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Transcript: The Beat with Ari Melber, 9/21/22

Guests: David Enrich, David Kelley


The New York Times Business Investigations Editor David Enrich joins THE BEAT with Ari Melber to talk about Donald Trump facing massive new fraud cases. Former SDNY chief David Kelley joins Ari Melber to talk about New York Attorney General Letitia James referring to Donald Trump for possible criminal prosecution by the IRS and the Feds. Former President Donald Trump and his three children Don Jr., Eric, and Ivanka, accused of providing false information to banks, insurance companies, and state authorities, in order to get favorable loans and cheat on taxes. The attorney general seeking $250 million in penalties and aiming to bar them from doing business in New York.


NICOLLE WALLACE, MSNBC HOST: Thank you so much for letting us into your homes during these extraordinary times. We are grateful. THE BEAT WITH ARI MELBER starts right now.

Hi, Ari.

ARI MELBER, MSNBC ANCHOR: Hey, Nicolle. Nice to see you.

Welcome to THE BEAT. I am Ari Melber. We have this breaking news on legal action hitting Trump.

New York Attorney General Letitia James today suing Donald Trump, three of his children and his entire company. This is new. It builds on thing you`ve heard about but it is a culmination of this investigation she has so doggedly pursued. We`re going to get into it with our experts.

Let me tell you, James is saying Trump has committed, quote, "staggering fraud," that he lied about the value of his properties, that he lied to the authorities, that he lied in financial statements, that he did it for over a decade, and that he furnished, and this matters for the law, false information to banks, insurance companies, as well as state authorities, and then he would try to get favorable loans and cheat on his taxes.


LETITIA JAMES (D), NEW YORK ATTORNEY GENERAL: Pattern of fraud and deception that was used by Mr. Trump and the Trump Organization for their own financial benefit is astounding. Claiming you have money that you do not have does not amount to "The Art of the Deal." It`s the art of the steal. And there cannot be different rules for different people in this country or in this state. And former presidents are no different. No one is above the law.


MELBER: That is the statement. That is the attorney general who has proven so aggressive in so many cases, without fear of favor. She`s pursued people in both parties, and while the nature of her work means that some of this is vaguely familiar, especially to people in New York and people who follow legal news, but really around the country, you might say, didn`t I hear about this before? Haven`t I heard about the asset valuation? Haven`t I heard about basically that he`s under investigation?

Well, everything just changed with this case. It is the culmination. It is a bigger legal problem for him than he`s ever had before in the attorney general`s office, and this really first of a kind action today was rocketing across the world of news.


ANDREA MITCHELL, MSNBC ANCHOR: We are following unprecedented breaking news involving former President Donald Trump.

ALISYN CAMEROTA, CNN ANCHOR: The New York attorney general just hit Donald Trump with a $250 million lawsuit.

JOHN ROBERTS, FOX NEWS ANCHOR: New York`s Attorney General Letitia James alleging widespread business fraud.

CHRIS JANSING, MSNBC ANCHOR: Filing a lawsuit against former President Donald Trump, Donald Trump Jr., Ivanka Trump, and Eric Trump.

JOYCE VANCE, FORMER U.S. ATTORNEY: Documents don`t lie, and documents don`t forget.

UNIDENTIFIED FEMALE: This is tough, tough stuff for the Trump Organization. There`s no question this is a dark day for them.


MELBER: Dark and tough for them because of the exhaustive receipts. The lawsuit has over 200 fraudulent actions or misleading valuations. The penalties could go up to a quarter billion. Trump and his children could be barred from doing business not only at the Trump Org but from really running any New York company. That`s one of the punishments that James is seeking. The family and organization could also not be allowed to get money anymore, to get liquidity, to get bank funding in New York, a big deal.

Trump has always said he`s a deal maker, and let`s be clear. He convinced a lot of people with understandable props, actions, funds, support from the banks, at times the New York legal and governmental community, really largely looking the other way, and by the way, that includes a lot of registered Democrats in New York who fill out some of these offices. So, a lot of people in America thought, well, he is this rich and he must be somewhat good at business. So this hits him legally.

It also hits the core promise and brand he`s ever made. What you see on the front of the buildings. It also touches on his most high-profile properties, Trump Tower, 40 Wall Street in Manhattan, where James says he doubled the valuation. That`s not a rounding error. Claiming something that was worth $200 million should be $530 million. Seven Springs, which is an upstate property, Trump said $250 million. It was 10 times more than what James thought were comparable properties.

