It’s basically an accepted truth around here that Trump is fighting to stay in office because of the legal peril he faces once he’s no longer president. But instead of just accepting it, let’s get into specifics. What does he face that truly puts him at risk? Are all these likely financial penalties, or is there something that could realistically send him to prison?
Let’s try to keep hyperbole out of it and avoid discussing everything we think he deserves.
I’ll start with this article from CNN that lists 6 potential lawsuits:
Hush money payment investigation from the Manhattan DA. This could extend into bank fraud, insurance fraud, criminal tax fraud and falsification of business records.
Possible fraud in valuation of efforts, being investigated by New York state attorney general
Various emoluments clause violations being looked at by attorneys general of Maryland and Washington, DC.
E. Jean Carroll’s defamation lawsuit over Trump’s statements about her rape accusation.
Summer Zervos’ defamation lawsuit over his statements about her sexual assault accusation.
Mary Trump’s lawsuit alleging fraud over her share of his father’s estate.
Worth noting (as the article does) that #2 could go in either or both of two different directions: Trump may have inflated the value of assets above actual value in order to secure bank loans (which is bank fraud) and/or deflated them below actual value for tax purposes (tax fraud). I would be amused if he ended up getting dinged for both.
IMO it is unlikely that the feds will bother to prosecute Trump while the states are going after him, but there are also the attempted obstruction of justice instances outlined in the Mueller report and the actual obstruction of justice during his impeachment hearings (blocking subpoenaed documents and witnesses); solid cases could be made for both if the political will existed.
From what the article says, the deflation in value was for property tax purposes. But I don’t know of any assessor of property tax on real property that uses the owner’s own assessment of their property’s value. The closest I’ve encountered is that Michigan levies a personal property tax (tax on property other than real estate used by a business) that’s based on what kind of property it is, when it was bought, and how much it costs, which they rely on the taxpayer to report correctly. None of our clients probably get audited for that, but I imagine it might happen to much larger concerns that own massive factories and such.
For income tax purposes, the valuation of property not being sold is completely irrelevant in general. If it’s being sold, there’s a sales price. If it’s being traded for another property, you’d use a 1031 exchange and not recognize gain on the disposition of the old property. Those are so widespread and bog standard that even the idiots at the Trump organization should know how to do them.
The only time you’d want to understate the value of assets for federal taxes is for things other than income tax, specifically gift and estate tax. I’m sure some shenanigans went on with the death of Trump’s father, but that’s nothing recent. Maybe if they’re shuffling ownership of properties around among the kids, they’re undervaluing them for gift tax purposes? Supposedly that was a big part of the elder Trump’s tax fraud - getting assets into his children’s hands without paying gift tax. There’s an entire industry around doing that legally, though I suppose you can do it faster if you cheat.
I think that this, more than anything, will be Trump’s Waterloo: he will drown in lawsuits.
If I’m Biden, as tempting as it would be, I would probably not want to prosecute Trump unless he did something so outrageous that the public demanded it. Otherwise, you risk making him a martyr. It sucks that the hammer of justice can’t be thrown right at him, but that’s my take.
Now states like NY on the other hand…let them fight that fight on our behalf. He’ll probably be a migratory bird not long after leaving the WH but I’d get satisfaction seeing him chased out of the country.
There’s that perpetual tax audit that’s been going on for years, over the huge tax refund that Trump got that’s suspected of maybe being fraudulent. While I have very mixed feelings about federal prosecution of Trump (I lean toward it), I definitely think Biden should lean on the IRS commissioner to get this wrapped up already. News reports I’ve seen suggest that, with the addition of interest and penalties, Trump could owe $100M over just this. This is not something that Trump could pardon away.
One scenario I kinda, sorta envision (and admittedly there are several ways this could play out) is that everyone takes a moment to welcome the new administration. There’s no desire to just jump in someone who just received 72 million votes for president, regardless of what kind of evidence of scheming and scamming they might have.
During this time, the president has a window to move to one of his properties and let either his children or his close lackeys manage his US assets. He begins hearing rumblings - maybe an insider still in the bureaucracy - tips him off that someone’s doing some serious investigating and he visits one of his properties around the world and settles there indefinitely, maybe even gets permanent residency by promising to bring in jobs and revenue and what not.
Fast forward a few more years when those loans come due. He’s now useless because he has less access to the power structure and he doesn’t have the kind of clout he once did. He has to start selling properties and within a matter of a year or two is worth a fraction of what he used to be. He dies in exile.
This is a horrible idea. Trump will take the pardon and say he had to because they were going to try to railroad him on phony charges and Biden wants to make sure he gets pardoned some day for all the crimes he committed with Obama and stealing the election and the crimes he’s committing as an illegitimate president. And he’ll say they couldn’t ever convict him anyway, that’s why they gave him a pardon so they can say he committed crimes but they know he didn’t and would never be able to bring him to court anyway.
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