Trump, NY attorney general recommend financial monitors for Trump Organization

NEW YORK - Donald Trump and New York Attorney General Leticia James, who's pursuing a massive civil fraud lawsuit against the former president and his business empire, disagree on virtually everything about the case.

But both sides on Thursday recommended the same former federal judge as one of their suggested nominees for the monitor a New York state court judge has ordered to oversee Trump Organization financial decisions.

Barbara Jones served as a judge in the Southern District of New York, where she presided over accounting and securities fraud cases, as well as antitrust and racketeering litigation. Now a partner at Bracewel LLP, she has focused her work on monitorships.

She was the special master appointed to oversee whether records seized from former Trump lawyer Michael Cohen by the FBI were protected by attorney-client privilege. She also was appointed to oversee Charter Communications' compliance with Federal Communications Commission requirements when the company acquired Time Warner Cable and Bright House Networks in 2016.

Former President Donald Trump gestures as he departs Trump Tower, Wednesday, Aug. 10, 2022, in New York, on his way to the New York attorney general's office for a deposition in a civil investigation. (AP Photo/Julia Nikhinson)
Former President Donald Trump gestures as he departs Trump Tower, Wednesday, Aug. 10, 2022, in New York, on his way to the New York attorney general's office for a deposition in a civil investigation. (AP Photo/Julia Nikhinson)

The recommendations stem from Manhattan Supreme Court Justice Arthur Engoron's ruling last week after the state attorney general sought a financial monitor for the Trump Organization. Despite arguments by Trump lawyers, Engoron ruled that a monitor was justified to ensure that Trump's companies don't shift financial assets in an effort to avoid the maximum $250 million penalty that could be imposed if the attorney general's office prevails in the civil lawsuit.

The suit alleges that Trump, his companies and his three eldest children were part of a 10-year scheme "that grossly inflated" the former president's personal net worth by billions of dollars, and then used the higher values to win more favorable loan terms from lenders.

The alleged actions violated New York laws and likely saved Trump, his business and his family more than $150 million from 2011-2021, the complaint contends.

Trump lawyers argue there was no wrongdoing, because the companies made all repayments on time, as the lenders received millions of dollars in fees and never complained about the transactions.

Along with Jones, James' monitorship recommendations included Aaron Marcu, a partner at Freshfields Bruckhaus Deringer LLP, and Frances McLeod, a founding partner of Forensic Risk Alliance.

Marcu represents Volkswagen in the auto giant's resolution of criminal and regulatory investigations that arose from diesel emissions by the company's vehicles.

McLeod currently serves as a Department of Justice-appointed monitor for two cases. One is Balfour Beatty Communities LLC, a U.S. military privatized housing provider that pleaded guilty in a fraud scheme. The other involves FCA US LLC, an auto company that pleaded guilty to conspiring to violate the U.S. Labor Management Relations Act.

Trump's attorneys recommended one additional monitor nominee, Kelly Donovan, the managing director for forensic investigations at KPMG LLP, an accounting and professional services giant. She worked in the New York Attorney General's office before James' tenure there.

Engoron is expected to name the monitor as soon as next week, after the opposing legal teams have an opportunity to comment on one another's recommendations.

However, Trump's legal team is continuing its battle to overturn Engoron's decision to appoint a monitor, a move it argues could badly undermine the Trump Organization's operations. Last week, it characterized the decision as nationalizing the company.

Trump appealed the ruling to New York State Appellate Division's First Department, a mid-level state appeals court. In a ruling on Wednesday, Associate Justice Angela M. Mazzarelli, denied a request by Trump to prevent Engoron's decision from taking effect while the appeals considered whether to overturn the ruling entirely.

Instead, Mazzarelli said that Trump's appeal would be heard by a full bench of the court later this month on an expedited basis.

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This article originally appeared on USA TODAY: Trump, NY AG recommend picks for Trump Organization financial monitor