Mar-a-Lago, Trump said $739 million, according to James` new case. She says it`s worth, no shade, no disrespect, it`s not worth $739 million, no matter how large it is, or $500 million or $200 million or maybe $100 million. James says, and there`ll be a court process to find out whether she`s more truthful or he is, but she says it`s just $75 million. Or Trump Tower, which I mentioned, Trump said $800 million. James says that should actually be factually valued around $200 million.

Now, why do we have to go through each of them? You might be watching at home and say, Ari, I think I knew Donald Trump lied about his properties.


Why is that breaking news? Well, the answer is, this is not about what you kind of thought or assumed or what was obvious from his bluster, and it`s now about whether he ever told fables on "The Apprentice," which was carried on our sister channel NBC, by the way, full disclosure. You`re allowed to go on entertainment programs and tell all kinds of stories.

This is about whether he lied to the government, lied to the authorities, lied to the banks, lied to the IRS, in ways that meant you had to pick up the tab, and you, the honest taxpayer, if you are paying your taxes, you pick up the tab while he runs out on the bill. And then claims to be a billionaire.

So where do we go from here? Well, we have the experts to walk us through it. I`ll tell you the most important thing we`re going to get to in more depth which is the criminal referrals. We`ll hit that later this hour but right now, we have Professor Melissa Murray from NYU Law and former Watergate prosecutor Nick Akerman.

Professor, you know, we try to keep it clear around here. I mentioned that a lot of people are familiar with the idea that Trump doesn`t always tell the truth and that, at times, that`s legal. What`s different here, you know, you can hold this up this way or you can hold it this way, it`s really quite a voluminous case, is documenting the ways that she says lies were illegal. How strong is this new case?

MELISSA MURRAY, NEW YORK UNIVERSITY LAW PROFESSOR: I think this is a really strong case going forward and it`s almost 220 pages, and it details, in really granular detail, the degree to which the Trump Organization overinflated the value of almost all of its properties in its New York holdings in order to secure more favorable loan policies, more favorable loan terms and also to take advantage of tax breaks, for example, for conservation easements by being able to write off the difference between the alleged value of the property, and what would be donated because they didn`t actually recoup that value by selling it because of the conservation easement.

So it is actually staggering how much is here. She`s done a very careful job, meticulously organizing and documenting all of this. One thing I did notice here is that she also notes that a number of criminal laws might have been broken, suggesting that this is not just going to be about civil liability, but that there may be possible criminal exposure down the line as well.

MELBER: Yes. And I mentioned that, too, because that`s so interesting, and we`ll get to that. Here`s a little more of what she said today.


JAMES: White-collar financial crime is not a victimless crime. Everyday people cannot lie to a bank about how much money they have in order to get a favorable loan to buy a home or to send their kid to college. And if they did, the government would throw the book at them. Why should this be any different?



NICK AKERMAN, FORMER ASSISTANT SPECIAL WATERGATE PROSECUTOR: Look, she`s absolutely right. And this case, I mean, actually, is just staggering in terms of what Donald Trump is facing. And the reason is, because he wound up taking the Fifth Amendment to every single question asked of him. If you go through that complaint, I guarantee you that he was asked about each one of those allegations.

MELBER: Right.

AKERMAN: And he basically said, I refuse to answer on the ground that a truthful answer would tend to incriminate him. That can be used against him in the court. I mean, I don`t see how any way he gets out of this. I mean, he is backed into a corner, and if I were the AG`s office, I wouldn`t even make a deal with him at this point, unless he`s willing to give up everything.

MELBER: You mentioned that, here we have in 2007, the way he -- when he was forced to testify, this deposition, he would sometimes, he didn`t run from everything, but he would say, quote, "My net worth fluctuates, and it goes up and down with markets and attitudes and feelings, even my own feelings."

What does it tell you that James so methodically pursued this and got him to sit down, held him in contempt, and then got him to, which you can use in a civil case, duck, and she says that shows something.

AKERMAN: Well, I mean, she was very dogged on this. I mean, she did not give up. She took each one of these. If you look through this huge complaint, I mean, there are very specific allegations. They`ve got him in meetings. They`ve got him being told certain things by various people. He`s involved as the guy -- the capo di tutti capo of the organization that runs everything. And I guarantee you, again, he was asked about each one of these, and each one of these, he took the Fifth. That really puts him in the soup, and kind of ends the case.

