Judge orders Trump to respond to fraud allegations over IRS lawsuit settlement

A federal judge on Friday ordered President Donald Trump to address allegations that he committed fraud in court in settling his $10 billion lawsuit against the IRS and determine whether the deal was designed to unduly benefit Trump and his allies.

In her order, U.S. District Judge Kathleen Williams cited a motion filed Wednesday by 35 former federal judges asking her to reopen the case and determine whether the settlement “is the product of collusion and itself constitutes a fraud on the Court.” In their court filing, the former judges say Trump and his co-plaintiffs did not mention any proposed settlement in their motion to dismiss the lawsuit against the IRS.

Earlier this month, Trump voluntarily withdrew his civil lawsuit against the IRS, in which he sought $10 billion in damages from the agency over the leak of his past tax returns. Shortly afterward, the Justice Department announced it was creating an “anti-militarization” fund as part of a deal with Trump that established a reserve of nearly $1.8 billion in taxpayer money to compensate people who claim to be victims of government “militarization.” Through an addendum issued the next day, Acting Attorney General Todd Blanche also released Trump, his family and his businesses from any tax liabilities accrued through mid-May.

“The Court was misled,” the former justices wrote in their Wednesday filing, noting that the Justice Department’s settlement was announced shortly after Trump’s lawyers filed a motion to dismiss the lawsuit.

“This ‘settlement’ requisitions the artificial sum of $1.776 billion from the United States Treasury, to distribute to beneficiaries chosen by a commission effectively controlled by the President,” the former judges wrote.

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Carla Herreria

Carla Herreria is a writer for MS NOW’s breaking news and live blog team. She was previously a senior editor at HuffPost.

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