According to people familiar with the matter, the Manhattan district attorney’s office acted quickly to launch its criminal investigation into Donald J. Trump, trying to breathe new life into an investigation that once seemed to be deadlocked.
Under the new district attorney, Alvin L. Bragg, prosecutors have returned to the original focus of the long-running investigation: the hush payment of a porn star who said she had an affair with Mr. Trump.
The district attorney’s office first examined the payment to actress Stormy Daniels years ago, before changing direction to examine Mr Trump’s broader business practices. But the public said Mr Bragg and some of his aides have recently expressed new optimism to his associates, supporters and at least one attorney on the matter about filing a lawsuit against Mr Trump.
The re-examination of the hush money comes amid the whirlpool of legal and political drama centered around Mr. On Friday, US Attorney General Merrick B. Garland appointed a special prosecutor who promised to speedily pursue two federal investigations into the former president. It is unclear whether Mr. Bragg or the special counsel will bring charges against Mr. Trump, who eventually announced a third presidential election.
For Mr Bragg, quiet money developments are showing the first signs of progress since taking office earlier this year when he hesitated to blame Mr Trump in connection with his business practices.
But as Mr. Bragg turns the investigation into a full circle to the silent payoff, he focuses on an aspect of the investigation that hasn’t come to fruition before.
The idea of building a case around the hush money has resurfaced so regularly in recent years that prosecutors have dubbed it the “zombie theory,” one of the people said.
Under Mr Bragg’s predecessor, the district attorney’s office rejected the idea of focusing a case solely on hush money and, with the help of outside legal experts, concluded that the case would be based on a largely untested and therefore risky legal theory. And if Mr. Bragg were to indict Mr. Trump without revealing any new evidence or relying on a more traditional theory, he would risk having a judge or an appeals court dismiss the case.
Prosecutors are reconsidering another strategy that has yet to work to help establish the silent money case: pressured Trump’s top lieutenant Allen H. Weisselberg to cooperate.
Even though Mr. Weisselberg has already admitted to unrelated tax charges and testified in court last week where Mr. The public said that to increase the pressure, prosecutors are considering a new round of charges against Mr Weisselberg in hopes of securing their cooperation against the former president. These potential charges are related to insurance fraud and have nothing to do with hush money.
Understand the Lawsuits Against Allen Weisselberg and the Trump Organization
Who is Allen H. Weisselberg? Mr. Weisselberg was the longtime chief financial officer of the Trump Organization and for decades was one of former President Donald J. Trump’s most trusted executives. He entered Trump’s orbit as junior accountant to Mr. Trump’s father and rose through the ranks in the decades that followed.
What is he accused of? Mr. Weisselberg and the Trump Organization were accused of participating in a 15-year tax evasion scheme that began in 2005 to help executives evade taxes by compensating them with unregistered perks and bonuses. The charges were the result of an ongoing investigation by the Manhattan district attorney into Mr Trump and his company.
Has Mr Trump been charged too? No. While the former president is entangled with the Trump Organization, the indictment, which was unsealed last summer, did not accuse him of wrongdoing. Except for Mr. Weisselberg, no employee was charged.
What are the implications for Mr. Weisselberg? Mr. Weisselberg has agreed to a plea deal with Manhattan prosecutors and is expected to serve a five-month sentence and spend as little as 100 days behind bars. The deal, which requires him to plead guilty to 15 crimes, could put the Trump Organization at a disadvantage in its own trial, which begins Oct. The executive is expected to be the central witness.
What does this mean for the Trump Organization? Mr Weisselberg is not expected to blame Mr Trump or his family when he takes the stand in October. But pleading guilty would undermine the company’s lawyers’ efforts to claim no crime was committed. If Mr Trump’s company is found guilty, it could face high fines or other penalties, as well as negative consequences from its business partners.
Mr. Weisselberg, who had direct knowledge of the hush money payment, has long resisted the prosecution pressure campaign and has repeatedly blocked an investigation into Mr. Trump. There is little indication that the staunch executive who has been the former president’s financial watchdog for decades will suddenly bow to Mr Bragg.
The district attorney may also face some time pressure. Several other investigations of Mr Trump seem to be heating up, including those overseen by the new special counsel.
But Mr. Bragg’s prosecutors are in the middle of the tax evasion trial and have not presented evidence to the grand jury about the hush money; he said with knowledge of the subject.
And so, even if Mr. Bragg could secure a conviction in the tax lawsuit against the former president’s family business, it would be a major turning point for his office. ,The district attorney still faces an intimidating way to indict Mr Trump himself.
Mr. Bragg’s spokesperson and Mr. Weisselberg’s attorney, Nicholas A. Gravante Jr. declined to comment.
Mr Trump denied all wrongdoing and said he had never had an affair with Ms Daniels, whose real name is Stephanie Clifford. “I really don’t believe they’re going back and running these investigations, and if there’s any truth to that, it would be a bad decision,” said Michael van der Veen, attorney for Mr Trump’s company. “Millions of taxpayer dollars spent on numerous investigations is a huge waste of time and money.”