I mean, I just don`t see where he goes with this. I think that if -- these are the allegations they`ve got, and these are the allegations they questioned him about, and he took the Fifth Amendment on each and every one of these, he`s looking at the $250 million, he`s looking at being barred from doing business in New York state.


He`s looking at having a monitor put in charge of all of his companies. His children are going to be barred. I mean, there`s nothing good in this for him at all. And it certainly doesn`t come at a great time with the midterms coming up. I mean, it`s just another one of these Trump situations that`s out in the open in addition to the classified information, in addition to January 6th, that is going to put the focus on Donald Trump going up to the midterms, which is exactly what the Republicans don`t want.

MELBER: Yes, you mentioned that timing, and of course, Professor, the timing is partly delayed because of Donald Trump`s many tactics. He gave his response today. He also attacked her. He can give whatever response he wants. He`s also tried to say it`s a witch hunt, it`s political. I`m curious what you think of that on the merits. There can be prosecutors who are called into question, they`re not above reproach, but it`s interesting with James because with regard to politics and different parties, you know, we have a headline to remind folks.

If you followed the case of a very popular, at one time very popular Democrat if you go back far enough, Andrew Cuomo, she pursued that case just as she`s taken on Trump.

MURRAY: She`s really been the model of a prosecutor here. She`s taken on people on both sides of the aisle, people who supported her own candidacy. I mean, she`s really not been bound by any particular ideological constraint. She`s really pursued the law here, and again, she`s been very careful. This isn`t a criminal prosecution. It`s a civil suit, which means that the standard of proof is going to be lower than reasonable doubt.

It`s going to be likely a preponderance of the evidence, which is considerably lower, easier to prove for the government, and it means he may not be going to jail, but as Nick says, he`s probably going to be disgorging vast amounts of his current property and he`s going to be barred from doing business in the state of New York, essentially, if you read the terms of this complaint and if a judge and jury agree that this is the appropriate remedy.

So she`s really done a good job sewing this up, making her case, and making sure that she is above the fray. He can call this a witch hunt, he can call her a witch, but he can`t say she`s wrong on this.

MELBER: Right. And it`s ultimately going to be the judge that`s going to have to adjudicate, did she ask for too much? Did she go too far? Do they think it`s an overreach or is there a strong case here? And one thing that`s probably not going to move that judge is name-calling, but much more a question of, if you have a defense, Mr. Trump, and you didn`t want to offer it in the deposition, can you offer it now? Why are these things being valued at quadruple, quintuple the rate? Why is there evidence that you misled the government, and why should other people who have less money than you pick up your tab? All fair questions.

Professor Murray, Nick Akerman, on a big news night. Thanks to both of you for kicking us off.

We are going to turn to a special report on how we got here, and our experts, and as I mentioned, the thing rattling Trump most tonight, the criminal referrals. There`s two of them in here. We haven`t gotten to that in depth yet. We`re back in just 60 seconds.


MELBER: Welcome back on this huge legal news day for Donald Trump and his companies with a top financial officer, you may recall, had already been convicted, and now, he and other executives from the company and Trump and his children stand accused by the attorney general of fraud, lies, tax crimes and more.

The AG is using her power to also refer Trump for possible prosecution by the fed, sending new cases to the Southern District of New York and the IRS. We have more on that later in the broadcast. Right now, though, our special report will explore how we got here because it matters. James says her evidence shows that Trump business boiled down to a fraud, and Trump has always insisted that it was not that, but rather a golden brand built as a family business.


DONALD TRUMP, FORMER PRESIDENT: I`m the largest real estate developer in New York. My company is bigger than it ever was. It`s stronger than it ever was.



ERIC TRUMP, DONALD TRUMP`S SON: We have a great family dynamic. I think that`s probably the most incredible thing about the Trump Organization. We really, really work well together.

DONALD TRUMP JUNIOR, DONALD TRUMP`S SON: My primary job is making sure not to kill the golden goose, which is the brand, and the brand that he`s created over such a long period of time.


MELBER: Everyone you just saw is accused in this new case, which seeks to use government power to ban them not only from running the Trump Organization or funding it with more loans but to ban them from doing that with any companies in New York. Authorities have already made some progress here. Take Trump`s top money man. He`s already barred from a range of business activity because he is now a convicted felon.

