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Former U.S. president Donald Trump points as he holds a rally in Florence, Ariz., on Jan. 15.CARLOS BARRIA/Reuters

The two prosecutors leading the Manhattan district attorney’s investigation into former U.S. president Donald Trump and his business practices abruptly resigned Wednesday amid a month-long pause in their presentation of evidence to a grand jury, according to people with knowledge of the matter, throwing the future of the high-stakes inquiry into serious doubt.

The prosecutors, Carey R. Dunne and Mark F. Pomerantz, submitted their resignations after the new Manhattan district attorney, Alvin Bragg, indicated to them that he had doubts about moving forward with a case against Trump, the people said.

Pomerantz confirmed that he had resigned but declined to elaborate. Dunne declined to comment.

Donald Trump Jr., Ivanka Trump subpoenaed in New York probe

Without Bragg’s commitment to move forward, the prosecutors late last month postponed a plan to question at least one witness before the grand jury, one of the people said. They have not questioned any witnesses in front of the grand jury for more than a month, essentially pausing their investigation into whether Trump inflated the value of his assets to obtain favourable loan terms from banks.

The precise reasons for Bragg’s pullback are unknown, and he has made few public statements about the status of the inquiry since taking office. In a statement responding to the resignations of the prosecutors, a spokesperson for Bragg said that he was “grateful for their service” and that the investigation was ongoing.

Time is running out for this grand jury, whose term is scheduled to expire in April. Prosecutors can ask jurors to vote to extend their term but generally avoid doing so. They also are often reluctant to impanel a new grand jury after an earlier one has heard testimony because witnesses could make conflicting statements if asked to testify again.

And without Dunne, a veteran of the office who has been closely involved with the inquiry for years, and Pomerantz, a leading figure in New York legal circles who was enlisted to work on it, the year-long investigation could peter out.

The resignations, after the month-long pause, mark an unexpected turnabout after the investigation had recently intensified. Cyrus Vance Jr., Bragg’s predecessor, convened the grand jury in the fall, and prosecutors began questioning witnesses before his term concluded at the end of the year. (Vance did not seek re-election.)

In mid-January, reporters for The New York Times observed significant activity related to the investigation at the lower Manhattan courthouse where the grand jury meets, with at least two witnesses visiting the building and staying inside for hours.

The witnesses were Trump’s long-time accountant and an expert in the real estate industry, according to people familiar with the appearances, which have not been previously reported. Dunne and Pomerantz also made regular appearances at the courthouse.

The burst of activity offered a sign that Bragg was forging ahead with the grand jury phase of the investigation, a final step before seeking charges.

But in recent weeks, that activity has ceased, and Dunne and Pomerantz have been seen only rarely.

The pause coincides with an escalation in the activity of a parallel civil inquiry by the New York state attorney general, Letitia James, whose office is examining some of the same conduct by Trump.

James, who last week received approval from a judge to question Trump and two of his adult children under oath, has filed court documents describing a number of ways in which the Trump Organization appeared to have misrepresented the value of its properties.

She concluded that the company had engaged in “fraudulent or misleading” practices, and although she lacks the authority to criminally charge Trump, she could sue him.

Bragg’s office must meet a higher bar to bring a criminal case and has encountered a number of challenges in pursuing Trump, including its inability thus far to persuade any Trump Organization executives to co-operate.

Trump has disputed the notion that he inflated his property values or defrauded his lenders, and has accused Bragg and James, both Democrats who are Black, of being politically motivated and “racists.”

As Bragg’s grand jury presentation has come to a halt, another serious criminal inquiry into the former president has been gaining steam. In recent weeks, a district attorney in Atlanta asked a judge to convene a grand jury for an investigation into Trump’s attempts to overturn the results of the 2020 election in Georgia.

Another criminal investigation, in New York’s Westchester County, is examining Trump’s financial dealings at one of his company’s golf courses.

The Manhattan investigation, which proceeded in fits and starts for years, was the most developed of the three criminal inquiries into Trump. It resulted in the indictments this past summer of the Trump Organization and its long-serving chief financial officer, Allen Weisselberg, on separate tax-related charges.

After announcing those charges, the prosecutors zeroed in on a subject that has spurred much debate over the years: Trump’s net worth.

They have questioned whether Trump defrauded his lenders – sophisticated financial institutions like Deutsche Bank – by routinely inflating the value of his assets, the Times has previously reported.

