Donald Trump has operated amid a swamp of corruption, self-dealing, and outright criminality ever since his real estate–developer father gifted him his first millions. For almost as long, Voice investigative reporter Wayne Barrett dogged Trump’s dirty deals. In this exposé from October of 1993, Barrett reveals how, in 1988, as a favor to Trump, then–U.S. Attorney Rudy Giuliani quashed an investigation into the shady financing of Trump Tower. Barrett uncovers a tale of a mobster looking to purchase an apartment with dubious financing while the Donald, of course, looks the other way, and even signs a six-figure bond for the numbers ring chief who would soon be on trial for murder and running a multimillion-dollar gambling empire out of his Trump Tower digs. Despite the convicted criminal later defaulting on his mortgage, the Trump organization termed him one of the complex’s “best tenants.” As Barrett reports:

Tony Lombardi, the G-man who thought the G in his unofficial government title stood for Giuliani, single-handedly conducted a low-profile probe of Donald Trump in early 1988, closing it despite evidence of fraud and an informant who said he could implicate the supposed billionaire.

Besides Trump and Giuliani — who, at the time this article was written, was in the midst of a mayoral run — the cast of characters also includes the notorious fixer Roy Cohn and various high-rollers enjoying Mike Tyson fights in Atlantic City.

As usual, Barrett seeks answers to questions that mobsters and crooked developers wish he had never asked. Every New Yorker has dealt with a credit check when they’re looking to rent or purchase an apartment. Here’s how Barrett describes the successful 1984 application of Robert Hopkins, the gambler who was one of Trump’s earliest tenants:

Accompanying Hopkins’s bank application were two purported tax returns, describing Hopkins as “a wholesale jeweler and Russian enamel dealer” and claiming a 1982 income of $563,000 and a 1983 income of $616,000. The problem is that the state prosecutors who convicted him on gambling charges a couple of years later could find no evidence that he had any job or reportable income in either year.

As the saying goes, the devil is in the details, and Barrett was one of the first to give detailed briefs to the public on Trump’s endlessly shady business practices.

The Case of the Missing Case: How a Trump Probe Died in Rudy’s Office

October 12, 1993



Tony Lombardi, the G-man who thought the G in his unofficial government title stood for Giuliani, single-handedly conducted a low-profile probe of Donald Trump in early 1988, closing it despite evidence of fraud and an informant who said he could implicate the supposed billionaire. The quick shutdown of this mysterious inquiry — which Lombardi concedes was never given a case number in Southern District files, or assigned to any assistant U.S. attorney, but which reportedly was known to then U.S. Attorney Rudy Giuliani — launched a personal relationship between the agent and his subject Trump. It may also have helped create a political alliance between Lombardi’s ambitious boss and the developer who was, at the time, both the city’s biggest political donor and most outspoken critic of incumbent Ed Koch.

Within a few weeks of Lombardi’s two face-to-face, hour-long interviews with Trump about his alleged involvement in the suspect sale of two Trump Tower apartments to the mob-connected operator of the city’s largest illegal gambling operation, the developer announced in May 1988 news stories that he could raise $2 million in a half hour if the then U.S. Attorney decided to run for mayor. Trump ultimately did become one of the co-chairs of Giuliani’s first fundraisers, sitting on the dais of his May 1989 extravaganza at the Waldorf (he, his family, and his staff raised and gave at least $41,000 to the campaign). But the endorsement of Giuliani by the then wildly successful developer, whose renovation of the Wollman Skating Rink had made him a momentary civic hero, yielded dividends at the time that went far beyond the dollars he raised and attracted headlines in every tabloid (“Trump Puts Bucks Behind Rudy Giuliani” screamed the Post).

Lombardi, who says he introduced himself to Trump by announcing that he “worked for Rudy Giuliani,” acknowledges that he was aware that Trump “gave money to Democrats and Republicans, and liked to spread it around,” though he disputed any connection between his quick shutdown of this probe and Trump’s early encouragement of a Giuliani candidacy. “I think Trump’s more of a conservative guy,” Lombardi contended, “and I think he might have just gone along with Giuliani’s style.” (Trump is not supporting Giuliani now, and even backed away from him in the later stages of the 1989 campaign. Giuliani declined to discuss this or any other aspect of the story with the Voice.)