Allen Weisselberg facing hard time at Rikers. There he was on his perp walk, handcuffed after pleading guilty. When Donald Trump denies wrongdoing and says today this is, quote, "another witch hunt" like the Mueller probe. And he`s entitled to defend himself. He`ll get his day in court. The truth is that some of the roots of today`s legal move did begin during that Mueller probe because it was that legal pressure which turned Michael Cohen from an almost comically extreme Trump defender to a cooperating star witness, saying Trump`s whole business was not about branding, not about innovation, but about lying to banks and insurers in the government to rip off -- to rip off enough money to appear more profitable than the business was.


MICHAEL COHEN, FORMER TRUMP ORGANIZATION LAWYER: I know Mr. Trump. I`ve stood by him, shoulder to shoulder, for the past decade.

REP. ALEXANDRIA OCASIO-CORTEZ (D-NY): Did the president ever provide inflated assets to an insurance company?


OCASIO-CORTEZ: Do you think we need to review his financial statements and his tax returns in order to compare them?


I`m obviously very loyal and very dedicated to Mr. Trump. I think he`s going to be a great president.

WILLIAM HIGGINS (D), THEN MISSOURI REPRESENTATIVE: To your knowledge, did the president or his company ever inflate assets or revenues?


HIGGINS: And was that done with the president`s knowledge or direction?

COHEN: Everything was done with the knowledge and at the direction of Mr. Trump.


MELBER: Now that shift did grow out of that legal pressure on Cohen, but that history is not a defense for Trump tonight. If the authorities show up to check out a 911 call about a burglar, and they find evidence of other crimes, they don`t just ignore it because it`s not why they showed up. It`s their job to pursue it.

So let me remind you tonight, we checked. When Cohen said under oath all the fraud was directed by Trump and said it in public where everyone could hear, the authorities with jurisdiction over that company have a duty to investigate, and that`s what the AG did within one month of the testimony you just saw. In March 2019, she began this probe, culminating in today`s 220-page filing, which wages a battle against Trump`s now infamous tactics.

You know about this. He does things to limit his legal exposure, avoiding e-mail, destroying records, using lawyers for dirty work to limit the evidence against him. Indeed, this new case picks up at a time when five Trump lawyers have faced legal trouble because of his actions. John Eastman, the coup plotter you see right there, plus Cohen, Clark, Giuliani, and a new lawyer under scrutiny in the classified documents case.

So this is a thing he does, and prosecutors are very aware of it now, so see what James does here. In this new case today, she lays out a roadmap for how to win or possibly indict Trump if they take the referrals, by documenting evidence that directly implicates Trump and deals with how much he uses lawyers and cutouts. So she has the receipts here, the employees were acting at Mr. Trump`s direction.

Proof that Trump knew his acts were improper, personally employing deceptive schemes, personally pushing to increase the value of things. And other examples you see on the screen. Now it`s not personal, and the law`s not supposed to be, but James is saying she has the receipts that Trump personally pushed and directed, which she calls a fraud. So that is a lot tonight.

Now is there a but? Yes. In fairness to Trump, the legal history of how we got here also includes another probe into the same stuff which did not determine that it had enough evidence to charge him. That was actually a super interesting part of today`s presentation, if you were watching closely. For years, the AG`s office and the Manhattan DA have been talking up their joint probe into these same activities, this alleged fraud.

And we know they worked together. Today, James largely focused on her findings and her referral to the feds. She almost completely elided any reference to the open Manhattan DA probe led by Alvin Bragg.


Now that is the probe which got the conviction of the CFO, but it`s also the probe that reviewed a lot of evidence and did not indict Trump when it had the chance. Instead, when some prosecutors in that office presented the evidence that they thought was chargeable, Bragg said, no. He said he didn`t see a strong enough case. Then some of those prosecutors resigned over it. You may recall, we reported on that. Today, that same DA says their probe is active.

So the DA made progress and added to the evidence here, but he did stop short of making a criminal case against Trump. And by the way, if you read between the lines of this whole thing, and there are many lines, it seems, although she didn`t say it exactly, it seem to me, as a reporter, that James thinks the criminal case is valid, the one that the DA passed on.

Now, if Trump loses James`s case, the penalties are huge, as we have touched on tonight, being functionally run out of doing business in New York, which is the financial capital of America. James also asking the courts to bar all of the people here, Trump, his children, the executives, from running these companies or getting funding, and then going through, the case alleges how they lied about Trump Tower and Mar-a-Lago, the site of that other federal probe right now. And lied about Seven Springs, that upstate New York estate which Eric Trump has talked up for a long time.