In particular, the prosecutors have focused on annual financial statements Trump provided the lenders, scrutinizing whether he overvalued his various hotels, golf clubs and other properties to score the best possible loan terms.

Trump’s accounting firm, Mazars USA, compiled the statements based on information provided by the Trump Organization, leading the prosecutors to question whether the company had given its accountants bogus data.

Early this month, Mazars notified the Trump Organization that it would no longer serve as its accountant and that it could no longer stand behind a decade of Trump’s financial statements.

Mazars said it had not, “as a whole,” found material discrepancies between the information the Trump Organization provided and the true value of Trump’s assets.

But given what it called “the totality of circumstances” – including its internal investigation and James’ court papers – Mazars instructed the company to notify anyone who had received the statements that they “should not be relied upon.”

Even with Mazars’ retraction, a criminal case would likely be difficult to prove. The documents, known as statements of financial condition, contain a number of disclaimers, including acknowledgments that Trump’s accountants had neither audited nor authenticated his claims.

And the prosecutors have thus far been unable to persuade Trump’s long-serving chief financial officer to co-operate with the investigation, depriving them of the type of insider witness whose testimony can be crucial to complicated white-collar criminal cases.

Trump’s lenders might also not make for sympathetic victims with a jury. The lenders, which made millions of dollars in interest from Trump, conducted their own assessments of his assets.

Despite the challenges, the prosecutors had been moving forward.

In the fall, Vance convened what is known as a special grand jury, a panel of 23 Manhattan residents, chosen at random, to hear complex cases like the one involving Trump. Over the course of months, the jurors were expected to meet in secret to hear testimony from witnesses and examine other evidence put forward by the prosecutors.

Special grand juries last six months, and at the end of these presentations, prosecutors typically direct the jurors to vote on whether there is “reasonable cause” to believe that the person could be guilty. While it is not a foregone conclusion that a grand jury will indict the target of an investigation, such panels routinely vote to bring the charges that prosecutors seek.

Late last year, the grand jury heard testimony from Trump’s accountant at Mazars about Trump’s annual financial statements, the Times previously reported. Soon after, the prosecutors questioned two editors for Forbes Magazine, which has estimated Trump’s net worth over the years for its billionaires list.

The accountant testified again last month, people with knowledge of the appearance said.

A day later, the prosecutors questioned a real estate expert who specializes in property valuation, according to people with knowledge of that appearance. The witness works for the consulting firm FTI, which the district attorney’s office hired in 2020 to help analyze Trump’s financial documents.

In the days after this testimony, the prosecutors lined up at least one other witness to appear before the grand jury. But late last month, they postponed the testimony, according to one of the people with knowledge of the matter.

If Bragg ultimately closes the investigation, he could face political fallout in Manhattan, where Trump is generally loathed. And the district attorney has already had a rocky start to his tenure, after a memo he released outlining his policies for the office was met with furious pushback from local officials, small businesses and the public.

Bragg – who was sworn in Jan. 1 – is a former federal prosecutor and veteran of the New York state attorney general’s office, where he oversaw civil litigation against Trump and his administration under James’ predecessor.

The district attorney’s criminal investigation into Trump began in summer 2018 under Vance, who initially looked into the Trump Organization’s role in paying hush money to a pornographic actor who said she had an affair with Trump.

The inquiry grew out of a federal case against Trump’s former fixer, Michael Cohen, who pleaded guilty to arranging the hush money and said he did so at the direction of Trump.

The focus of the investigation shifted after Vance, in 2019, subpoenaed Mazars for copies of Trump’s tax returns. Trump sued to block the subpoena, sparking a bitter 18-month legal battle that saw the former president take the case to the U.S. Supreme Court, where he lost twice.

Dunne, who was Vance’s general counsel and stayed on to help Bragg with the Trump investigation, argued the case before the Supreme Court. And around the time that the prosecutors received Trump’s tax documents, Vance recruited Pomerantz, a prominent former prosecutor and defence lawyer, to help lead the investigation.

Around this time, the prosecutors turned their attention to Weisselberg, pressuring him to co-operate. But he refused, and in July, they announced an indictment against him and the Trump Organization.

The case accused Weisselberg and the company of a 15-year scheme to pay for luxury perks for certain executives, like free apartments and leased Mercedes-Benzes, off the books.

Weisselberg pleaded not guilty, and his lawyers filed court papers this week seeking to dismiss the charges. A judge has tentatively scheduled a trial for late summer.

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