Trump redefines fraud in quest to crush "Deep State"
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Bruised by years of civil suits, criminal charges and a historic felony fraud conviction, President Trump is using his second term to delegitimize the very concept of white-collar crime.
Why it matters: Trump's belief that he was a victim of "lawfare" has tainted his view of the justice system. Paired with his crusade to crush the "Deep State" regulatory complex, Trump could enable a golden age of financial fraud, ethics watchdogs fear.
The big picture: At an institutional level, Trump's administration has moved swiftly in its first 80 days to narrow the government's mandate for enforcing fraud.
- In early February, Trump and Elon Musk's DOGE team effectively shut down the Consumer Financial Protection Bureau, the post-recession agency created to protect Americans from predatory financial practices.
- Trump then paused enforcement of the Foreign Corrupt Practices Act, claiming the 1977 anti-bribery statute had been "stretched beyond proper bounds" and was hurting U.S. companies' ability to compete overseas.
- In March, Trump fired two Democrats from the Federal Trade Commission, taking aim at one of the government's top watchdogs for corporate fraud, consumer deception and antitrust violations.
By the numbers: The administration has paused, dropped or withdrawn enforcement actions against at least 100 corporations accused of misconduct, according to the progressive watchdog group Public Citizen.
Zoom in: On an individual level, Trump has used his clemency powers and influence to rehabilitate disgraced businessmen and politicians — turning fraud convictions and indictments into badges of loyalty.
- Eric Adams: The Justice Department dropped its corruption charges against the New York City mayor, claiming the case would interfere with his ability to cooperate with Trump's deportation agenda.
- Trevor Milton: Trump issued a full pardon to the Nikola electric vehicle founder, who was convicted of defrauding investors and later donated $1.8 million to help Trump's campaign.
- Carlos Watson: Trump commuted the Ozy Media founder's nearly 10-year prison sentence, which he was set to begin after his conviction for deceiving investors about his company's financials.
- Bitmex: The three co-founders and a former employee of the crypto exchange were granted pardons after pleading guilty to violating the Bank Secrecy Act.
- Devon Archer and Jason Galanis: The two former Hunter Biden associates — who were convicted of defrauding a Native American tribe — received clemency after cooperating in GOP investigations into the former president's son.
- Rod Blagojevich: After commuting his sentence in 2020, Trump granted a full pardon to the former Illinois governor, who was convicted of trying to sell Barack Obama's former Senate seat.
Between the lines: The crypto industry, where Trump's family has deep financial interests, has benefitted enormously from the president's vow to end the regulatory "war" waged by the Biden administration.
- The Justice Department this week disbanded its National Cryptocurrency Enforcement Team and accused the Biden administration of "a reckless strategy of regulation by prosecution."
- Justin Sun, a Chinese crypto mogul who was charged by the SEC with fraud and market manipulation, had his case paused after buying $75 million worth of tokens tied to a Trump-backed crypto venture.
- Democrats have expressed outrage over Trump's release of his own meme coin, which initially soared in value — then plummeted, wiping away gains for hundreds of thousands of people who invested.
What they're saying: "President Trump will always stand for law and order, ending the weaponization of the legal system, and rooting out fraud in the federal government," White House spokesperson Harrison Fields said.
- "Every action he has taken in his second term reflects these priorities and is authorized by the Constitution," Fields added. "Ethics watchdogs that ignored the previous administration's egregious legal abuses against President Trump have no credibility today."
The bottom line: For Trump, the concept of "fraud" has become less a legal violation than a political label — one he applies freely to his enemies and erases for his allies.
- As part of Elon Musk's campaign to cut government spending, he and Trump repeatedly have claimed, without evidence, that Democrats are profiting from the alleged "fraud" uncovered by DOGE.
- For years, Trump also has insisted, again without evidence, that voter fraud is rampant. This week he ordered an investigation into former U.S. cybersecurity chief Chris Krebs for stating the 2020 election was secure.
- "He's the fraud." Trump declared. "He's a disgrace."
