Topline
A federal criminal investigation into former President Donald Trump’s media company Trump Media has expanded to include potential money laundering violations linked to an $8 million loan with Russian ties, the Guardian reported Wednesday, potentially further threatening the ex-president’s media company and its planned merger with special purpose acquisition company Digital World Acquisition Corp (DWAC).
Former President Donald Trump addresses the annual Conservative Political Action Conference (CPAC) … [+]
Key Facts
Citing anonymous sources, the Guardian reports federal prosecutors in New York expanded their criminal probe into Trump Media & Technology Group, which owns Trump’s Truth Social platform, at the end of last year to scrutinize the $8 million in payments.
The payments were reportedly made in two installments, with $2 million being paid to the company in December 2021—when the Guardian notes it was on the “brink of collapse” after its planned merger with DWAC got delayed—and another $8 million was paid two months later.
The payments came from Paxum Bank, which is registered in Dominica, and ES Family Trust, and the Guardian reports Paxum Bank is partly owned by Anton Postolnikov, an apparent relation of Aleksandr Smirnov, an ally of Russian President Vladimir Putin who worked for Putin’s government until 2017 and now runs the Russian-controlled maritime company Rosmorport.
Investigators were reportedly tipped off about the payments in October 2022 by whistleblower Will Wilkerson, a former executive at Trump Media, who told the Guardian the payments initially “caused alarm” at Trump Media and executives considered returning the money but decided not to, in part because they couldn’t afford to lose it.
Trump’s son Donald Trump, Jr., was reportedly aware of at least the first payment coming through, the Guardian reported, quoting an email sent to him about it to “keep [him] in the loop,” but the outlet noted it’s unclear if Trump—Trump Media’s chair—was aware of the payments and their origins, saying he “did not seem to be particularly interested in managing the day-to-day running” of the company.
Trump Media and the Justice Department have not yet responded to requests for comment.
What We Don’t Know
It’s still not clear how much legal exposure Trump Media faces for the $8 million payments, the Guardian notes, and under federal money laundering rules prosecutors would have to show they were the product of “unlawful activity” and Trump Media actively tried to conceal the source of the payments. Prosecutors are also reportedly interested in the payments because Paxum Bank finances businesses related to pornography and sex work, which are also at a higher risk of money laundering. The reported money laundering allegations and the payments’ “potentially unsavory sources” could also hamper Trump’s 2024 campaign even if they don’t result in any criminal charges, the Guardian notes, particularly after his 2016 campaign already faced investigations over its alleged Russian ties.
Key Background
Trump Media was formed soon after Trump left office in 2021, as the ex-president planned his own social network Truth Social in the wake of being booted off traditional social platforms following the January 6 riots. The company has faced turmoil over its planned merger with DWAC, first announced in October 2021, which would give the media company an influx of capital and allow it to trade on the stock market. While SPACs like DWAC are not allowed to have any mergers planned when they file their IPO, DWAC was allegedly in talks with Trump about acquiring Trump Media months before the merger was formally announced, the New York Times reported in October 2021, potentially violating securities laws. That drew the scrutiny of federal investigators, and both DWAC and Trump Media reported in the summer of 2022 that they had received grand jury subpoenas as part of the probe. The investigations have threatened the merger between the two entities, which faces a deadline of September 2023 to be completed after DWAC shareholders agreed to delay the merger in November.
Further Reading
Federal investigators examined Trump Media for possible money laundering, sources say (The Guardian)
Trump’s $300 Million SPAC Deal May Have Skirted Securities Laws (New York Times)
Trump’s Social Media Company Subpoenaed By New York Grand Jury (Forbes)
Trump’s SPAC Is Screwing His Own Supporters While Enriching Wall Street Elites (Forbes)
More Trouble For Trump’s Truth Social: Three Execs Abruptly Depart SPAC As Lingering Investigations And Market Chaos Imperil Deal (Forbes)
Trump’s SPAC Investors Do Not Know What They Are Buying (Forbes)
Source: https://www.forbes.com/sites/alisondurkee/2023/03/15/trumps-media-company-reportedly-under-federal-investigation-for-money-laundering-linked-to-russia/