While Lombardi contends that he did not formally inform the “very upset” Trump that he’d terminated the inquiry, he says that Trump would’ve understood that it was dead at some point in mid 1988. “He knew by the very fact that there was no more inquiry,” the agent says. By then, Trump had emerged as a public Giuliani booster even though a longtime favorite of his, City Council President Andrew Stein, was still talking about a possible mayoral run.

In the same time frame as the Lombardi inquiry (though not necessarily related), two sources who were then top aides to Trump said that he began meeting with Arnold Burns, the former associate attorney general who was a Giuliani mentor and would soon become the finance chairman of Giuliani’s election committee. Burns had recently left the Justice Department and joined Proskauer, Rose, Goetz, and Mendelsohn, a leading Manhattan law firm. Trump talked with Burns about retaining him, though neither source could recall if he ever did (indications are that he did not). One source said that Trump’s purpose in reaching out to Burns was “to establish a better relationship with Giuliani” through Burns and that the legal work was “irrelevant.” Burns also reportedly entertained Trump in his Sutton Place apartment, put together the Waldorf fundraiser that included Trump, and was once an investor in a company that owned a controversial helicopter business used by Trump and was managed by a convicted cocaine dealer.

The juxtaposition of the Lombardi inquiry, the Trump approach to Burns, and Trump’s public rhapsody about the wonders of Rudy clearly do not establish a cause-and-effect relationship. Trump’s support of Giuliani in 1988 and through much of 1989 was, in all likelihood, due to several factors. But it could not have failed to make an impression on Trump that a top Giuliani aide had quickly dispatched what might have been a thorny and protracted inquiry. “There was not a thing I did that was unethical,” Lombardi says about the case. “It was done the same way I handled everything.”

THE “CRIME”

In March 1986, the tabloids blazed with stories about the arrest of Robert Hopkins, the six-foot five-inch, 250-pound, mob-tied head of a numbers ring that took in a half million dollars a week and was run out of a hundred different locations across the city. Charged with luring a rival mobster to his execution outside an East Side restaurant where the two had just dined, Hopkins was tabloid fodder because he lived in a luxurious Trump Tower duplex on the 59th and 60th floors where he was arrested. He and his roommate were also indicted on charges of running the gambling operation out of the tower apartments (they eventually were convicted on these charges, but the murder count was dismissed). Trump Organization officials were quoted in a Post story as saying that Hopkins was one of the complex’s “best tenants,” adding that he’d stated on an application for his apartments that he was a building-company owner and that he had survived a reference check before moving into the tower 14 months earlier.

But the story of how Hopkins got his Trump apartments was far more complicated. Hopkins and Trump were both clients of legendary fixer Roy Cohn, as was “Joe Beck” DiPalermo, the major mob figure behind the Hopkins operation. With Cohn getting the two together, Hopkins became one of the earliest purchasers of Trump Tower apartments, going to contract in 1981, when construction on the building had barely begun. He was the kind of buyer — agreeing to pay a reported $2 million for the apartments — who helped set the upscale market price for Trump’s first residential project. Trump personally signed a bond agreement with Hopkins, obligating him to return a $164,000 Hopkins deposit. But Hopkins’s wholesale lack of verifiable income and assets made financing the purchase extremely difficult, so Hopkins was unable to close on the deal until June 1984, long after the building opened. He finally managed to secure a mortgage from Midlantic, a New Jersey–based bank that handled many of Trump’s casino accounts.

A letter from Cohn’s firm indicating that “the Trump Organization has validated the status” of the Hopkins purchase helped push the bank to approve the dubious deal. Trump, who knew Hopkins personally, also had an interest in Hopkins’s ability to pay long-term — since the Trump Organization collects common charges from tower occupants.

Accompanying Hopkins’s bank application were two purported tax returns, describing Hopkins as “a wholesale jeweler and Russian enamel dealer” and claiming a 1982 income of $563,000 and a 1983 income of $616,000. The problem is that the state prosecutors who convicted him on gambling charges a couple of years later could find no evidence that he had any job or reportable income in either year. In addition, the tax preparer who supposedly signed the returns sold his business after suffering a totally disabling stroke in January 1983, three months before the first return was executed. However, Hopkins’s mortgage broker, Frank LaMagra, had forged the name of the same incapacitated accountant on the 1983 tax returns of another mob associate of his, Louie “Ha Ha” Attanasio, and wound up convicted of conspiracy and aiding and abetting the submission of materially false returns a few years later.

