said in a court filing last year that her office was investigating Trump’s valuations of three properties: his Los Angeles golf course, a Manhattan office building and an estate in suburban New York called Seven Springs.

James’s filing said she was interested in a “conservation easement” that Trump obtained on the Seven Springs property in 2015 — giving him tax benefits in exchange for renouncing his right to build houses on part of the estate. Trump boosted the value of that tax break by estimating that the land would have brought him $21 million if he’d sold it.

James also indicated in the filing that she was interested in valuations of Trump’s golf course in Los Angeles, where in 2014 Trump obtained a conservation easement that he said lowered the property value by $25 million, the filing said. James did not say why she was interested in Trump’s office building at 40 Wall St. in Manhattan.

Vance’s office, which is convening the new grand jury, has given far less detail about its investigation of valuations at Trump properties.

Vance’s investigation is aimed at criminal charges, while James’s civil probe could end in a lawsuit. But James’s office has also played a role in Vance’s criminal investigation, sharing information and attorneys. James recently announced that she is running for governor of New York in 2022.

The question of whether Trump manipulated the valuations of his properties was raised in 2019 by Michael Cohen, a longtime lawyer for Trump, in his testimony to Congress.

“It was my experience that Mr. Trump inflated his total assets when it served his purposes, such as trying to be listed amongst the wealthiest people in Forbes, and deflated his assets to reduce his real estate taxes,” Cohen said then. Cohen’s insider accounts helped spark both James’s and Vance’s investigations, according to court filings.

Cohen cited documents called “Statements of Financial Condition,” which were prepared by Trump’s accounting firm. These were write-ups of Trump’s assets and debts, which Cohen said were intended to prove his wealth — and his good standing as a potential borrower.

In some cases, The Post found, these statements seemed to contain incorrect figures about Trump’s properties.

For instance, Trump claimed his Virginia vineyard had 2,000 acres, when it really had about 1,200. He said Trump Tower has 68 stories. It has 58.

In some cases, The Post found Trump seemed to add millions of dollars in value to some properties by claiming credit for homes he did not have permission to build.

In 2011, for instance, Trump’s statement said he had 55 home lots to sell at the Los Angeles golf course. Those lots would sell for $3 million or more, the statement said.

But at that point, Trump had only 31 lots zoned and ready for sale at the course, according to city records. He appeared to claim credit for 24 lots — and at least $72 million in future revenue — he didn’t have.

Trump also claimed that the Seven Springs was zoned for nine — or, in a later document, even 25 — “luxurious homes.” The statements of financial condition said Trump included the sale price of those homes in his valuation of this property, concluding in 2011 that it was worth $261 million.

But, despite years of trying, Trump never completed the process required to build any homes on the property, according to local officials. Local assessors had valued the same property at $20 million.

O’Connell and Fahrenthold reported from Washington.