E. TRUMP: This is a place that`s really special to myself, it`s very special to my brother, my father, really the whole family. And it`s just really our compound, and I`ve spent so much of my life here. It`s a special place for me and one that I`ll always remember and one that I`ll always be very close to.


MELBER: Special is fine. That`s an opinion. Timelapse photography is fine. That`s a way that maybe the property looks better. But this new case alleges that Trump hid and concealed information to inflate its value, that Eric Trump, who found it all so special, also felt the business need to, quote, "fraudulently increase the value of the tax savings they were trying to get."

Now, many people ask why this takes so long. I had people come up to me literally in the street, OK, Ari, like, years and years, what`s taking so long? Well, the truth is there can be several answers to that question. Tonight`s news adds a version of an answer. James has been methodically investigating and putting people under oath and checking their stories, and then clashing with those witnesses who spent months fighting her, like Trump himself, who, remember, he claimed to talk tough, then didn`t want to talk at all.

That makes him look bad, legally, even if he`s availing himself of his rights against getting in more criminal trouble. But the idea that he never wanted to defend himself and talk about it, that, as Trevor Noah pointed out, in his case, looks suspicious.


TREVOR NOAH, LATE-NIGHT HOST: Trump decided not to talk? I mean, now we know something shady is going on, right? No, because when has Donald Trump ever refused to talk? We can`t get the man to stop talking. Donald Trump not talking is like Taylor Swift taking the bus. That`s not a thing.


MELBER: Not a thing. Now, Trump reportedly pled the Fifth over 400 times in the testimony in the new case I`m telling you about. Now in a civil case, pleading the Fifth can be cited as evidence. Everyone, including Donald Trump, has the right not to be forced to incriminate themselves and go to jail. That`s what the Fifth is for. Incriminate yourself in criminal cases. But that doesn`t mean that you can then use that to avoid all other legal issues.

The precedent on that is very clear, so it can be civil evidence, and James showed an example of that today, noting Trump pled the Fifth and repeatedly said, quote, "same answer" when asked about lying about these properties. She also uses the evidence that she gathered on Trump`s three oldest children, also named in this case, who are officers of the company, Ivanka and Don Junior testified this summer. Eric Trump was called back in 2020, and the filing references also Allen Weisselberg who`s now a felon, saying he conceded to improperly inflating apartment values and then invoked the Fifth on other lines of questioning.

Check this out. Weisselberg asked, if the value is overstated by a factor of three, he replies, I didn`t do the math, one-third, I would agree with that. They follow up, so, on the order of a $200 million overstatement, give or take? And Weisselberg confirms give or take. So the now-convicted felon, who was in charge of the money at Trump Org, admits the change here, what James says is fraud, was on the order of $200 million on just that one asset.

And again, let`s be clear. If Mr. Weisselberg or these Trump officials were involved in this for only one asset, you wouldn`t have a case, and you certainly wouldn`t have 200 pages.


What you have here, at least according to Letitia James`s office and investigation, is a pattern and a practice of a criminal organization. That`s not my job to be judge and jury here. As I`ve emphasized to you, there are some things that could also go in Trump`s favor, especially at the criminal level that I mentioned with the DA, and his defenses will come out and we`ll cover them. But right now, as an opening shot at a new case that wants to run him out of business in New York, well, this is a two by four.

How do we make sense of it? There`s a lot of numbers that are hard to understand. But we have one of the reporters at the center of all of this, "New York Times" business investigations editor David Enrich after the break.




GREG KELLY, HOST, NEWSMAX TV: Are you concerned that they may send an indictment your way, your brother`s way, your sister`s way?

ERIC TRUMP, DONALD TRUMP`S SON: You know what, I`m not Eric because guess what, you know, we`ve always lived amazingly clean lives and believe me if they could have, they already would have, right? I mean, that`s what they wanted. That was their end goal.


MELBER: Eric Trump speaking last year, we`re joined now by the business investigations editor for The New York Times, David Enrich, the author of Servants of the Damned, Giant Law Firms, Donald Trump, and the Corruption of Justice. One of the most comprehensively informed guests for exactly this story. This is a big one.


MELBER: What jumps out to you in it that you think is either significant or new?

ENRICH: Well, it`s just surprising to me to see in such vivid detail, the lengths to which Trump went to allegedly mislead the people that he was in business with. And that really should not come as a surprise after all of the reporting that`s out there, and just what we`ve all seen firsthand. But, you know, I`ve been covering this stuff for a long time, and I was even surprised by just how clear some of this stuff seems.