In addition to the apparently bogus tax filings, Hopkins’s bank submissions included appraisals of two diamonds Hopkins claimed to own — valued at a combined $324,000 by a supposed jeweler who was actually part of Hopkins’s gambling ring. Though Hopkins also submitted an appraisal assigning a $2.1 million value to the apartments (the same price the Trump Organization publicly claimed Hopkins paid), the actual price was $1.6 million. The closing documents put the 81 per cent mortgage at $1.3 million and contained no evidence of any Hopkins payment to cover the difference between the mortgage and purchase price (no wire transfer of photocopied check).

To complete this bizarre transaction, Hopkins came to the closing with a suitcase containing between $150,000 and $200,000 in cash, which he sat counting at the far end of the Trump Tower conference room table. Trump himself paid a visit to the assembled group, saying hello to Hopkins and Hopkins’s attorney, Ted Teah, an associate in the Cohn law firm who was also a member of the City Planning Commission (Hopkins also knew the other notorious member of the Cohn firm — party-boss-turned-racketeer Stanley Friedman, who was seen meeting with Hopkins on a police surveillance). Midlantic required Hopkins to make a $150,000 deposit, which would only be returned when Hopkins made payments totaling a specified amount under the terms of the mortgage, and Hopkins brought the cash to make the qualifying deposit.

According to witnesses at the closing as well as a Midlantic official, LaMagra left in a Trump limo to put the cash in the Asbury Park branch of the bank. LaMagra was later convicted in two federal criminal cases — one of which involved the same Midlantic bank officer who waited late that day to receive Hopkins’s gambling largesse. Investigators would later examine the question of whether the required disclosure reports were made on this unusual deposit.

After a few months of payments, Hopkins defaulted on the mortgage, and, even before his 1986 arrest, the bank had moved to foreclose, stymied only by its own reluctance to seize the apartments (it already determined that resale prices on this line of apartments were running $125,000 less than the outstanding mortgages). The documents for this deal — particularly after Hopkins’s indictment indicated what his real source of income was — made it look like a planned pillage of the bank. Yet even after Hopkins was busted and exposed in this widely publicized case, the bank made no complaint to prosecutors about the apparent swindle, and even offered halfhearted assistance when pushed by a Manhattan assistant district attorney for evidence about the apartment acquisitions. Their postindictment passiveness appeared as connected to their broader relationship with Trump as their original decision to grant the mortgage.

Hopkins was one of a half dozen felons drawn to Trump Tower — buying or renting many of its most expensive apartments. Another notorious resident was coke dealer Joey Weichselbaum, the manager of the helicopter company once indirectly owned in part by Arnold Burns, who didn’t move into the two adjoining apartments his girlfriend bought until he got out of federal prison in 1989. Trump was so close to Weichselbaum he’d previously rented him an apartment he personally owned in another Manhattan Trump building, letting Weichselbaum pay in part with bartered copter service. Trump also wrote a letter of support for Weichselbaum to his sentencing judge in 1986.

THE “PROBE”

In March 1988 — shortly before Frank LaMagra was to go to trial in Brooklyn federal court — he and his attorney began talking to Tony Lombardi about a possible deal. Since LaMagra was under indictment in a jurisdiction other than the Southern District, where Lombardi worked, the approach was strange. The purpose was to try to get LaMagra out of his pending case across the river, either with a pretrial severance or a plea arrangement that offered LaMagra a shot at probation. The bait was Donald Trump.

LaMagra, who met with Lombardi at the Bridge Cafe in lower Manhattan on at least one occasion, claimed that Trump “participated” in the alleged washing of the Hopkins cash. According to Lombardi, LaMagra also “got into some detail about the documents” submitted to Hopkins to get the apartments. A source close to LaMagra says he also offered to wear a wire on Trump and others — a suggestion Lombardi says he can’t recall. In this meeting and numerous conversations with LaMagra attorney Michael Pollack, Lombardi got no more than a sketchy description of how LaMagra might implicate Trump. LaMagra’s full cooperation was guaranteed if Lombardi could get him out of his jam in Brooklyn.

