A New York judge ruled Thursday that Donald Trump, Donald Trump, Jr. and Ivanka Trump are to answer under oath questions about the Trump Organization’s finances and accounting practices. The decision was a victory for New York Attorney General Letitia James, whose office issued subpoenas to the three trumps in December and January as part of its civil investigation into the former president’s finances. Judge Arthur Engoron rejected arguments made by the Trumps’ attorneys at a hearing Thursday to block depositions and ordered the former president and his two children to submit to questioning within 21 days.

The court’s decision came about a week after Trump’s longtime accounting firm, Mazars USALLP, sent a letter to the Trump Organization, saying nearly a decade of financial statements she prepared for Trump “should not be relied upon.” Naturally, there is now much speculation about the direction Trump’s corporate investigations are headed. In addition to James’ civil investigation, his office is working on a criminal investigation with Manhattan District Attorney Alvin Bragg, which resulted in an indictment of Trump Organization CFO Allen Weisselberg for fraud. tax last summer.

From 2011 to 2020, Mazars prepared Trump’s tax returns and provided an annual “Donald J. Trump’s Statement of Financial Position”, which lists each of the Trump Organization’s assets and estimates their value. In 2019, Michael Cohen, the former Trump repairman — who had been convicted the previous year of charges including tax evasion and campaign finance violations — testified before Congress. During his appearance, he released a partial copy of a June 2011 statement from Mazars that estimated the value of Trump’s assets at nearly $4.6 billion and his net worth at nearly $4.3 billion. , much more than outside estimates at the time. In his recent letter, Mazar said he decided to disavow the statements from 2011 to 2020 “based, in part, on documents filed by the New York Attorney General . . . our own investigation and information received from internal and external sources.

Recent court documents and news reports indicate that the two sets of prosecutors are now investigating whether Trump and his associates defrauded lenders and insurance companies by overstating the value of Trump’s properties on loan applications and other legal documents. Last month, James’ office said in a court filing that it was investigating whether Trump and the Trump Organization “misrepresented the value of Mr. Trump’s assets on annual financial statements, filings tax and other documents and had made other material misrepresentations provided to third parties in order to obtain loans and insurance coverage and to obtain other economic and tax benefits. He also stated that the Attorney General’s office “intends to make a final decision on who is responsible for these inaccuracies and omissions.”

Unless they appeal Thursday’s decision, the three Trumps are likely to answer detailed questions from James investigators regarding their knowledge of various financial documents his office focused on and the role they played. could play in their preparation. Of the transactions mentioned in last month’s filing, three involved a total of $300 million in loans that Deutsche Bank made to Trump affiliates. They included one who developed the Trump International Hotel, in Washington, DC, and another who developed the Trump National Doral Golf Resort, in Miami. In “evaluating whether to extend or maintain credit, Deutsche Bank accepted Mr. Trump’s personal guarantee and Mr. Trump’s Financial Disclosure Statements, and the assessments listed therein were incorporated into bank memoranda.” internal,” the filing reads.

While James’ office has argued with Trump’s attorneys in court, Bragg’s office has been less forthcoming about the progress of its investigation. But the Timeswho closely follows the evolution of the situation, reported that criminal prosecutors also “focused on financial documents that [Trump] used to obtain loans and boast of his wealth,” and “examined one of Mr. Trump’s accountants before a grand jury as part of their review of the financial statements.”

To what extent does Mazars’ volte-face help the government’s case? “In part as a result of our decision on the financial statements, as well as the totality of the circumstances, we have also reached the point where there is an irrevocable conflict of interest with the Trump Organization,” the firm said. accountant in his letter. “As a result, we are unable to provide any new work product to the Trump Organization.” The term “non-redeemable conflict of interest” suggests that Mazars is now focused on his own skin rather than Trump’s. If prosecutors filed charges and went to court, they would almost certainly call some Mazars employees as witnesses. And these witnesses would surely point out that, in preparing the statements, they relied on financial information provided by the Trump Organizations in the form of a spreadsheet.

That detail is contained in last month’s court filing by James’ office, which also showed how some of Trump’s claims were exaggerated. For most of the period covered by the financial statements, Trump’s primary residence was his penthouse at Trump Tower. “Data supporting Mr. Trump’s financial statements for 2015 listed the value of Mr. Trump’s triplex apartment at $327 million, based on the apartment having 30,000 square feet of space. multiplied by a certain price per square foot,” the filing reads. In fact, Trump’s apartment is 10,996 square feet. Another Trump building is 40 Wall Street. In 2011 or 2012, Allen Weisselberg ordered an appraisal of the property, which assessed its value at around two hundred million dollars. “During the same period,” the filing states, “Mr. Trump presented a value for 40 Wall Street in his financial disclosure statements of $601.8 million in 2010, $524.7 million in 2011 , $527.2 million in 2012 and $530.7 million in 2013.”

No surprise there. But did all of this amount to criminal behavior that can be proven beyond a reasonable doubt in court? In a lengthy report on the Trump case that the Brookings Institution released last year, four senior attorneys, including Norman Eisen, a top Trump critic who worked in the Obama administration, said prosecutors could possibly accuse Trump of falsifying business documents, tax evasion, insurance fraud, scheme to defraud or being part of a corrupt company. However, the report also outlined possible defenses Trump could make: he could claim he was not responsible for a particular financial statement or loan request, or that he had no criminal intent. to defraud anyone. He could also argue that the inflated valuations of the assets were not “material”, meaning that they did not materially influence the decision-making of a counterparty, such as a bank or an investment company. ‘assurance.

In his letter to the Trump Organization last week, Mazars said that while his statements about Trump’s financial condition could no longer be relied upon, “we have not concluded that the various financial statements, as a whole, contain significant deviations”. The Trump Organization, in its public response to the letter, seized on this language and asserted that it “effectively renders the DA and AG’s investigations moot.” Trump himself issued a lengthy statement describing the New York investigations as political blockbuster jobs, and saying that “Mazars’ decision to step down was clearly the result of the AG and DA’s vicious bullying tactics. “.