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The Trump Investigation You Probably Haven’t Heard About

Plus: A handy list to sort out the ones you have heard of, including the case expected to result in his arrest this week.
March 20, 2023
The Trump Investigation You Probably Haven’t Heard About
This photo illustration shows an image of former President Donald Trump next to a phone screen that is displaying the Truth Social app, in Washington, DC, on February 21, 2022. - Donald Trump's new social media app started a gradual rollout late February 21st and should be "fully operational" by late March, potentially raising the former president's profile more than a year after he was banned by major platforms. Trump has described Truth Social as an alternative to Facebook, Twitter and YouTube, all of which banned him following the assault on the US Capitol by his supporters on January 6, 2021. The former president has been accused of inciting his followers to use force in a bid to overturn the result of the 2020 election. (Photo by Stefani Reynolds / AFP) (Photo by STEFANI REYNOLDS/AFP via Getty Images)

Even among the especially well informed, five has been the magic number of criminally tinged investigations implicating former President Donald J. Trump:

First, there is the investigation by the Department of Justice (DOJ) into the classified documents found at Mar-a-Lago.

Second, there is DOJ’s investigation of the effort to stymie the transfer of power following the 2020 election, including the January 6th insurrection at the U.S. Capitol. Both of the first two investigations are now led by Jack Smith, the special counsel appointed last November; there is little publicly available information about how they are proceeding.

Third is the investigation—led by Fani Willis, the district attorney for Fulton County, Georgia—into election fraud in that state, arising from Trump’s having asked the Georgia secretary of state to “find” enough votes to hand him an Electoral College win there. A “special grand jury” hearing the evidence wrapped up its work earlier this year, and Willis said in late January that a decision on whether to press charges was “imminent.”

Fourth is the set of investigations (some criminal, some civil) into Trump’s various corporate enterprises. The attorney general of New York state, Letitia James, and the district attorney of Manhattan, Alvin Bragg, have each been leading probes. Their efforts have already seen results—including the closure of the foundation whose funds Trump admitted misusing and the criminal conviction of both the Trump Organization and its chief financial officer Allen Weisselberg for tax fraud—and are still ongoing.

Fifth is the long-running investigation Bragg is leading into the alleged campaign hush-money payment to porn star Stormy Daniels. This is the case that could dominate the headlines this week: Trump himself said on Saturday that he expects to be “ARRESTED ON TUESDAY” and called on his followers to “PROTEST.”

But as it turns out, there’s a sixth—this one involves both DOJ and the Securities and Exchange Commission (SEC), and it implicates conduct since Trump left office and after he was expelled from Twitter and launched his own social media platform, Truth Social.

The matter involves a so-called “blank check company” called Digital World Acquisition. Blank check companies have no established business plan but gather funds and sell shares to investors with the intention of merging with or acquiring another company in the future. The investors have no idea what they will ultimately be investing in. Under SEC rules, after an initial public offering (IPO), a blank check company’s funds must be deposited in escrow prior to a transaction and held there until shareholders officially approve a merger. As of 2020, a particular form of blank check company known as “special purpose acquisition companies,” or “SPACs,” made up 50 percent of the market for IPOs. This figure represents a huge spike prompted by the SEC’s temporary inability to approve traditional IPOs due to the COVID-19 pandemic. Trump took advantage of it to launch Truth Social.

In April 2021, Trump’s representatives had a videoconference with Patrick Orlando, Digital World’s chief executive. A month later, Digital World advised the federal government in securities filings that it had not identified or had discussions with any potential merger targets.

In October, Trump Media & Technology Group merged with Digital World, which provided $293 million in funding it raised in its IPO on September 8, 2021, mostly from big investors who pitched in as much as $30 million apiece. The series of events drew the attention of the SEC, which opened an investigation in December 2021, presumably out of a concern that Trump and Digital World might have secretly planned the merger before going public and failed to disclose their communications to the SEC. According to reporting by the New York Times, the average time for public blank check companies to find a target to merge with and complete a deal is 17 months. Digital World did it within a month of going public. The SEC probe has delayed the Trump Media-Digital World merger indefinitely.

Trump, who reportedly knew Orlando beforehand, launched his lumbering social media site, Truth Social, through Trump Media in February 2022. The delayed merger, if completed, would provide the company with up to an additional $1.3 billion in capital. As of April 2022 (more current data is not readily available), there were 513,000 active daily users and 2 million monthly users on the site, as compared to Twitter’s 368 million active monthly users.