The reason LaMagra went to Lombardi was because of his attorney’s close ties to the investigator, as well as the belief that Giuliani’s office alone had the clout among local federal prosecutors to protect LaMagra from another possible indictment — this time by Jersey federal prosecutors. Lombardi was also perceived as personally close to Brooklyn U.S. Attorney Andy Maloney, and thus particularly well positioned to get Maloney to cut LaMagra a break. But before Lombardi made his approach in Brooklyn, he decided to gather documents about the apartment acquisition that might strengthen his pitch for leniency. Strangely enough, at least according to Lombardi, he decided to get the documents from Donald Trump (so much for the idea of wiring LaMagra or letting LaMagra “work the street” for federal prosecutors, the ostensible rationale for the deal Lombardi was supposed to be seeking).

After an initial interview with Trump alone, says Lombardi, he went back for a second meeting with the developer and the staff who participated in the Hopkins closing. He came away with what he said was “a lot of documents,” a version of events quite different from LaMagra’s, and a wide-eyed admiration for the supposed subject of his probe. “I was given carte blanche,” he says now. “The guy met me without an attorney; he answered all my questions. There was never any hesitation. I was comfortable and I proceeded on and on and on. I amazed myself that I was able to talk to him for an hour without being interrupted. And the same thing the second time. He could have called in a battery of lawyers. He could’ve stymied me every which way. He just didn’t do it.” (In a second interview with Lombardi as the Voice went to press Monday, he contended that the first meeting with Trump lasted only five to 10 minutes.)

Lombardi knew he was likely to run into a stonewall in Brooklyn — namely Ruth Nordenbrook, the assistant who was trying the LaMagra case and who was only interested in flipping LaMagra against his codefendant Attanasio (an officer LaMagra felt he could do nothing but refuse). A complicating factor was that Maloney himself was close to Trump — his brother was employed by Trump in a top corporate post and his small law firm had been retained by Trump shortly before he took office in 1986 (Trump was at his private swearing-in ceremony). So when the investigator went to meet with Maloney, Nordenbrook and Maloney’s top assistant, Larry Urgenson, his pitch for LaMagra was not exactly falling on welcome ears. What everyone recognized from the start was just how peculiar it was that an agent — not an assistant or top aide to Giuliani — was making such a dramatic request days before trial.

Neither was he particularly well prepared. He claims he never looked at the tax returns or any of the other questionable bank submissions, so the fact that LaMagra may have forged the signature of the same accountant as the one named in the Attanasio case went unmentioned. By Lombardi’s own account, he never talked to anyone at Midlantic, or determined whether all disclosure requirements were met, or interviewed the participants at the closing other than Trump’s staff. He was not even sure if LaMagra delivered the cash to Asbury Park — a fact he could’ve easily verified by calling the branch. He says he told them about LaMagra’s allegation about Trump’s participation and Trump’s rebuttal, adding during his Voice interview that LaMagra’s charge “was not truthful” and “was not accurate.” He says he gave Nordenbrook the file of documents he’d gathered and offered to either leave any investigation of the case with them or take it with him to the Southern District.

The Brooklyn prosecutors recall that he was trying to get control of the Trump case, as well as information LaMagra was offering on a couple of other less-prominent matters. (They also believe he had yet to interview Trump, saying it would be “ridiculous” to question the target so prematurely. If they are right, Lombardi’s two trips to Trump’s office after he’d lost LaMagra’s cooperation become even more curious. Was he trying to make a case without LaMagra, or simply flashing one at Trump that he knew was going nowhere?)

Despite Lombardi’s investigative lapses during the meeting in Maloney’s office, he told the Voice he thought he did “a good selling job” and “packaged the whole thing” well, but they rejected it. Maloney sat quietly through most of the discussion, effectively recusing himself and leaving it to Nordenbrook and Urgenson to reject LaMagra’s vague proffer. Lombardi says that a couple of weeks after this session he wrote an internal memo to his supervisors summarizing the findings and making no recommendation for follow-up action. He adds that he also discussed the case with Giuliani and top Giuliani aides like Denny Young and Howard Wilson, insisting: “I’m making a flat-out statement to you that everyone that should have known about this thing knew.”

Lombardi concedes that the case was never given a number, explaining that it was merely “an information item,” too “preliminary” to qualify as an “investigation.” He claims he did report to an assistant on the case, but can’t recall who. A LaMagra source says they tried again later to interest Lombardi in the case but he balked. LaMagra wound up convicted in Brooklyn and Jersey and the usefulness of whatever information he had about Trump died with the statute of limitations in mid 1989. Had the Southern District opened a file on the case, it might eventually have become a matter for review by the New Jersey Division of Gaming Enforcement even if it was closed without any criminal charges (DGE routinely examines formal cases involving casino owners). Lombardi’s low-key and hasty handling of the charges left virtually no paper trail indicating that it had ever existed.

