Trump SoHo: Buyer Fraud Settlement and Abandoned Criminal Investigation After Attorney Donations to DA
Tier 1Resolved2008-01-01 to 2012-08-03
Factual Summary
Trump SoHo was a 46-story hotel-condominium tower at 246 Spring Street in Manhattan, developed through a partnership between the Trump Organization and the Bayrock Group. Beginning in 2008, Trump Organization principals publicly stated that between 31 and 60 percent of units had been sold. In April 2008, the team claimed 31 percent of condos had been purchased. In June 2008, Donald Trump Jr. told The Real Deal that 55 percent had sold, and Ivanka Trump announced that 60 percent had sold. Internal records revealed that as of March 2010, actual sales stood at approximately 15.8 percent.
In February 2011, fifteen buyers filed suit in New York state court alleging fraudulent misrepresentation. The case settled in November 2011. Under the settlement terms, the defendants returned 90 percent of all buyer deposits, plus attorney fees, while admitting no wrongdoing. The buyers collectively recovered approximately 90 percent of $3.16 million in deposits. A non-public component of the settlement required buyers to agree not to cooperate with criminal prosecutors investigating the Trump family unless subpoenaed.
The Manhattan District Attorney's Major Economic Crimes Bureau had opened a criminal investigation in 2010. By early 2012, assistant district attorney Peirce Moser had assembled a case built around internal emails and was preparing potential felony fraud charges against Donald Trump Jr. and Ivanka Trump. Prosecutors who reviewed the emails concluded that the Trump children had approved, known of, and intentionally inflated the sales figures.
On May 16, 2012, Marc Kasowitz, an attorney representing the Trump family, met directly with District Attorney Cyrus Vance Jr. In January 2012, before the meeting, Kasowitz had donated $25,000 to Vance's reelection campaign. On August 3, 2012, Vance closed the investigation without charges. After the case was dropped, Kasowitz donated an additional approximately $32,000 personally and raised further funds totaling more than $50,000 for Vance. Vance returned the contributions only after the donations became public through reporting by ProPublica and WNYC in 2017.
Primary Sources
1. ProPublica: "Ivanka and Donald Trump Jr. Were Close to Being Charged With Felony Fraud": https://www.propublica.org/article/ivanka-donald-trump-jr-close-to-being-charged-felony-fraud
2. Adam Leitman Bailey, P.C., case study on the civil settlement: https://alblawfirm.com/case-studies/trump-soho/
3. Adam Leitman Bailey, P.C., original lawsuit filing documentation: https://alblawfirm.com/press-mentions/lawsuit-5/
Corroborating Sources
1. WNYC: "Trump SoHo Fraud Investigation," partnered investigation with ProPublica, 2017
2. The Real Deal: Coverage of Trump SoHo sales figures and development history
3. New York Post: Described the 90 percent deposit recovery as "staggering" for a civil fraud settlement
Counterarguments and Context
Trump's attorneys argued in the meeting with DA Vance that the sales percentage statements constituted "puffery," a legal term for subjective promotional boasting that does not rise to the level of actionable misrepresentation. The defense also noted that the physical condominiums existed and that buyer deposits were held in escrow, meaning no buyer permanently lost funds. No formal court ruling was ever issued on the merits of these defenses because the criminal case was dropped and the civil case settled. DA Vance stated through a spokesperson that campaign contributions had no influence on prosecutorial decisions.
Author's Note
The building has since been rebranded as The Dominick. The connection between attorney campaign donations and the DA's decision to close the investigation was documented by ProPublica and WNYC through public records and has not been legally adjudicated as improper. The civil settlement and its terms constitute the Tier 1 adjudicated outcome.