President Trump says he’s disappointed in Attorney General Jeff Sessions for recusing himself from the Russia investigation. ‘He should have told me before taking office and I would have quite simply picked somebody else,’ said Trump. (July 25)
Since Election Day, President Trump’s businesses have sold at least 30 luxury condos and oceanfront lots for about $33 million. That includes millions of dollars in properties to secretive shell companies, which can hide the identities of buyers or partners involved in the deals, a USA TODAY investigation has found.
Now, details of some of those deals and other transactions by Trump’s family business could be unmasked as special counsel Robert Mueller expands his inquiry into election-meddling by Russia and whether Trump’s campaign colluded.
Federal investigators are expected to delve into records revealing some of the President’s most closely guarded secrets, including how much money he makes, who he does business with and how reliant he is on wealthy, politically-connected foreigners.
A half-dozen experts contacted by USA TODAY said they expect Mueller and his team to pursue everything from Trump’s income tax returns to the bank records underlying his companies’ real estate transactions in a quest to identify people who have financial relationships with the President and his business and political associates.
Mueller’s sweeping mandate means his investigators can get, or may already have, The Trump Organization’s phone records, e-mail and contracts, exposing sensitive records and long-secret details to eventual release as part of the public record of the investigation.
Trump’s real-estate business in particular has relied on wealthy Russians and other foreigners, sometimes as buyers of condos in the company’s towers around the world and as investors or partners in the projects. Trump’s son, Donald, said at a 2008 real estate conference, “Russians make up a pretty disproportionate cross-section of a lot of our assets. … We see a lot of money pouring in from Russia.”
Experts say Mueller’s move to follow the money has the potential to expose Trump, his family and his associates to legal troubles that go beyond election-year collusion with the Russians. It opens the door to revelations of any business-related malfeasance discovered during Mueller’s look at Trump’s business network.
The investigation could shine renewed light on eyebrow-raising deals from Trump’s past, such as his 2008 sale of a South Florida mansion to Russian tycoon Dmitry Rybolovlev for $95 million or the international financing behind a condo-hotel he developed with foreign partners in New York’s SoHo neighborhood.
It could also pierce the increasing secrecy around who is buying real estate from Trump. A USA TODAY investigation last month revealed that 70% of Trump real estate sales since he won the GOP nomination were to secretive shell companies, compared to 4% in the two years before that. The clear shift to those kinds of purchases, which help obscure the identities of the buyers, raise questions about the source of profits that ultimately flow to the President because he has not fully divested from his companies.
With increasing intensity and frequency, Trump has been fuming on Twitter and elsewhere as he learns more about the kinds of legal questions and exposure that he and his family could face. In one report last week, aides said Trump was especially disturbed to learn that Mueller is likely able to get several years’ worth of his income tax returns. This week, Trump’s launched daily public attacks against the Attorney General, Justice Department leaders and Mueller’s investigators, saying it’s a “witch hunt.”
Special Counsel Mueller’s office declined to answer questions about the scope of its investigation and what elements of Trump’s businesses might be under scrutiny.
Jack Blum, a Washington attorney specializing in white collar crime and former staff lawyer for two U.S. Senate committees, said efforts by Mueller’s office to investigate all manner of financial transactions is necessary for the special counsel to answer questions of Russian connections to Trump or his associates.
“What you have to do is lay all this stuff out — lay out all the transactions — and then figure out, ‘Why did people do certain things?’” Blum said. “If I see a flow of money to somebody, I want to figure out, ‘Why is that money flowing?’”
Blum said real estate records and corporation records are likely to be of special interest to investigators, and likely would be more revealing than tax returns.
“If you have property and you sell the property and you sell the property, that’s a taxable event,” Blum said. “On the other hand, who lent you money to buy the property, how you got it, who set it up for you — that’s a whole different matter. And that’s not anything that will show up on a tax return.”