THE TIES THAT BIND

By June 1988, on the heels of the closing of the Trump case, Lombardi had begun a relationship with his onetime subject. He got free tickets to watch two Mike Tyson fights from Trump — one on closed-circuit television at the Plaza Hotel and a second at ringside in Atlantic City. He says both were provided through a long-standing mutual friend of his and Trump’s — insurance broker Neil Walsh. He and Trump sat together in Walsh’s box at Giants Stadium for at least one game, and saw each other another time when Trump actually sat in another nearby box. He met Marla Maples and Ivana Trump. He and Trump also began talking to each other periodically by phone — with Lombardi insisting that the contacts were all law enforcement business involving exchanges of information.

When new U.S. Attorney Otto Obermaier arrived in the Southern District in 1989 (replacing Giuliani protégé Benito Romano, who’d served on an interim basis though most of the election year), Lombardi “started talking to people about options,” and began considering retirement. One of the options then and later — when he actually left the government in 1992 — was Trump. While he reportedly told friends he was talking to Trump about a job, Lombardi claims that he only thought about it. “At one time, it got as far as me talking to someone else to get their advice and I was told it was something I should stay away from,” Lombardi claims. “I just felt I liked the guy and his style. There was never a direct conference or telephone call between he and I.”

The best indication, however, of his continuing ties to Trump involve this reporter. I have known Lombardi for years, and have benefited on occasion from his well-known accessibility to reporters. He conceded in a Voice interview on Saturday that he had omitted any reference to this Trump inquiry in conversations we had in late 1989, when I began work on a Trump biography (Trump: The Deals & The Downfall, HarperCollins, 1992), despite specific questions that might ordinarily have elicited it. In fact, he never mentioned that he knew Trump. These omissions were starkly inconsistent with our relationship at the time. Lombardi only acknowledged the existence of the probe when I learned about it independently in 1991 and did an on-the-record interview with him about it for the book. At that time, Lombardi was evasive. My knowledge of the full scope of the apparent Hopkins swindle and LaMagra cooperation offer was limited, so little reference was made to either in the book.

What was most disturbing was that Trump knew within a matter of days of my 1989 meeting with Lombardi all of the details I’d told him about a very damaging tip I’d picked up involving Trump. Lombardi was the only person I’d mentioned the Trump allegation to (I never established there was any truth to it), yet an outraged, well-informed Trump was telling a lawyer about it right after my meeting with Lombardi. During the interview with Lombardi Saturday, Lombardi adamantly maintained that he did not relay our 1989 conversation to Trump directly or through an intermediary.

He also suggested that the reason he never sought a Trump job was because I’d made his handling of this probe an issue in our earlier interview. “It’s terrible that the option of a job with Trump was taken away from me,” he complained, citing again “the chemistry” he felt with the developer. He said he lost the opportunity “not just for two years” — the usual waiting period for potential hiring conflicts with public officials — “but forever,” adding: “You guys denied me that.”

Lombardi and I have barely spoken since his apparent breach almost four years ago. I am reporting it now partly in the interest of disclosure, so that the reader can consider whether this episode may have prejudiced me against him. But I am also citing it because his unusual, protective response to my 1989 questions about Trump remains a measure to me of just how important Trump had become to him. (In order to lay out the details of my exchanges with Lombardi about Trump, I have indirectly revealed portions of a 1989 conversation that was off the record. Had Lombardi insisted on preserving the confidentiality of that earlier conversation (which in my view he had already violated), and declined to discuss it when I raised it during our recent on-the-record interview, I would have considered not reporting on it here. But he did not. So the account that appears here of what happened between us almost four years ago is drawn from his responses to my questions on Saturday about our prior meeting.)

The Giuliani relationship with Trump faded even before the election. A top Trump staffer at the time, Tony Gliedman, was a heavyweight fundraiser for David Dinkins during the 1989 general election, so Trump, who remained a nominal Giuliani backer to the end, had a foot in each camp. After Trump’s financial problems in 1990, however, the developer drastically changed his involvement in city campaigns, transforming himself into a small-time donor and part-time player. With Dinkins’s support of his truncated West Side project, he has also become a backer of the mayor, albeit a rather muted one, perhaps because his controversial development still has many enemies on the West Side who might otherwise be Dinkins voters.