New York’s Trump inquiry expands to include Chicago building
By Kara Scannell | CNN
The Manhattan District Attorney’s Office cited documents from an investment firm that loaned the Trump Organization millions of dollars for its Chicago skyscraper, a sign that the investigation into the finances of the The former president continues to expand, according to people familiar with the investigation.
Prosecutors issued a grand jury subpoena to Fortress Investment Management late last year, the people said, as part of their broad investigation into former President Donald Trump and his company.
Investigators’ interest in how Trump and his company handled the Chicago loan is an extension of an investigation that encompasses multiple aspects of the Trump business.
Prosecutors are examining whether the company has misled lenders or insurance brokers about the valuations of certain properties. They are also investigating fees paid to consultants and a conservation easement taken on a family estate in New York City called Seven Springs.
Their stake in Fortress relates to a $ 130 million loan the company gave to the Trump Organization to build a luxury hotel and condo tower in Chicago.
In 2012, Fortress then gave up more than $ 100 million of the loan, which, including interest and fees, was worth around $ 150 million, according to court documents. The rebate was made to secure a partial repayment of around $ 45 million at a time when the real estate market was suffering from the financial crisis.
Attorneys at Manhattan District Attorney’s Office Cy Vance are investigating whether Trump and the Trump Organization recorded the loan cancellation as income, as required by the Internal Revenue Service, and paid the appropriate taxes , people say.
Fortress has not been charged with any wrongdoing. Representatives for Fortress and the Manhattan District Attorney’s Office declined to comment.
The Trump Organization did not respond to a request for comment.
Alan Garten, general counsel for the Trump Organization, declined to comment. He previously told the New York Times in October that the company and Trump correctly accounted for and paid all taxes on the canceled debts.
New York Attorney General Letitia James first raised questions about Trump’s handling of the Fortress loan last fall when her office revealed in a court file that it was investigating whether Trump and the Trump Organization had recorded the canceled amount as income and paid taxes or if there was an explanation as to why it would not be necessary.
The attorney general’s office said at the time that information about the transactions was “important” to its civil investigation.
The New York Times, which obtained the taxes from Trump, said canceled debts show up on Trump’s tax returns as canceled debts. The Times wrote that Trump took advantage of a law enacted after the 2008 financial crisis that allowed companies to spread income from canceled debts over several years.
Attorney’s interest in Trump’s handling of Fortress loan cancellation comes as the district attorney’s office began digging through Trump’s tax returns and other documents it received from Mazars , Trump’s longtime accountant.
In addition to tax returns, investigators obtained financial statements and working papers that may shed light on the decision-making process behind handling the canceled debt. It could also reveal any internal debate and discussion that could help prosecutors determine the intent behind the conclusions they reached.