Trump Tower in New York on March 7, 2021. (Photo: KENA BETANCUR, AFP via Getty Images)
The legal stakes have just skyrocketed for former President Donald Trump and his business.
New York Attorney General Letitia James’s investigation into the Trump Organization has suddenly evolved in two important ways: It is no longer “purely civil” but is also being conducted in “a criminal capacity,” and she is now working along with Manhattan District Attorney Cyrus R. Vance Jr.
Since 2019, James has been conducting a civil investigation into tax matters involving the Trump Organization. James had reportedly served subpoenas relating to Trump’s Seven Springs resort north of Manhattan, an office building in New York, a hotel in Chicago and a golf course near Los Angeles. The AG’s Office questioned Eric Trump, a vice president of the Trump Organization and the former president’s son, in a deposition in October.
Stiffer penalties, more cooperation
Meanwhile, in the Manhattan DA’s Office, Vance has been conducting a criminal investigation into Trump regarding bank and insurance fraud as well as hush money payments made shortly before the 2016 presidential election to conceal allegations of an extra-marital affair. After Trump fought to prevent disclosure of his tax records in response to a grand jury subpoena, Vance won a ruling from the Supreme Court last year requiring their production. His investigation has not yet produced any charges.
Tuesday’s news that the AG is no longer confining its investigation to civil matters is a game changer for Trump and his business. Civil and criminal cases differ in important ways. First, launching a criminal investigation indicates that James has found factual predication of criminal intent. Whereas a civil case in a business matter may penalize mistakes based on negligence, recklessness or sloppiness, a criminal case typically requires proof of a knowing or purposeful intent to defraud.
New York State Attorney General Letitia James on Aug. 6, 2020, in New York. (Photo: Kathy Willens/AP)
Second, the standard of proof in a criminal case is different from the standard in a civil case. The government must prove a civil case by a preponderance of the evidence, or more than 50% certainty. In a criminal case, the government must prove its case beyond a reasonable doubt. Announcing that the investigation is criminal in nature suggests that James’s office believes they evidence sufficient to meet that higher standard.
And finally, the consequences in criminal and civil cases are different. The penalties in a civil case are confined to money damages or injunctive relief, that is, a court order to do or not do something, such as dissolving a corporate entity. A criminal case, on the other hand, can result not only in fines and restitution for the corporate entity, but also prison sentences for individuals involved in wrongdoing.
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In addition to disclosing that the case is now focusing on criminal conduct, the other revelation of the attorney general’s statement is that her office is working with the Manhattan District Attorney’s office. This coordination can be important because it allows the two offices to share information, and also helps them avoid stepping on each other’s toes in ways that could compromise their cases. If, for example, one entity were to compel testimony from a Trump Organization executive in exchange for immunity from using his statements against him, it could prevent the other entity from making use of those statements as well.
Felons can be president
Coordinating grants of immunity can be important to avoid what’s known as the Oliver North problem. North had his criminal convictions relating to his role in the Iran-Contra affair overturned based on use of evidence that was derived from his immunized testimony before Congress. The two investigating authorities here can work together to head off similar pitfalls.
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Among the various investigations and lawsuits against Trump, ranging from defamation to election fraud to his role in inciting the Jan. 6 attack on the Capitol, these business frauds are the ones that should concern Trump the most. That’s because they are what prosecutors refer to as “paper” cases, meaning they are built not on eyewitness testimony but on documents. The objective evidence in the form of documents make for particularly strong cases. Whereas witnesses can sometimes have faulty memories, poor opportunities to observe or biases that can be exposed, documents don’t lie and they don’t forget.
All of this should be concerning news for Trump and his company. But even if Trump is charged and convicted of crimes, all is not lost for him and his political supporters. A criminal conviction would not preclude Trump from running for president in 2024, even if it made campaigning awkward. While felons are disqualified from holding most government jobs, they are not barred from being elected president.
Barbara McQuade, a former U.S. attorney for the Eastern District of Michigan, is a professor at the University of Michigan Law School, an NBC and MSNBC legal analyst, and a member of USA TODAY’s Board of Contributors. Follow her on Twitter: @BarbMcQuade
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