Ivanka and Donald Trump Jr. mysteriously dodge charges for Trump Soho sales practices

Trump's New York real estate empire has been no stranger to controversy, and here's another piece of news to add to the pile of ever-growing drama surrounding the real estate-turned-political family. An investigative article between ProPublica, WNYC, and The New Yorker has revealed one real estate scandal that involves the president's two eldest children, Ivanka Trump and Donald Trump Jr.

In the spring of 2012, according to the report, the siblings were facing a criminal case that prosecutors in the Manhattan District Attorney’s office had spent two years working on. Ivanka and Donald Jr. were suspected of misleading prospective buyers of units in the Trump Soho, a hotel and condo development that was struggling in the market.

In one email, according to the report, "...the Trumps discussed how to coordinate false information they had given to prospective buyers. In another, according to a person who read the emails, they worried that a reporter might be onto them. In yet another, Donald Jr. spoke reassuringly to a broker who was concerned about the false statements, saying that nobody would ever find out, because only people on the email chain or in the Trump Organization knew about the deception..."

Trump Soho was unveiled by now President Trump back in 2006, marketing "condo-hotel” units in which buyers got a hotel room rather than an apartment, and were legally prohibited from staying there more than 120 nights per year. Sales launched in 2007, right before the financial crisis, and the building struggled to sell. In 2008 Ivanka announced that 60 percent of the building was spoken for—in reality, only 15.8 percent of units were sold by 2010.

But the overall sales deal hinged on the Trump Organization selling at least 15 percent of the units, because by law, the sales couldn’t close with anything less. Without enough sales, the Trumps would have had to return the buyers’ down payments. Some buyers who felt misled sued the Trump Organization and others involved in the project in New York federal court in 2010.

(There was also a separate lawsuit, which claimed Trump SoHo was developed with the undisclosed involvement of convicted felons, plus financing from questionable sources in Russia and Kazakhstan.)

The Major Economic Crimes Bureau of the D.A.’s office opened an investigation of the Trump siblings that same year, and by then the Trump Organization hired several top New York criminal defense lawyers to represent Donald Jr. and Ivanka. While the lawyers conceded that their clients had made exaggerated claims, they argued it still didn’t amount to criminal misconduct.

There was also another issue at hand, in that the Trumps and their partners had reached a settlement with the misled buyers. According to the article, "The defendants agreed to return 90 percent of the buyers’ deposits, plus their attorneys’ fees. But they extracted a rare concession in return: The plaintiffs agreed not to cooperate with prosecutors unless they were subpoenaed."

As the prosecutor's case dragged on, Donald Trump, Sr.'s personal lawyer, Marc Kasowitz, got involved. Kasowitz had donated $25,000 to the reelection campaign of Manhattan District Attorney Cyrus Vance Jr., exactly the man Kasowitz approached to ask that the investigation be dropped. The result, three months after the two men met? Vance overruled his own prosecutors, telling them to drop the case.

Just before the 2012 meeting, Vance’s campaign had returned Kasowitz’s $25,000 contribution—but less than six months after his office dropped the case, Kasowitz made an even larger donation and helped raise more money from others. Vance has told the reporting team that he will return Kasowitz’s second contribution, as well. He also says the donations given were unrelated to the case at hand.

“We did the right thing,” Vance says in the article, referring to the decision to drop the case against Ivanka and Eric Jr.. He also noted that New York law allowed him to accept those financial contributions, even though he now has said he'll return the money.

• Ivanka and Donald Trump Jr. Were Close to Being Charged With Felony Fraud [ProPublica]
• All Trump SoHo coverage [Curbed]