Back in 2012, Ivanka and Donald Trump Jr., came close to being criminally charged with fraud for misleading prospective buyers about units in the Trump SoHo development, a new investigation by The New Yorker, ProPublica, and WNYC alleges.
Concerns about Donald Trump's real estate businesses and financial dealings have been circulating since long before Trump was inaugurated as president. And since he arrived in the White House, the family's apparent lack of concern for government ethics and the murkiness surrounding multiple potential conflicts of interest have raised even more questions. And those issues — along with other apparent missteps — just keep coming (Two recent examples: Ivanka and her husband Jared Kushner made headlines this week for using a private email address for government work and for failing to submit on time the financial reports required by the Office of Government Ethics).
Now, this new report that the president's two eldest children came close to being indicted offers a small window into how the family conducted their businesses before Trump's presidency. According to the reporting, the investigation was eventually dropped after the intervention of one of Trump's lawyers.
In 2010, the Major Economic Crimes Bureau of the Manhattan District Attorney’s office began investigating Ivanka and Donald Jr. At the time, the siblings were being sued by prospective buyers of the Trump SoHo, a luxury hotel-condominium development in Lower Manhattan. Buyers argued the Trumps had misled them, saying more-than-half of the units in the hotel-condo have been purchased when the number was closer to 15%. (The lawsuit was settled in 2011, The New York Times reported last year.) Sources told The New Yorker, ProPublica, and WYNC that there are emails showing the Trump siblings knew they were misleading prospective buyers and coordinated what false information to give them.
Trump SoHo was originally announced in 2006, when Ivanka was 24 and Donald Jr. was 28. The project was a way to introduce his eldest children as players the family business, but due to various factors — zoning laws, the start of the financial crisis — the project stalled. In the two years after the announcement, the siblings boasted about how many Trump SoHo units had been sold: First they said it was 31%, then it was 55%, and finally that the number of purchases had hit 60%. But according to a 2010 affidavit, none of that was true— Trump SoHo had barely sold 15.8% of its units.
Buyers felt cheated and sued, and New York prosecutors began their investigation. But in 2011, the Trumps settled with the disgruntled buyers. They ended up returning 90% of the buyers' deposits and legal fees. In exchange, the Trump family scored a small win: Plaintiffs agreed they would not cooperate with prosecutors unless they were subpoenaed. The investigation kept heating up — at least, until Manhattan District Attorney Cyrus Vance Jr. met with Marc Kasowitz, one of President Trump's most loyal attorneys and one of Vance’s largest campaign contributors (both before and after the case was closed).
According to the report, sources say the meeting took place in May of 2012 and Kasowiz told Vance what the Trumps' defense lawyers had been arguing for a while: That even though the statements were exaggerated, they were harmless and didn't constitute a crime. The DA dropped the investigation in August, saying the civil case was settled and the buyers said they weren't victims.
Kasowitz denied to The New Yorker, ProPublica, and WYNC that he donated to Vance's campaign because of the Trump SoHo case. And Vance told the outlets that the donations didn't influence his decision.
Ivanka and Donald Jr. have not made any statements on the news as of press time. (The White House also didn't provide comment to Refinery29.) But the case of Trump SoHo seems to be consistent with the way the family has run their businesses in the past several decades: From Trump University to Trump Steaks, the family relies on their branding and are comfortable bending the truth about their success if it means they will achieve their goals. And now, they're sitting in the White House.