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What the new criminal probe could mean for the Trump Organization

Legal experts say the New York attorney general's decision to team up with Manhattan prosecutors doesn't bode well for the former president's company.

New York Attorney General Letitia James' decision to join forces with the Manhattan district attorney to investigate the Trump Organization "in a criminal capacity" doesn't mean her office has found a smoking gun, legal experts said Wednesday.

But it doesn't bode well for former President Donald Trump's company, either.

"This is not a positive development for the lawyers representing the Trump Organization," Dennis Vacco, a former New York attorney general, said in an interview Wednesday.

James' office, which has been conducting a civil fraud investigation into the Trump Organization's business practices for over two years, acknowledged that the inquiry had broadened in a statement Tuesday night.

"We have informed the Trump Organization that our investigation into the organization is no longer purely civil in nature. We are now actively investigating the Trump Organization in a criminal capacity, along with the Manhattan DA. We have no additional comment at this time," Fabien Levy, a spokesperson for the office, said in the statement.

Manhattan District Attorney Cyrus Vance's office has separately been investigating a variety of allegations of financial improprieties against Trump's company. Court documents show that Vance is investigating "possibly extensive and protracted criminal conduct at the Trump Organization," which could include falsifying business records, insurance fraud and tax fraud.

An official familiar with the details said two lawyers from James' office have been cross-designated to join Vance's team after the attorney general's civil investigation developed some evidence suggesting a possible crime.

Trump, who has denied any wrongdoing, blasted the announcement in a lengthy statement Wednesday as "a continuation of the greatest political Witch Hunt in the history of the United States."

Vacco said the information-sharing could have big benefits for both Vance and James, who is also continuing with her civil investigation.

James' investigation has covered some of the same ground as Vance's, including looking into four real estate projects and Trump's failed attempt to buy the Buffalo Bills, an NFL team. Her office is likely to have some documents that Vance's doesn't, and it has taken depositions — including one from Trump CEO Eric Trump — that could be useful to Vance's team.

The cross-designation also means James' investigators would have access to information from Vance's inquiry that they would otherwise not be entitled to, including Trump's tax returns and other financial information, Vacco said.

"It facilitates a sharing of information," said Vacco, now a partner with Lippes Mathias, where he leads the government and state attorneys general investigations practice team.

Former federal prosecutor Glenn Kirschner, a legal analyst for NBC News and MSNBC, agreed that the two offices' teaming up was bad news for the Trump company.

"Two prosecutorial heads are better than one. To have that sort of synergy, that's bad for the target of the investigation. How bad? We just don't know," Kirschner said.

Daniel R. Alonso, a former top deputy to Vance who is now a white-collar defense lawyer at Buckley LLP, said that it's "not unusual" to have assistant attorneys general cross-designated in DAs' cases but that it isn't typical, either.

"In a case like this, with so many investigations into the same group of companies, you want to be able to see all the evidence that's been gathered," and "putting their heads together just makes sense," Alonso said.

Daniel Horwitz, a former prosecutor in the Manhattan DA's office, said the collaboration doesn't necessarily mean that some bombshell new evidence has been uncovered — it could simply be aimed at "an efficient deployment of resources," which would mean "better coordination and a more efficient overall investigation."

Kirschner said the announcement might also have been meant to send a signal to anyone who might not be cooperating with James' investigation.

"It's a signal to everybody," Kirschner said. "Do not play games."