The Trump Family and the Art of the Steal
On This Day In 2017
A shady real estate deal lands the Trump Family in crosshairs of Major Economic Crimes division. Today’s OTDI is a bit complicated. But that’s because Don Jr. and Ivanka spun a complex tale of deception and lies to their unwitting victims. And, it seems they were awfully close to a felony conviction, before getting sprung at the last minute. So this one takes a bit to unravel.
Flashback to 2006 Donald was riding high as the host of The Apprentice, a show which, as discussed in an earlier OTDI, was often manipulated to make Donald appear competent rather than deranged.
On Season 5, Donald heralded the imminent development of “Trump SoHo,” a luxurious 46-story condominium-hotel in the trendy SoHo district of Lower Manhattan. In typical Trumpian style, he declared “this brilliant $370 million work of art will be an awe-inspiring masterpiece.” In the end, the most “awe-inspiring” part of it was the trail of legally and ethically questionable actions taken by the Trump Family and associates.
Once it was underway, it turned out not so many people wanted to own their little piece of Trumpworld after all.
So, the Trump Family pulled out all the stops to make it seem that their project had momentum and that condo buyers should quickly scramble aboard. In June 2008, Ivanka, flanked by brothers Don Jr. and Eric, boasted to a group of journalists that “We’re in a very fortunate position where we have enough sales and now we are strategically targeting certain buyers.” 60% of the units had already been sold! Separately, Don Jr. had bragged they’d sold 55% of the condos. It all sounded rosy! But, behind the scenes, there were actually many sets of problems.
One lawsuit against The Trump Organization “claimed that Trump SoHo was developed with the undisclosed involvement of convicted felons and financing from questionable sources in Russia and Kazakhstan,” noted the NYT. Even back the observed that some of those investors/intermediaries were alleged to be “in favor” with Vladimir Putin.
Trump had apparently gotten into bed with these investors in expectation that they would also help him fulfill his years-long dream: “This was going to (lead to) Trump International Hotel and Tower Moscow, Kiev, Istanbul, etc., Poland, Warsaw,” Trump enthused.
Separately – and this is where it also gets interesting -- the Trump Organization was sued by condo buyers. They argued that the Trump Family had lied about how many units had actually been sold and at what prices. Turns out “according to a sworn affidavit by a Trump partner filed with the New York Attorney General’s office, by March of 2010, almost two years after the press conference, only 15.8% of units had been sold." The supercomputer we have here at OTDI HQ reveals that 15.8% is < the 60% claimed. Hmmm… The common word for that mathematical equation is “fraud.”
This, of course, was hardly the only time Trump’s business was accused of reporting misleading valuations. Unlike in other cases, though, in which the Family business was found by a judge to have lied about their operations, in this Trump SoHo case the Trump Organization settled the suit before too much could become public.
But, OTDI 2017, an expose in ProPublica revealed that the two Trump siblings had only narrowly escaped felony charges in that case. The way they seemingly were sprung out of it was quite a tale in its own right.
The Major Economic Crimes division of then-Manhattan District Attorney Cy Vance opened their own criminal investigation into Donald Jr and Ivanka, based on the inflated-numbers civil lawsuit.
The paper trail against the pair was apparently quite damning. Persons with deep inside knowledge confirmed an email between the two elder scions discussed how to swindle the unwitting customers into buying Trump Soho condos.
Another email, sent by Don Jr., assured a nervous partner that nobody would ever find out about their inflated-numbers scam. Why not? Because only Trump insiders had access to these high-level communications in which they had developed and coordinated their deceptive sales techniques.
“There was ‘no doubt’ that the Trump children ‘approved, knew of, agreed to, and intentionally inflated the numbers to make more sales,’ one person who saw the emails told (Pro Publica). ‘They knew it was wrong.’”
Despite their cover stories, it was clear that legal walls were closing in. Career prosecutors had spent two years digging down to the core of the plan and were finally getting close to the grand jury stage.
Suddenly, in parachutes Marc Kasowitz, a loyal Trump attorney, to save the day. He booked a private meeting with the DA himself, Cy Vance, for May 16, 2012.
Note: This is the same Marc Kasowitz who had made a $25,000 donation to Cy Vance’s reelection campaign, making him one of Vance’s largest donors.
Then, despite protests from the actual career investigators, Vance went ahead and dropped all charges against the Trump children. Vance insisted there was no quid pro quo. However, “you couldn’t have had a better e-mail trail,” showing the intents and actions of the Trump Family, noted an insider.
According to a colleague, Kasowitz himself bragged it was “amazing I got them off.” (Kasowitz denied making such a statement.)
The Postscripts: Where are they now?
Before taking that Kasowitz meeting, Vance returned that $25K donation, as was standard operating procedure when somebody involved in a case like that had made a campaign contribution. But as ProPublica noted, “less than six months after the D.A.’s office dropped the case, Kasowitz made an even larger donation to Vance’s campaign, and helped raise more from others.”
Cy Vance won his reelection campaign.
Marc Kasowitz rose higher in the Trump Family sphere of influence, to the point where he became Donald’s lawyer in Mueller’s Russia investigation. However, he was dogged by questions regarding conflicts of interest due to his involvement in a real estate deal involving scandal-riven Deutsche Bank which netted Kushner nearly $300MM, and also due to his role in representing Russia’s largest bank.
As for the building itself, ProPublica summarized: “The Trump SoHo went into foreclosure… and was taken over by a creditor. Only 128 of the 391 units in the building have sold. That comes out to around 33 percent.” The building is now called “The Dominick,” if you find yourself in the neighborhood.
And wait, one more quickie: The Trump Family has been to known to lie about even the most basic facts about a building, such as how many stories high it is. This time, the “Trump SoHo” building? Turns out it’s not even actually…in SoHo.
Dive Deeper
Here's ProPublica’s detailed investigative reporting, a group effort with The New Yorker and WNYC
The Wrap summarized some of the twists and turns
The NYT also has a multi-year summary of the settlement
Above The Law summarizes how the Trump Family got out of it
The Guardian wrote about Kasowitz, Jared, and the Mueller investigation
Great read today
Did not recall this one. Column should read “A Crime a Day.”