Obviously, we have not heard a full defense from Trump`s field, but to see the way that Trump himself was directly involved, allegedly, in essentially overstating asset values and things like that to win favor with banks like Deutsche Bank, it just -- it confirms a lot of what we already knew but it`s very -- it was surprising to me at least to see this in the open.

MELBER: Would you say James got a hold of things that even exhaustive investigative reporters have not yet?

ENRICH: Oh, absolutely. I mean, there`s -- I`ve been covering Deutsche Bank for years and, you know if I do say so myself had done a pretty good job of getting inside the bank, but I and other journalists lack subpoena power. It sounds like Deutsche Bank has been extensively cooperating with her office for years. And we now have a much fuller accounting of not only what the bank was thinking, but the information that Trump and his lieutenants are providing.

MELBER: Have you -- have you thought about asking your editors for subpoena power?

ENRICH: I`ve asked all the time.


ENRICH: (INAUDIBLE) funny. I understand why.

MELBER: So, this goes to the point that she got new stuff. When you say some of its surprising again, I mentioned, we hear from many people in the nation who say, well, there on the Trump. There`s a lot of cons. And none of it`s surprising. Do you mean specifically, not that he might break a rule, but it`s surprising that she actually seems to have caught him being sneaky and getting busted with his fingerprints in ways that he`s often evaded before?

ENRICH: Yes, it`s the fingerprints, I think that are surprising to me. And there -- Trump has been just masterful over the years, kind of maintaining at least some plausible deniability. And if what she lays out in this complaint today is true, his fingerprints are all over this in a way that he seems to have violated a lot of his kind of cardinal rules over the years, which is to keep some distance have --

MELBER: We have this on the screen, take a look, because we showed this, but you`ve got so much background. This is just some of the Times where she -- again, these are not tweets, these are not opinions. This is filing in court where she says she can back up personally specifically knew instructed. What do you see here on the screen?

ENRICH: Well, it`s clear that Trump is all over this, right? This is not something -- what I had heard from my own reporting was that Trump would go to Deutsche Bank, he or his lawyers would present them financial information. Deutsche Bank people, which was his primary lender would look at this and kind of roll their eyes and know that he was inflating his assets.

But to see that Trump was specifically attesting to this stuff, it was specifically presenting this information and knew explicitly what his lieutenants were doing. I mean, that if true, I think is really damning, and it`s hard for him to overcome.

MELBER: Right, which goes to whether he`ll hit these penalties will hit him, or does he find a legal defense. Final question. You had several reporters in the press conference ask if this was all going on like this, what does that tell you about American banking?

ENRICH: Oh, man --

MELBER: I mean, international banks, all the banks.

ENRICH: That it`s a reckless dysfunctional mess. And there -- the fact that Deutsche Bank knew about and had suspicions about him vastly overstating those assets and continue to lend them hundreds of millions of dollars. And that is not something a normal, well-functioning responsible business would ever do in a million years.

MELBER: Yes. And that goes to how many other linkages there are and whether the so-called system sometimes has tried to say, oh, well, maybe it`s better for everyone at the top to not get into this kind of stuff. And yes, it`s important as your reporting has showed. Thanks for being here.

ENRICH: It`s my pleasure.

MELBER: Appreciated. David Enrich. Still -- coming up, we have the sweeping nature of this if it hits everyone and the attorney general wins. Then there`s the case referred to the Feds. I mentioned this. Donald Trump has a lot of federal criminal problems right now. James says he should have two more. We have the perfect guest on that the former chief of SDNY next.




LETITIA JAMES (D), NEW YORK ATTORNEY GENERAL: We believe the conduct alleged in this action also violates federal criminal law. And we are referring those criminal violations that we`ve uncovered to the United States Attorney for the Southern District of New York and In the Internal Revenue Service. The pattern of fraud and deception that was used by Mr. Trump and the Trump Organization for their own financial benefit is astounding.



MELBER: New York Attorney General James there citing 200 examples of alleged fraud in the new case referring these claims for criminal investigation. You can see right here, the Southern District of New York and the IRS. Her complaint lists several potential federal claims, including false statements, the financial institution, and bank fraud typically handled by the feds.

This is a big deal if they act on it. And we turn now to someone who has received exactly these kinds of referrals and the hot potato they can pose. Former SDNY chief, David Kelley, also my former boss. Welcome back.


