Federal investigators examined Trump Media for possible money laundering, sources say

Towards the end of last year, federal prosecutors started examining two loans totaling $8m wired to Trump Media, through the Caribbean, from two obscure entities that both appear to be controlled in part by the relation of an ally of Russian president Vladimir Putin, the sources said.

The expanded nature of the criminal investigation, which has not been previously reported, threatens to delay the completion of the merger between Trump Media and DWAC, which would provide the company and Truth Social with up to $1.3bn in capital, in addition to a stock market listing.

The extent of the exposure for Trump Media and its officers for money laundering remains unclear. The statutes broadly require prosecutors to show that defendants knew the money was the proceeds of some form of unlawful activity and the transaction was designed to conceal its source.

But money laundering prosecutions are typically based on circumstantial evidence and can be based on materials that show that the money in question was unlikely to have legitimate origins, legal experts said.

But the money was never returned, Wilkerson said, in part because losing $8m out of the roughly $12m cash that Trump Media had in its accounts at that time would have placed significant stress on its financial situation.Prosecutors appear to have also taken a special interest in the payments because the off-shore Paxum Bank has a history of providing banking services for the pornography and sex worker industries, which makes it higher risk of engaging in money laundering and other illicit financing.

As a private company arranging private loans, the obligations for Trump Media to vet the financing under the SEC rules are less clear. But the securities regulations are separate to the US criminal money laundering statutes, which apply universally.

A spokesman for Don Jr declined to comment. Orlando, Nunes, Patel and Juhan did not respond to requests for comment.

Trump was the chairman of Trump Media at the time, though it was unclear whether he was aware of the opaque nature of the two loans. Trump typically did not seem to be particularly interested in managing the day-to-day running of Trump Media, Wilkerson said.

But Trump was interested in the deal, Wilkerson said, because he got to own 90% of the shares without putting any money into the company. According to one source familiar with the matter, however, Trump invested some money into DWAC, which could allow him to cash out twice in the event the merger was consummated.