Unique: New York tax authorities have been summoned for legal investigations towards Trump
(Reuters) – Manhattan prosecutors have summoned a property tax authority in New York City as part of a criminal investigation into Donald Trump’s company, the agency confirmed on Friday. Prosecutors are currently examining the former president’s efforts to reduce his commercial real estate taxes for possible evidence of fraud.
FILE PHOTO: The entrance to Trump Tower is pictured amid the coronavirus disease (COVID-19) pandemic in the Manhattan neighborhood of New York City, New York, the United States, on Jan. 20, 2021. REUTERS / Carlo Allegri
The New York Tax Commission subpoena is the latest indication that Manhattan District Attorney Cy Vance Jr. is investigating the values Trump assigned to some commercial properties in tax returns and loan records.
Along with information already subpoenaed by creditors, the tax authority’s documents would help investigators determine whether Trump’s business has increased the value of his properties to ensure favorable loan terms while lowering those values to reduce tax burdens lower the same real estate.
The President of the New York Tax Commission, Frances Henn, upheld the subpoena in response to a request from Reuters.
The subpoena would likely force the agency to produce detailed statements of income and expenses that the Trump Organization would have filed to lower taxation on some of its commercial properties, according to people familiar with the Commission’s operations. Trump’s holdings include Trump Tower and Trump Plaza.
These filings would typically include reviews submitted by the company to question the market values assigned to Trump’s property by city tax officials, they added.
At least two subpoenas have been issued to creditors who have helped fund Trump’s real estate holdings, Deutsche Bank AG and Ladder Capital Finance LLC, according to Reuters.
Vance’s office declined to comment on the tax commission subpoena. Deutsche Bank also declined to comment. Ladder Capital did not respond to a request for comment. A Trump representative and a Trump organization lawyer also did not respond to requests for comment.
Vance has not specifically commented on the main focus of his investigation, but has found in court records that his office at the Trump Organization is investigating “potentially extensive and lengthy criminal conduct,” including possible record falsification and insurance and tax fraud.
The Vance investigation is the only known criminal investigation into Trump’s real estate business. New York Attorney General Letitia James is conducting a separate civilian investigation into whether Trump’s company has falsely reported property values to secure credit and gain economic and tax benefits.
The Tax Commission is New York’s forum for resolving tax appeals set by the city’s Treasury Department that manages property tax invoices and collections. A New York Mayor’s Office spokeswoman said the department had not been summoned.
The tax assessments are based on the market value of a property as determined by the department. Therefore, challenges require detailed documentation to show that the assigned value is incorrect, including sales and occupancy data.
If Trump’s business claimed much lower property value on its tax returns than it did in documents it presented to creditors, the discrepancy could help support an allegation of fraud, according to Daniel J. Horwitz, a business defender who previously prosecuted tax and eight years of complex fraud in the Manhattan Attorney’s Office.
If there is a “material difference” between property values reported on tax returns and values reported on loan documents, he added, “That’s pretty compelling.”
Adaptation by Cynthia Osterman