The investigation into Mr Trump touched on his business practices over the past four years, but it all started with $130,000 in hush money.
Michael D. Cohen, who serves as Mr. Trump’s personal lawyer and repairman, paid to buy Ms. Daniels’ silence in the final days of the 2016 campaign. Federal prosecutors pleaded guilty to Mr Cohen, who said he was following Trump’s orders, concluding that the payment was an illegal campaign contribution.
Mr. Trump and his company reimbursed Mr. Cohen $130,000, further raising questions about their involvement in the silent money deal.
Despite coming to federal court, Mr. Cohen’s defense provided the impetus for the district attorney’s office to investigate whether Mr. Specifically, they examined whether the company had incorrectly accounted for refunds to Mr. Cohen as a legal expense, in violation of a New York law prohibiting falsification of business records.
The investigation gained momentum when the district attorney at the time, Cyrus R. Vance Jr., sued Mr. Trump’s accounting firm for tax returns and other financial records. .Vance’s grace. But when Mr. Vance received Mr. Trump’s tax returns in early 2021, he had developed concerns about accusing Mr. Trump of falsifying Trump Organization records regarding the hush money.
Falsifying business records can be charged as a misdemeanor in New York. To make this a felony, prosecutors would need to show that Mr Trump falsified confidential money records to help commit or conceal a second crime.
Mr. Vance’s office examined several secondary crimes that Mr. Trump tried to conceal, said people with knowledge of his arguments, and concluded that the most promising option for an underlying crime was the federal campaign finance breach Mr. Cohen advocated. guilty.
However, with the help of outside legal experts, prosecutors eventually concluded that the approach was too risky—a judge can see that falsification of business records can only be a felony if it aids or conceals a New York state crime, not a federal crime.
Legal experts said it was possible that Mr Bragg violated New York State election law to support a possible lawsuit. Vance’s administration briefly considered violating a state election law, but they rejected it: Since the presidential race for which the silent money was paid was a federal election, they concluded that it was outside the bounds of state law.
It is unclear how Mr. Bragg will address this issue. For Mr. Vance, the difficulty of the silent money case provided a reason to switch gears.
Prosecutors began building a broader case targeting Mr Trump’s net worth, investigating whether Mr. The values appearing in the annual financial statements of Mr. Trump’s company provided to lenders were also at the center of a long-running legal investigation led by New York State attorney general Letitia James.
Before leaving office, Mr. Vance instructed his prosecutors to begin presenting evidence against Mr. Trump to a special grand jury, putting them on the path to impeaching the former president.
But within weeks of taking office in January, Mr. Bragg was annoyed by the office’s ability to show that Mr. Trump intended to break the law, a necessary element in proving the case.
Mr. Bragg finally finished his grand jury presentation, causing two senior prosecutors to resign in February. His decision put the fate of the investigation into doubt and angered many of his liberal supporters.
While prosecutors had long hoped to secure Mr. Weisselberg’s cooperation, he insisted that Mr. Trump had done nothing wrong. And last year, when Mr. Weisselberg initially refused to cooperate, the district attorney’s office charged him and the Trump Organization with tax charges.
The case focuses on the company handing out luxury under the table bonuses to various executives; including Mr. Weisselberg, who bought an apartment without paying any taxes on these bonuses, rented a Mercedes-Benz, and received private school education for his grandchildren. .
Mr Trump has not been personally charged with any wrongdoing in this case.
Mr. Weisselberg’s plea deal on tax charges required him to testify truthfully against Mr. Trump’s company and possibly serve several months at the notorious Rikers Island prison complex.
Any new charges could extend Mr. Weisselberg’s time behind bars and strengthen the hand of prosecutors who pressured him to impeach Mr. Trump.
Prosecutors could threaten Mr. Weisselberg with insurance fraud charges to escalate their pressure campaign, according to people familiar with the matter.
The possible basis for such an accusation first emerged in a January court hearing in the attorney general’s civil investigation, and was further elaborated in a lawsuit filed by his office in September. The lawsuit accused Mr Trump and his company of committing “astonishing” fraud by overvaluing their assets by billions of dollars on their financial statements.
Both documents accused Mr. Weisselberg of lying to an insurer, claiming that the Trump Organization was valuing real estate assets as determined by an independent appraisal, when in fact they were not. According to legal experts, Mr. Weisselberg’s misrepresentations can be used as evidence in an insurance fraud case, as the insurer, Zurich North America, relies on Mr.
According to people familiar with the previously unreported developments, the district attorney’s office summoned Zurich to court and questioned the appraiser, adding that there was no suggestion that neither the insurer nor the appraiser had done anything wrong. A Zurich spokesperson declined to comment.
In recent months, at Mr. Bragg’s direction, prosecutors have also searched New York City for documents filed by the Trump Organization for the Central Park ice rink and the Bronx golf course, the city facilities it operates. knowledge of the subject. They had originally subpoenaed other relevant records this year. While it is unclear why they are searching the records, it is a felony to lie to documents, some of which are filed in Mr. Weisselberg’s name with the city’s contracting agency.
Dana Rubinstein contributed to the reporting.