Analysis: What could kill the 'zombie' case against Trump again?

The precise legal hook prosecutors used to elevate falsifying business records to felony charges is nowhere in the indictment itself.

Justine Goode / NBC News / Getty Images

Money, alleged affairs and a presidential election.

It’s a story that has all the hallmarks of a case with instant jury appeal for prosecutors. Given the facts, it’s easy to understand why the “zombie” case, as it's been referred to within the Manhattan district attorney’s office in the past, was resurrected more than once. But now that the grand jury’s indictment of former President Donald Trump has been made public, the legal underpinning of the case could come back to haunt the DA's office. 

The likelihood of prosecutors bringing a charge of falsifying of business records was well reported. But the falsification of business records alone isn’t enough — that falsification needed to be done with the intent to conceal another crime in order to elevate what’s typically a misdemeanor state charge to a felony.

In court Tuesday, prosecutor Chris Conroy offered a succinct theory of the case: “The defendant, Donald J. Trump, falsified New York business records in order to conceal an illegal conspiracy to undermine the integrity of the 2016 presidential election and other violations of Election Laws.”

Prosecutors had uncovered “additional evidence,” according to District Attorney Alvin Bragg, that breathed new life into the zombie once again. The court papers now finally unsealed lay bare allegations of checks, check stubs, invoices and even a thank you dinner at the White House, all in service of a plot — according to prosecutors — to suppress stories that could hurt Trump’s 2016 presidential prospects. But does any of it amount to an actual crime, especially one the district attorney’s office can prove beyond a reasonable doubt? 

The big question on the minds of many was what legal hook prosecutors would use to elevate what would normally be considered misdemeanors to felonies. A firm answer to that important question, however, is found nowhere in the indictment.

Instead, prosecutors filed a 44-paragraph “Statement of Facts” that has the unmistakable flavor of a conspiracy case — the word “scheme” appears eight times. Yet conspiracy wasn’t listed as a separate count in the indictment — something Bragg said Tuesday prosecutors are allowed to do at this stage. A single footnote in the “Statement of Facts” also indicates that prosecutors have more evidence than explicitly outlined in the charging documents. It’s unclear if the investigation continues or if this is the end of the road.

At a news conference after Trump’s arraignment, Bragg identified three other possible crimes Trump allegedly intended to commit to escalate the case to felony territory: federal campaign finance violations; a conspiracy to “promote” Trump’s election by “unlawful means” under state law; and false statements to tax authorities.

More on each of these alleged crimes in a minute, but first — why present the case this way?

What may seem like a head-scratching move to keep the actual indictment silent about the hooks to “bump up” misdemeanors to felonies wasn’t surprising to some lawyers familiar with the DA’s office — perhaps it was even intentional, says Daniel Horwitz, a former assistant district attorney in Manhattan.

“It was ingenious on their part,” Horwitz said, because this way prosecutors haven’t actually committed to a precise theory of liability, leaving their options open until the case reaches the jury.

“Under New York law, a prosecutor can change theories," he said. "This gives them that flexibility.” 

Duncan Levin, another former assistant district attorney in Manhattan, said that Trump’s attorneys will likely make a demand for what’s known as “a bill of particulars” — arguing that prosecutors haven’t spelled out the charges in sufficient detail for Trump to properly defend himself. (The defense team can ask for that anytime now that the indictment has been unsealed, and if prosecutors resist, Trump’s lawyers could take the issue up with the judge.)

“There could be very strong charges, but we just don’t know,” Duncan told NBC News. “It may get laid out in the evidence he’s being given [as part of the discovery process], but that’s not going to be public. So from the public perspective, we really don’t know the basis at all for what each bump-up crime is.”

Trump pleaded not guilty Tuesday to all 34 felony charges of falsification of business records, and has consistently maintained over the years that he did not have an affair with Stormy Daniels. Trump’s attorneys don’t deny that Trump’s former lawyer Michael Cohen paid Daniels $130,000 on the eve of the 2016 election to keep her quiet and that Trump reimbursed him. Instead they argue that the repayment to Cohen — and others like it referred to in the prosecution’s “Statement of Facts — were made to avoid embarrassment to his family. They have yet to explain why Trump and Cohen structured Trump’s repayment to Cohen through monthly checks, documented as “legal expenses,” instead of paying him in a lump sum.

