ALBANY, N.Y. – New York Attorney General Letitia James has joined forces with Manhattan District Attorney Cyrus Vance, who has been leading a long-running criminal investigation into Donald Trump and his family business interests, dramatically escalating the potential legal jeopardy facing the former president and his associates.
For more than two years, James had been investigating Trump and his company as part of a civil inquiry after former Trump attorney Michael Cohen claimed they fraudulently boosted property values to obtain tax breaks and better terms on loans and insurance.
But James' office announced late Tuesday that the inquiry had shifted to a criminal investigation and that state authorities were now working with Manhattan prosecutors who successfully fought to obtain years of Trump's tax returns.
"We have informed the Trump Organization that our investigation into the organization is no longer purely civil in nature," James spokesman Fabien Levy said in a statement first reported late Tuesday by CNN. "We are now actively investigating the Trump Organization in a criminal capacity, along with the Manhattan (district attorney)."
Levy declined further comment. The Trump Organization could not immediately be reached for comment late Tuesday.
Trump now faces criminal investigations on two major fronts — in New York and in Georgia, where local prosecutors are examining Trump's attempts to interfere in the state election and tilt the vote count in his favor.
Georgia prosecutors have acknowledged they are reviewing a range of possible offenses, including solicitation of election fraud, false statements, conspiracy, oath of office violations, racketeering and violence associated with threats to the election process.
The New York attorney general's action, however, brings additional firepower to bear in a tax and bank fraud inquiry that potentially threatens his business and future political viability.
"What this suggests is that the attorney general has uncovered something to indicate that there is more than just questions about basic accounting principles," said former federal prosecutor David Weinsten. "This is turning up the heat and increased the likelihood that some sort of criminal charges are likely."
New York AG's Trump investigation dates back to 2019
James launched her investigation after Cohen provided documents and testimony to Congress in 2019.
At the time, Cohen — who had a falling out with Trump — claimed Trump regularly inflated the value of his properties and his net worth in order to get better insurance and loan rates.
In August, James' office filed documents in court signaling the investigation had zeroed in on four properties: the Seven Springs estate; 40 Wall Street in Manhattan; the Trump International Hotel and Tower Chicago; and the Trump National Golf Club in Los Angeles.
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Trump purchased the Seven Springs property for $7.5 million in 1995, trying and failing at various points to develop portions of it into luxury housing and a golf course. The property includes two mansions and cuts through the Westchester towns of Bedford, North Castle and New Castle.
In 2015, Trump agreed to conservation easement that saw him pledge not to develop 159 acres of Seven Springs, a decision that came with significant tax benefits.
According to the August court documents, James' office was examining whether Trump and his company fraudulently boosted the assessed value of the sprawling Westchester property, allowing one of his limited liability companies to claim the easement was worth a $21.1 million tax exemption on forms submitted to the IRS.
AG, Trump have clashed before
James' office and the Trump Organization has clashed over the investigation and attempts to wrestle free documents and testimony.
In September, New York Supreme Court Justice Arthur Engoron of Manhattan ordered Eric Trump, the president's son and executive vice president of the Trump Organization, to sit for testimony under oath as part of the investigation.
At the time, the Trump Organization characterized James' investigation as political in nature. James, a Democrat, had previously clashed with Trump, a Republican, over the Trump Foundation, which closed under a settlement with the Attorney General's Office.
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"The Trump Organization has done nothing wrong and, as the motion papers clearly state, the NYAG has made no determination that anything was improper or that any action is forthcoming," the Trump Organization's August statement read.
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