MELBER: I`m good. It was really interesting to see James make her case. We`ve covered that for the -- actually the bulk of our newscast. We turn now to the case she wants others to make. Let`s start with SDNY which you use to run. What happens when a referral comes in? What is its significance? What do you think will happen here?

KELLEY: Well, let`s start off with the thing you have to understand which I think I`m sure you do, which is the bar that she has to bring a civil case is much lower than a criminal case. So, it take it that way. That`s number one. Number two, what caught me when I saw that her -- referred this to the IRS in the Southern District, was -- this is not really news, right?

A lot of this stuff has been out there in the news already about inflation of his worth, and basically how he did it. So, there`s not an awful lot of surprises in this complaint. A lot of this stuff has been out there. And I was thinking she`s making a referral and while she should.

But I think that, you know, isn`t this stuff that was already out there that the southern district and IRS wanted to jump on it when they have done it already? And maybe they have, and maybe they have.

MELBER: Well, let`s get -- let`s get into that, David. If you`re SDNY and you say, yes, we saw Cohen testify. We looked at the federal exposure in New York. I mean, it`s one of the ways they would receive a referral is to say, you`re referring us to something we`ve already looked at or investigated and we went no farther. I mean, if they had indicted someone we would know.

KELLEY: Yes, it`s possible they did that, but look -- and I -- my guess is they already probably have at least scratched the surface on this. And what they may be doing is to say, well, look, she`s really pulled together an awful lot of evidence here. So maybe whatever we were doing, or have been doing, we should use this and take another look at it.

Because they may have -- the A.G. hadn`t may have developed a lot of witnesses that weren`t either available or known to the Feds, like -- you know, for example, you put up on the screen some snippets from the complaint, which really are very important for a criminal case, because one of the things you`re going to need to prove, particularly for being a case against somebody like, you know, the grifter in chief, which is to say, you know, he knew he directed.

How do they prove that? And the big question is, how do you prove that in in a criminal case? So, in that regard, it may be new information for the Feds, that may be something they, you know, decide to chew on, it may be something that they decide not to? Because they may say, look, we already took a look at this, we couldn`t do it.

My guess is whatever they`ve done before they`ll probably take this referral and take a closer look at it to see whether or not they have witnesses of which the Feds weren`t previously aware, some evidence and witnesses` information, you know.

MELBER: Yes, and they have the new Weisselberg stuff and then we read off some of that. You have a guy who`s now convicted involved saying, oh, yes, we did that to the tune of 200 mil. If they look at this and decline to go forward on it, would their practice be than to tell us or not?

KELLEY: No, practice would not be to say anything about it. I would really find it interesting if the IRS hasn`t already dug into this.

MELBER: Well, let`s go -- so that`s what I want to ask you, IRS. It seems the issue there is, whatever their history and institutional loyalties are, and the top changes, but a lot of the middle doesn`t. Donald Trump has worked over the IRS, according to New York Times, to an incredible degree. I mean, just unreal how many years he didn`t pay any taxes.

So, when the IRS gets this referral, it`s James saying, not only -- I mean, it`s my read give us yours, but it seems she`s not only saying hey, look what I found that Trump did. She`s saying and look how you were asleep at the wheel.

And it`s almost like not that you need one more special counsel running around. But isn`t that a tough spot if the IRS says that what they more or less signed on to are allowed to happen forever, which is a legal term as you know, they now are going to indict on? I mean, walk us through that.


KELLEY: Well, look, I think the IRS is going to dig into it. The IRS has a lot of processes and procedures they need to go through, I`d be surprised if they`re not going to take a really close look at this. So, it`s really hard to say. And like I say, I`d also be surprised if they, notwithstanding what Trump did to the IRS before. I`d be surprised if they haven`t, nonetheless, dug into this stuff.

MELBER: Interesting --

KELLEY: Not -- maybe (INAUDIBLE) it`s going to -- look the other thing, too is you figured this way. You know, is the southern district going to come out and say that they open up an investigation? No. They`re not going to report the results of the investigation.

It`s possible, you can think that you know, a Congress committee is probably going to call on the IRS and say, OK, what are you doing about this too, you know, to the IRS. They`re not going to get an answer from the Justice Department. The Justice Department says we`re not going to comment on investigations. But the IRS is a little bit -- a little bit different footing.

MELBER; Yes, it`s a huge deal. And the way we organize news stories, it`s sort of like, it took us to 45 in the hour to get to the fact that the former president is facing two federal criminal referrals. I mean, yes, if Obama or Bush were facing those right now be a huge deal. There`s kind of a collective overwhelming quality to his problems. Mr. Kelley, I got to fit in a break. Thank you for being here.