As for the three theories Bragg offered for elevating the charges to felonies, each has distinct challenges.

First, there’s the thorny threshold issue of Trump’s intent. The falsification of business records requires prosecutors to show an “intent to defraud.” So who exactly was defrauded?

The prosecution’s argument in part seems to be that the American public was defrauded by Trump’s efforts to bury negative stories before the election. But the public wasn’t entitled to inspect the books of the Trump Organization. Fraud in the law is not always synonymous with deception or a lie. Whether purely internal records (that no one outside the company relied on), without more, can be used to sustain a charge that requires an intent to defraud is a subject of great debate among professors, former prosecutors, lawyers who’ve practiced in New York, and those who have examined the case law

Suffice it say, even if such charges haven’t received intense scrutiny in past books-and-records cases prosecuted by this district attorney’s office, the Trump lawyers will most likely use any angle to try to get the charges thrown out, and it remains to be seen how the district attorney will make a legal case that the electorate was defrauded by phony record-keeping, if that’s the theory.

Another theory could be that Trump and others planned to defraud the IRS instead. Prosecutors claim in their “Statement of Facts” that Trump, Cohen and the chief financial officer of the Trump Organization, Allen Weisselberg, “took steps that mischaracterized, for tax purposes, the true nature of the payments made.” Prosecutors don’t cite a specific statute or provide any greater details. And no tax crimes are actually charged.

The evidence in the public domain so far suggests the Trump Organization didn’t take a tax deduction for Cohen’s legal fees and Cohen ended up paying more in taxes by declaring more income. What’s more, prosecutors have offered no evidence to date that if the plan was to defraud the IRS, Trump was in on the scheme.

Additionally, Trump’s defense team is likely to pounce on Bragg’s assertion of alleged federal campaign violations, even though again, those alleged violations aren’t charged in the indictment.

Bragg, as a state prosecutor, doesn’t have jurisdiction to bring federal charges, but hanging his hat, at least in part, on alleged federal campaign finance crimes to elevate the misdemeanor charges to felonies is a gamble. Felony books-and-records charges may be the bread and butter of the district attorney’s office, but there was a reason the previous DA commissioned outside law firms to look at the issue when he considered it. As former special prosecutor, Mark Pomerantz, who worked on the case writes in his book that “no appellate court in New York has ever upheld (or rejected) this interpretation of the law.”

One of Trump’s attorneys, Joe Tacopina, regularly suggests in TV interviews that the Federal Election Commission turned down the case against Trump — which is misleading given that the political make-up of the panel at the time paralyzed any action — but it is also not his best argument. The real issue is far more basic: Federal law pre-empts state law when it comes to federal elections. Generally federal courts have jurisdiction over federal campaign issues — hence why federal prosecutors charged Cohen. Trump’s attorneys could file a separate action in federal court hoping to get a restraining order, at least temporarily delaying the case from moving forward, similar to litigation strategy over his taxes that went up to the Supreme Court (which ultimately failed).

It’s also not clear that the state conspiracy charge regarding the promotion of a candidate for public office by “unlawful means” isn’t also pre-empted by federal law. The Federal Election Campaign Act expressly provides that it “supersede[s] and preempt[s] any provision of State law with respect to election to Federal office.” Even if the statute is not pre-empted (and there’s some debate about that), prosecutors could have a timing problem. The statute requires the two or more people to conspire through “unlawful means.” If the unlawful means in this case is the phony reimbursement scheme, the facts as alleged by prosecutors show the business records were falsified after the 2016 election, not before.

The DA’s office may argue in turn that it hasn’t brought any election-related charges and so none of these issues should matter, because probable cause of Trump’s alleged intent to commit crimes is all that matters at this early stage. 

Tuesday’s charging papers don’t answer all these questions, but soon enough prosecutors will need to articulate their legal argument further.