The district attorney’s office, headed by Cyrus Vance, is expected to have access to the files in the coming days, according to people familiar with the matter.
Vance’s office and Trump’s longtime accounting firm Mazars USA, which has been subpoenaed, have been in discussions for months over how documents, mostly in electronic form, would be delivered securely, said These persons.
Once prosecutors have the tax records in hand, they will be able to delve into investigative theories, conduct interviews with key witnesses, and determine whether they believe state laws have been violated.
In addition to tax returns dating back to 2011, Vance assigned four other categories of documents, including financial statements, engagement contracts, documents relating to the preparation and review of tax returns, as well as working papers and communications related to tax returns.
Records can be essential to the investigation as they are likely to contain documents reflecting the decision-making behind assessments and tax write-offs, which can be important in determining whether there was intent to commit a crime.
Prosecutors wanted to review the documents before calling key witnesses to the grand jury, people familiar with the investigation said. Under New York law, witnesses are granted “transactional immunity” and cannot be prosecuted for any crime related to their testimony as a grand jury witness. Once prosecutors have these documents, they can start taking these steps.
Still, it will take time for investigators to review the files and put them together with other documents and testimony. The Trump organization is made up of dozens of limited liability companies, each with their own financial statements and tax returns.
Mazars said in a statement that it “remains committed to fulfilling all of our professional and legal obligations”.
Trump, in a statement, said: “For over two years, New York City has looked at almost every transaction I have ever made, including looking for tax returns that have been done by one of the largest and most prestigious law and accountancy firms in the United States “He called the investigation a” fishing expedition. ”
The clock is turning
The ruling that rejected Trump’s latest attempt to block the subpoena removes a major obstacle to the criminal investigation, which has been ongoing for more than two years.
The investigation has recently gained momentum with the addition of a new prosecutor experienced in financial investigations and continuing to interview witnesses.
District Attorney’s Office is investigating whether Trump and the Trump organization have engaged in tax evasion, insurance fraud and other fraud schemes, including potentially providing false information to financial institutions or to banks on the value of certain buildings and assets.
Prosecutors said Trump’s financial records were critical to their investigation, citing the statute of limitations. Investigators work with a five-year statute of limitations for most New York State crimes that cover the areas under review.
Prosecutors also subpoenaed Ladder Capital, which has loaned more than $ 100 million to the Trump organization.
In addition, investigators have subpoenaed the Trump organization to obtain documents relating to fees paid to consultants, including Ivanka Trump, the people said.
Tax and fraud cases are difficult
Former prosecutors say it’s difficult to bring a tax or financial fraud case, especially since Trump has relied on lawyers and accountants for advice. Added to this is the complexity of real estate, where there is more leeway to calculate valuations.
In some cases, they say, certain tax write-offs or assessments may at first glance seem suspicious, but could prove to be appropriate under the law.
Sophisticated lenders also conduct their own internal reviews before stretching out millions of dollars, say former prosecutors, noting cases where the lender has not suffered a loss are difficult to prove.
Trump is likely to argue that there were different legal reasons for valuing a real estate asset one way when looking for a loan to reflect its potential growth, but would have a legal basis for valuing it differently in a statement from income reflecting its current value.
Another open question is whether prosecutors will complete their investigation under Vance’s leadership.
Vance’s term runs until the end of the year and he is not expected to stand for re-election, according to a person familiar with the matter. Several Democratic candidates, including former prosecutors, have already declared their intention to run for prosecutor.