KELLEY: Sure thing.

MELBER: Appreciate you. Coming up later in the hour, I told you last night, announcement about the January 6th report and something I`m doing, we heard back from a lot of you. We`re going to explain where BEAT viewers came down on that by the end of the hour. But next, the scope of this suit, how it hits Trump`s children, their futures, business, political or otherwise, and how the right is coping today. That`s next.




BILL BARR, FORMER U.S. ATTORNEY GENERAL: It`s a political hit job. She grossly overreaches when she tries to drag the children into this. Yes, they had roles in the business, but this was his personal financial statement. And children aren`t going to know the details of that and be able -- and nor are they expected in the real world to do their own due diligence.


MELBER: Attorney General Bill Barr, who served of course in the Trump administration, and has been critical of some of Trump`s legal problems lately, going out there on defense against Attorney General Letitia James new suit. Barr also referring to the Trump children and saying basically leave them alone. Meanwhile, James has laid out exactly why she thinks this is collective fraud.


JAMES: Today, we are filing a lawsuit against Donald Trump for violating the law. As part of his efforts to generate profits for himself, his family, and his company. He did this with the help of the other defendants, his children. Donald Trump Jr., Ivanka Trump, and Eric Trump and former Trump Organization CFO Allen Weisselberg, And Trump Organization controller Jeffrey McConney.


MELBER: That`s just some of what she laid out today. It is true, you cannot do guilt by association, family, or otherwise. Mr. Barr is suggesting that perhaps they don`t have the goods.

The complaint, this lawsuit says the children were intimately involved in the operation of the business, were aware of the true financial performance, which the suit alleges they were all lying about and says Donald Trump Jr., Ivanka Trump, and Eric Trump knowingly participated in a fraudulent scheme that was integral to the company that required their participation.

And these are exactly the claims and assertions that are backed up partly by evidence in the 200-plus page suit, and which will be adjudicated in court. Meanwhile, you have the former CFO Allen Weisselberg now a convicted felon. He`s named more than 80 times in this suit. And someone we`ve heard less about Jeffrey McConney, the Trump Org. controller.

Well, he cut the actual checks. He`s now a defendant as well. Again, no guilt by association, can`t be in trouble just for working for Trump Org. or having Trump in your family name. Each of these people will get their day in court, as I`ve emphasized, but it`s a lot of evidence coming down on them that they were involved, and they knew.

We`re going to fit in a break. But I do have something else to tell you. It is interesting news, and it builds on the announcement I shared with you last night about the January 6th investigation and the forthcoming report. I`m going to share more with you next.



MELBER: This final January 6th hearing is now slated for next week. MSNBC will be covering it live with the special recaps in the evening. And we talked a lot about what we learned from investigations which can occur in government, we would have been recovering the fruits of one tonight in New York or journalistic investigations.

What we expect to see next week is this committee taking the last eight hearings which covered so many different disparate parts of the plot. And trying to sum it all up for Americans who`ve been watching, and we know there`s been great interest in the hearings. But that`s not the only way the committee is going to sum it all up.

They also are already working on what is expected to be an exhaustive report. And we mentioned this last night while also announcing that I am writing a foreword to the HarperCollins edition of the January 6th committee`s forthcoming report. I`m writing about the coup conspiracy. You can see the cover of the book here. And we mentioned this to you last night here`s the news tonight.

That book has now just hit number one of all books for sale in America on Amazon. Number one above the novels, the fiction, the cookbooks. So, some of you I got to say were clearly listening last night when I told you that I`ll be writing this foreword and that you can preorder the January 6th report.

Now, that shows the strong interest not only in the report but in the committee`s work. And I would say that whether you buy that book or not it suggests there are many Americans who want to hear. What else this committee has to say in the hearing next week, in the forthcoming report clearly, and in any reforms that the Congress may pass having got its arms around just how sprawling the insurrection and coup effort is.

So, I will say now tonight what I couldn`t say last night if you do want to buy what is currently the number one book in America on Amazon, thanks to you, and your interest last night. You can still order it now at or get it from any independent bookseller.

Wherever you want to order your books you can search Melber January 6, you`ll get the report when it comes out, and my new original piece on the coup conspiracy. If you already, did it from last night, we noticed, and thank you. That does it for me. "THE REIDOUT WITH JOY REID" starts now.