“You can’t really tackle the broader problems of corruption or crime without also being able to follow the money and get at the financing of those activities,” said Mark Hays, who investigates international corruption cases with the nonprofit watchdog group Global Witness, based in London and Washington.
It is unclear what the Justice Department would do if it found questionable business practices that are unrelated to Russian election collusion. But the bar to bring charges might be lower. For example, Mueller would not necessarily have to prove that Trump’s companies or associates actively conspired to break laws in some instances, experts said. Trump has said it would be “a violation” for Mueller to venture beyond Russia’s meddling to examine his companies’ or his associates’ business dealings.
John Tobon, a deputy special agent for the Department of Homeland Security in Miami, said luxury real estate sellers who don’t screen their buyers closely enough can be charged in conspiracy cases.
“The law of conspiracy reaches pretty far and every person in the conspiracy doesn’t necessarily have to be clued in to all the details,” said Tobon, speaking about money-laundering in general and not specific transactions involving any specific companies. “So legally you’re exposed in these transactions if you don’t take that extra step of asking who is the person behind 123 LLC.”
Trump’s Atlantic City casino had similar troubles in the 1990s, when the Treasury Department fined the company for not reporting gamblers who cashed out more than $10,000 in a single day. The reporting requirement is designed to prevent money laundering.
Trump’s Atlantic City casino had similar troubles in the 1990s, when the Treasury Department fined the company for not reporting gamblers who cashed out more than $10,000 in a single day. (Photo: Mike Derer, AP file)
The luxury real-estate market where Trump’s companies have done business for decades is particularly ripe, according to law enforcement experts, for foreigners looking to hide assets from tax authorities or launder illicit funds. That includes wealthy Russians and oligarchs from the former Soviet republics.
Real estate professionals in New York and Miami have told USA TODAY that Trump has sold dozens of condos in both cities to wealthy Russians.
The scope of Mueller’s inquiry was established in a one-page order signed May 17 by Acting Attorney General Rod Rosenstein. The order gives Mueller purview to investigate “any links and/or coordination between the Russian Government and individuals associated with the campaign of Donald Trump” but also “any matters that arose or may arise directly from the investigation” and other matters covered by Justice Department regulations.
U.S. anti-laundering laws require financial institutions, title insurance companies and others involved in real estate and other transactions to file reports with the U.S. Treasury Department and other financial regulators that will likely be of interest to investigators, said Hays, of Global Witness.
The records — called “suspicious activity reports” and “currency transaction reports” — can be used to flag suspect financial activity by identifying patterns in withdraws or deposits, and unusual changes in asset ownership over time. The Treasury Department keeps a database of those reports available for federal law enforcement, meaning if any have been submitted related to business deals involving Trump’s companies or his associates, Mueller’s team has access without a warrant or court order.
“You’re looking not only just for data, but for patterns within the data and associations,” Hays said. “So you need to see the whole picture.”
One dramatic question is whether Mueller already has, or will, pursue Trump’s income tax returns — a flashpoint for the President throughout the campaign since he has resisted calls to release them publicly as modern-day presidential candidates have done for about four decades.
Mueller would need to show probable cause to obtain the taxes with a judge’s approval before the IRS would turn them over — but Trump and the public may never know, said Matthew Miller, a former Department of Justice spokesman under the Obama Administration. “The request to a judge is done in secret so the President wouldn’t even know if Mueller had asked for them,” he said.
The same is true for some of the other kinds of internal business records, such as e-mail, Miller said.
They would need to show probable cause that those kinds of business records are essential to determining if there was collusion with the Russians, Miller said. But, he said recent e-mails released by Donald Trump Jr. himself could help provide that probable cause because they show he set up a meeting with a Russian lawyer, himself and two top campaign officials based on the premise that they would be provided damaging information on Hillary Clinton. Trump Jr. said the meeting yielded nothing useful.
As the FBI investigates possible Russian interference in the presidential election, a new report finds Donald Trump Jr. met with a Russian lawyer promising dirt on Hillary Clinton.
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