How Ivanka and Donald Trump Jr. Beat Condo Fraud Rap

After Donald Trump’s long-time lawyer intervened, Manhattan District Attorney Cyrus Vance Jr. dropped a criminal fraud investigation against Ivanka and Donald Trump Jr., who were suspected of misleading investors in the troubled 391-unit Trump SoHo condominium-hotel, a new joint investigation by ProPublica, The New Yorker, and WNYC has revealed. 

Trump’s attorney, Marc Kasowitz, met with Vance in March of 2012, urging him to drop a mushrooming investigation into Ivanka and Donald Trump Jr.’s possibly criminal inflating of sales figures at Trump SoHo, where units were selling poorly. Three months after that meeting, Vance overruled his own prosecutors and ordered them to drop the case. 

Vance defended his decision: “I did not at the time believe beyond a reasonable doubt that a crime had been committed. I had to make a call and I made the call, and I think I made the right call.” 

Just before the 2012 meeting, Vance had returned Kasowitz’s $25,000 contribution to the D.A.’s re-election campaign, saying Kasowitz “had no influence and his contributions had no influence whatsoever on my decision-making in the case.” But 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 – eventually, a total of more than $50,000. After being asked about these donations more than four years after the fact, Vance said he now plans to give back Kasowitz’s second contribution, too. “I don’t want the money to be a millstone around anybody’s neck, including the office’s,” he said. 

The evidence against the Trump siblings, according to the report, included emails making clear that they were aware they were using inflated figures about how well the condos were selling in order to lure buyers. In one email, according to four people who have seen it, the Trumps discussed how to coordinate false information they had given to prospective buyers. Ivanka Trump claimed 60 percent of units had sold, when in fact 15 percent had sold. In another email, they worried that a reporter might be onto them. In yet another, Donald, Jr. spoke reassuringly to a broker who was concerned about the false statements, saying that nobody would ever find out, because only people on the email chain or in the Trump Organization knew about the deception. 

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 reporters. “They knew it was wrong.” 

In August 2010, some disgruntled buyers sued the Trump Organization in federal court, accusing the Trumps of “a consistent and concerted pattern of outright lies.”

Eventually the Trumps and their partners settled with the buyers, agreeing to return 90 percent of their deposits, plus their attorneys’ fees. In return, the plaintiffs agreed not to cooperate with prosecutors unless they were subpoenaed. Adam Leitman Bailey, the attorney for the buyers, had been helping prosecutors. Now he wrote a letter to the district attorney on behalf of the Trumps, stating: “We acknowledge that the Defendants have not violated the criminal laws of the State of New York or the United States.” 

Ivanka Trump is now an adviser to the President, with an office in the West Wing. Donald, Jr., is running much of the family empire. The 46-story Trump SoHo, which the American Institute of Architects called “a banal glass box,” went into foreclosure in 2014 and was taken over by a creditor. Only 128 of the 391 units – about one-third – have sold.