U.S. Markets open in 1 hr 2 mins

Here are all of Trump’s legal problems

Rick Newman
Senior Columnist

Becoming president has a capped a remarkable career for Donald Trump. But it has also triggered legal scrutiny of his business and personal activities that could dog Trump for the rest of his life, and even touch his children.

The latest discoveries come from a thorough New York Times investigation of the many ways Trump’s father, Fred Trump, avoided $500 million in estate taxes and other liabilities while giving more than $1 billion to Donald and his four other children. Trump fashions himself a self-made billionaire, but the Times exposé portrays Trump as a gilded trust-funder repeatedly bailed out of failed business deals by his rich father, who founded the Trump real-estate empire in Queens, New York, in the 1940s.

Perhaps worse for Trump, the Times piece declares in the first paragraph that Trump participated in “outright fraud.” The “most overt fraud,” according to the Times, was a Trump company called All County Building Supply & Maintenance, formed in 1992 as a purchasing agent for equipment needed in the family’s many real-estate holdings. But instead of purchasing equipment, the company funneled undertaxed money from the real-estate business to All County’s owners, including Donald Trump. The Times also alleges that Trump’s father pervasively undervalued his real-estate holdings, to dodge taxes, and used other tax-avoidance strategies that were legally questionable.

President Donald Trump at a campaign rally in Southaven, Miss. on Oct. 2, 2018, (AP Photo/Evan Vucci)

In a statement, a lawyer for President Trump said the allegations in the Times story are “100% false.” The Trump family relied on properly licensed lawyers, accountants and appraisers in its financial dealings, according to the statement, and federal and state tax authorities approved most tax payments. When those authorities asked for adjustments, the Trump family made them.

Still, Trump has denied virtually every legal claim against him, even when he settled lawsuits and paid out money. And the Times story will probably add to a raft of legal problems Trump is likely to face for years. Here are some of the most prominent:

Possible tax-evasion charges. Following publication of the Times exposé, the New York Department of Taxation and Finance said it is reviewing the allegations and “pursuing all avenues of appropriate investigation.” Crain’s New York Business estimates that Trump could be on the hook for as much as $400 million in unpaid taxes, interest and penalties. But that doesn’t mean the state will go after Trump or his company, for tax filings that go back decades, in some instances. At the federal level, by contrast, it’s hard to foresee the IRS, headed by newly confirmed Trump appointee Charles Rettig, pursuing Trump on charges raised in the Times. Prosecutors might be interested in other charges of fraud contained in the article, but for some of those there are statutes of limitation that may have expired.

[See the risks for Trump in Michael Cohen’s guilty plea.]

The Mueller probe, Part 1. Special prosecutor Robert Mueller is investigating whether Trump or anybody involved with his 2016 presidential campaign conspired with Russia during the election, which would be a federal crime. Despite a few suspicious events—most notably, the notorious Trump Tower meeting in June 2016 attended by Trump’s son Donald, Jr. and a Russian lawyer—there’s no public evidence linking Trump with the Russians, so far.

Former FBI Director Robert Mueller, the special counsel probing Russian interference in the 2016 election. (AP Photo/Andrew Harnik)

The Mueller probe, Part 2. Mueller is allowed to investigate any potential crimes he uncovers, and the real risk for Trump may be prior business dealings, especially when Russian money was involved. A lot of Russian money has flowed through Trump’s business over the years, and Trump has tried repeatedly to build one of his signature towers in Moscow. Mueller could discover that Trump has somehow laundered ill-gotten money, from Russia or elsewhere, or benefitted from sweetheart deals that might look compromising now that he’s president.

The Mueller Probe, Part 2.5. Trump’s former lawyer, Michael Cohen, pleaded guilty in August to six charges of tax and bank fraud, along with two campaign-finance violations involving hush-money payments to two women Trump had affairs with. Trump himself is implicated in those two crimes, since it seems evident he authorized the payments and reimbursed Cohen for one of them. The Cohen plea deal wasn’t part of the Mueller probe, but Cohen may be providing information to Mueller that could be valuable, since Cohen worked as a kind of high-level factotum at the Trump Organization starting in 2006.

The MLM suit. On October 29, lawyers filed a suit against Trump claiming he committed fraud by endorsing three companies–the Trump Institute, ACN Opportunity and the Trump Network–without disclosing he was a paid endorser with no ownership or control of any of the companies. The suit plows some old ground and might not survive a court challenge. But Trump settled a trio of similar suits against Trump University for $25 million in early 2018, suggesting he might do so again if the latest case makes its way forward.

The Trump Foundation scandal. The New York state attorney general is suing the Trump Foundation, Trump’s nonprofit, for “persistent violation of state and federal law governing New York State charities.” The suit cites numerous instances of money donated for charitable purposes being spent on political, personal or business activities. Trump’s lawyers say the suit is politically motivated by Democratic foes.

The emoluments lawsuit. Maryland and the District of Colombia are suing President Trump, claiming his ownership of a DC hotel is harming their taxpayers. The suit argues that Trump is violating the emoluments clause of the Constitution by profiting from his position as president, thanks to wealthy patrons staying at his hotel to curry favor. And that, they say, is hurting other hospitality businesses that are losing customers they might otherwise have. This suit hasn’t gotten much attention, but it could lead to a momentous development, because it might force Trump to release his tax returns.

Law enforcement officers stand guard in front of the Trump Hotel in Washington. (AP Photo/Alex Brandon, File)

The Stormy Daniels lawsuits. The porn star has filed two lawsuits against Trump, one for defamation and the other challenging the legality of the 2016 hush-money deal. Trump has already been embarrassed by the Daniels revelations, and the risk from these two suits at this point is far smaller than from those with criminal implications. But Daniels’ lawyer, Michael Avenatti, seems determined to milk the suits for all the publicity he and his client can gain, and the maximum damage they can do to Trump.

The Summer Zervos lawsuit. Zervos is a former contestant on Trump’s reality show, “The Apprentice,” who says Trump groped and kissed her against her will. She filed a defamation suit against Trump last year after Trump said she was lying. Zervos’s lawyer wants Trump to testify under oath, which could subject Trump to perjury charges if he lies. The judge in the case rejected several efforts by Trump’s lawyers to block the request, and the two sides recently agreed to have the president provide written answers to questions, which are due by Oct. 29. Trump has received one extension of that deadline, and may ask for another, since Oct. 29 is just eight days before the midterm elections.

There are other legal cases involving Trump, who has been party to nearly 4,100 lawsuits during the last 30 years, according to a tally by USA Today last year. To him, another lawsuit or two might seem like business as usual. But the legal risks he faces have intensified since becoming president, and could get more severe still.

Editor’s note: This story, originally published on October 3, 2018, has been updated to include a new lawsuit filed against Donald Trump on October 29.

Confidential tip line: rickjnewman@yahoo.comClick here to get Rick’s stories by email

Read more:

Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman