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Ex-Trump Law Firm Ordered to Release Records in N.Y. Probe (2)

Jan. 29, 2021, 10:54 PM

A law firm that recently cut ties with Donald Trump’s real estate company was ordered to hand over records of communications to New York investigators looking into whether the former president’s business manipulated the value of assets for loans and tax breaks.

Morgan, Lewis & Bockius LLP wrongly asserted attorney-client privilege over some documents subpoenaed by New York Attorney General Letitia James and must hand them over by Feb. 4, state Supreme Court Justice Arthur Engoron ruled Friday after privately reviewing the disputed documents.

“The court finds that many of the communications Morgan Lewis marked as privileged were communications addressing business tasks and decisions, not exchanges soliciting or rendering legal advice,” Engoron said in the ruling. “Similarly, any communications within Morgan Lewis speaking to public relations are of a business, not legal, nature.”

Donald Trump holds a news conference with attorney Sheri Dillon in New York on Jan. 11, 2017.
Photographer: Don Emmert/AFP via Getty Images

The ruling is the latest setback for the Trump Organization since James took legal action in August to enforce about half a dozen subpoenas, including one issued to former Trump tax attorney Sheri Dillon of Morgan Lewis. The investigation has emerged as one of the biggest potential threats to Trump after he left office following a failed bid for a second term.

Exodus From Trump

The lawyer representing Morgan Lewis in New York’s legal action, Timothy Stephens, and spokeswoman Emily Carhart didn’t immediately respond to emails and voice mails seeking comment on the ruling. The firm has denied wrongdoing.

Alan Garten, a lawyer for the Trump Organization, didn’t respond right away to a message seeking comment. The company, which has also denied wrongdoing, has called New York’s investigation political.

Morgan Lewis and another firm, Seyfarth Shaw LLP, earlier this month became the most recent in a growing list of law firms to say they’re cutting ties with Trump and his companies. Seyfarth cited the former president’s role in stoking the deadly Jan. 6 riot at the U.S. Capitol, while Morgan Lewis declined to offer a reason.

Read More: Trump’s Tax Lawyers Cut Him Loose as New York Probe Continues

A focus of the New York probe is the appraisal of Seven Springs, a property on 212 acres in Westchester County, outside New York City. James is examining whether Trump’s company gave an accurate valuation for the property when it served as the basis for about $21.1 million in tax deductions for donating a conservation easement for the 2015 tax year. Dillon was “primarily responsible” for handling the easement, according to James.

Morgan Lewis wrongfully applied privilege over thousands of messages, including between Dillon and Trump’s son Eric, while refusing to answer numerous questions “where no privilege could plausibly attach,” according to the state’s initial court filing. Eric Trump, an executive vice president at the Trump Organization and president of Seven Springs LLC, was deposed under oath after losing an effort to delay being questioned.

Read More: Trump Law Firm’s Election Exit Leaves Another Feeling Heat

Dillon also played a role in the appraisal of a Trump golf property in Los Angeles for another conservation easement, New York said. The Trump Organization described Dillon as a “quarterback” in the process, according to the state.

“Morgan Lewis has refused to produce substantive communications about any topic between Sheri Dillon and key employees of the Trump Organization, including Eric Trump,” New York said in its August petition. “All told, Morgan Lewis is withholding or has redacted more than 3,000 documents.”

Read More

  • N.Y. Prosecutors Seek Records on Trump’s Seven Springs Estate
  • Letitia James Talks Investigating Trump, Suing Big Tech and NRA

(Adds New York’s description of Dillon’s role in second section.)

To contact the reporter on this story:
Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story:
David Glovin at dglovin@bloomberg.net

Peter Jeffrey, Steve Stroth

© 2021 Bloomberg L.P. All rights reserved. Used with permission.

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