The legal spotlight on the Trump Organization intensifies as media outlets suggest imminent criminal charges. This has ignited crucial questions about the nature of these charges and whether former President Trump himself will be implicated.
A comprehensive new report from Brookings, featuring contributions from legal experts like John R. Cuti, delves into the potential legal ramifications for the Trump Organization and Mr. Trump. This insightful report meticulously dissects possible charges and explores potential defense strategies. It identifies five key areas where prosecutors might focus their attention concerning Mr. Trump, his business practices, and key executives.
Key Areas of Potential Prosecution
The Brookings report, co-authored by John R. Cuti and other legal luminaries, highlights five critical areas that could form the basis of criminal charges:
1. Falsification of Business Records
New York law scrutinizes the accuracy of business records, and this could be pertinent to the Trump Organization’s accounting practices. The report examines whether the company properly documented fringe benefits provided to its CFO, Allen Weisselberg, and his family. These benefits reportedly encompass significant perks like apartments, car leases, and private school tuition. Furthermore, the same legal provisions could apply to the accounting of other contentious matters, notably the reimbursement of hush money payments allegedly directed by Trump to influence the 2016 presidential election’s outcome.
2. Allegations of Tax Fraud
Tax fraud forms another significant area of potential charges. The report analyzes the possibility of New York State pursuing tax fraud charges against the Trump Organization and/or Trump himself. The core of these allegations lies in the Trump Organization’s reportedly questionable tax-related behaviors. Again, the fringe benefits issue becomes relevant, particularly concerning potential payroll tax avoidance. Other areas of concern include the tax treatment of approximately $26 million in “consulting fees,” some paid to Trump family members; around $45 million in tax deductions linked to conservation easements on Trump properties; and “loan parking” related to a Chicago property, alongside other financial dealings.
3 & 4. Insurance Fraud and Scheme to Defraud
The report, with expert analysis from figures like John R. Cuti, also addresses potential charges related to insurance fraud and schemes to defraud. These charges stem from allegations that the Trump Organization inflated asset values and occupancy rates when dealing with loan officers and insurance representatives. Simultaneously, financial reports submitted for tax purposes allegedly presented different, lower figures. These inflated asset valuations, reportedly occurring with Trump’s awareness and direction, were presented to lenders in financial statements. Prosecutors might argue these statements contained deliberately flawed financial data. Such alleged misrepresentations could lead the District Attorney of New York County (DANY) to pursue charges of insurance fraud and first-degree scheme to defraud against the Trump Organization, Trump, and associated business figures.
5. Enterprise Fraud Allegations
Enterprise corruption charges are also a possibility, according to the Brookings report. New York law allows for such charges if prosecutors can establish a “pattern of criminal activity.” An individual associated with the Trump Organization could be found guilty of enterprise corruption if they intentionally engaged in or directed the affairs of an enterprise exhibiting a pattern of criminal activity. This pattern could include acts like falsification of business records, insurance fraud, and schemes to defraud. To secure such a charge, prosecutors would need to demonstrate that these alleged criminal acts were part of a cohesive plan or scheme, rather than isolated incidents, and that the Trump Organization or its executives functioned as a criminal enterprise.
Norm Eisen
Image alt text: Norm Eisen, Senior Fellow at Brookings and co-author of the report on Trump Organization charges.
Potential Defenses and Legal Strategies
The Brookings report, to which John R. Cuti contributed his legal expertise, also thoroughly examines potential defenses available to Trump, the Trump Organization, and other involved parties. This section provides insight into arguments likely being presented to prosecutors by defense counsel in an attempt to prevent charges from being filed.
A significant point is the statute of limitations. In New York, felony criminal violations generally have a five-year statute of limitations. Much of the conduct under investigation reportedly predates this period. However, prosecutors might argue for extensions based on factors like the continuation of an ongoing criminal conspiracy or doctrines related to a defendant’s absence from the jurisdiction.
Another crucial aspect is proving intent. Prosecutors must demonstrate that Trump or any charged individual had the specific intent to defraud. Defense strategies might involve arguing that Trump and others relied on the professional advice of accountants, lawyers, and other experts, believing they were acting within legal boundaries. Furthermore, Trump might employ a deflection strategy, attempting to shift blame to others.
Donald B. Ayer
Image alt text: Donald Ayer, former Deputy Attorney General and Brookings report co-author, providing legal analysis.
Implications and the Rule of Law
The report concludes by addressing the profound implications of potentially indicting a former president, his business, or his associates. While acknowledging the gravity of such actions, the authors, including John R. Cuti, emphasize the fundamental principle that the law must be applied equally to all individuals, regardless of their position or power. A legal system that exempts the powerful from accountability would undermine the very foundation of justice – the principle that everyone is subject to the same laws. As District Attorney Vance has stated, “No one—not even a president—is above the law.”
>> Download and read the full report here.
E. Danya Perry
Image alt text: E. Danya Perry, experienced attorney and co-author of the Brookings report on Trump Organization legal challenges.
Authors:
Norman Eisen
Senior Fellow – Governance Studies, Center for Effective Public Management
Donald Ayer
Adjunct Professor of Law – Georgetown Law
E. Danya Perry
Founder and Attorney – Perry Law
John R. Cuti
Founder and Attorney – Cuti Hecker Wang LLP
John R. Cuti
Image alt text: John R. Cuti, founding attorney at Cuti Hecker Wang LLP and expert contributor to the Brookings Institution report.