In June 2022, it was revealed that a federal grand jury—which issued subpoenas to Digital World board members—is also involved. Last week, the Guardian reported that federal prosecutors have expanded their criminal investigation to examine two loans totaling $8 million that were wired to Trump Media through the Caribbean from entities connected to an ally of Russian Federation President Vladimir Putin.

The first payment of $2 million came in December 2021, around the same time the SEC opened its initial investigation. Orlando, who is a licensed SEC broker, reportedly sourced the payment from Paxum Bank, which is registered in the tiny Caribbean island of Dominica (not to be confused with the Dominican Republic). A promissory note identified another entity, ES Family Trust, as the lender. Two months later, ES Family Trust sent Trump Media another $6 million.

A trustee of ES Family Trust, Angel Pacheco, is reportedly also a director of Paxum Bank, which has a history of providing banking services for the sex worker industry, purportedly putting it at a higher risk of engaging in money-laundering activity. Paxum Bank is also partly owned by Anton Postolnikov, an apparent relation of Putin ally Aleksandr Smirnov. Smirnov, in turn, heads the maritime company Rosmorport, which is controlled by the Russian Federation. Smirnov worked for Putin in a variety of posts in the Russian government—in the office of the president, in the Ministry of Justice as first deputy minister, and elsewhere.

Will Wilkerson, a former Trump Media executive who was fired from his post, reportedly filed a whistleblower complaint with the SEC alleging that the Trump Media-Digital World merger was rife with “fraudulent misrepresentations . . . in violation of federal securities laws.” Also according to Wilkerson, in the spring of 2022, Trump Media’s then-chief financial officer, Phillip Juhan, considered returning the $8 million cash infusion but decided not to because, with only $12 million total in its accounts at the time, the company was already financially vulnerable.

There is some indication that Donald Trump Jr. was aware of the $2 million payment. The Guardian reports that he sent an email acknowledging a message that the payment was pending.

As a SEC licensed broker, Orlando’s liability includes due diligence mandates under SEC anti–money laundering rules. Federal anti–money laundering statutes apply more generally, although prosecutors must show, among other things, that the individuals in question knew that the transaction involved proceeds of some other criminal activity, such as a felony, and that the transaction was designed to disguise its source. Wilkerson has reportedly said that, although Trump was the chairman of Trump Media at the time, he didn’t seem particularly interested in the day-to-day running of the company. He was, however, interested in the conclusion of the merger, as he owned 99 percent of the shares without investing any of his own money.

So, to sum up: Donald Trump is involved in yet another probe that could potentially result in criminal charges against him or his associates, this one a yearslong federal investigation by the SEC and DOJ relating to the creation and funding of his Truth Social platform.

A final twist in the criminal probe involving Trump Media involves the former president’s use of social media. He was banned from Facebook and Instagram following the January 6th attack on the Capitol, but Meta (which owns those platforms) announced in January that he would be reinstated, and on Friday of last week, he resumed posting on Facebook.

Yet he has not yet returned to what was once his favorite mode of communicating with the public—tweeting—even though Elon Musk reinstated Trump’s Twitter account last November. Trump’s Truth Social platform has, again, a total of 2 million monthly users; his dormant Twitter account is vastly larger, with 87.4 million followers as of today. So why has he stayed away from Twitter?

The reasons no doubt include the stalled merger. If Trump gets back on Twitter, he will devalue his own platform and disappoint investors. Shareholders could then sue him. Columbia University law professor Eric Talley told Semafor: “If it’s going to look, later on, that he never had that intention” of staying off Twitter “but he just wanted to convince people that they should go ahead and close [the SPAC deal] that’s kind of a textbook securities fraud lawsuit.”

Kimberly Wehle

Kimberly Wehle is a contributor to The Bulwark. She served as an assistant U.S. attorney and an associate independent counsel in the Whitewater investigation. She is currently a professor at the University of Baltimore School of Law. An ABC News legal contributor, she is the author of three books with HarperCollins: How to Read the Constitution—and Why, What You Need to Know About Voting—and Why, and, most recently, How to Think Like a Lawyer and Why—A Common-Sense Guide to Everyday Dilemmas. Her new book, Pardon Power: How the Pardon System Works—and Why, is forthcoming in September 2024 from Woodhall Press. @kimwehle.