WASHINGTON - Federal prosecutors have opened an inquiry into a political group linked to billionaire Reid Hoffman to examine its partial payment of legal costs for writer E. Jean Carroll in her lawsuits against former President Donald Trump, a person familiar with the matter said on Thursday.
The probe is being managed out of the U.S. Attorney's Office in Chicago and is centered on possible money laundering and obstruction related to the organization, American Future Republic, the source said. The person spoke on the condition of anonymity because the matter remains under investigation.
American Future Republic contributed to some of Carroll's legal expenses in litigation that resulted in verdicts in Carroll's favor on claims of sexual abuse and defamation. Previously, the same source had said investigators were looking into whether Carroll may have committed perjury about the funding of her suit during a 2022 deposition. The source clarified on Thursday that while the funding is part of what prosecutors are reviewing, Carroll is not a focal point of the investigation.
Reid Hoffman, who co-founded a major professional networking company and is a frequent donor to Democratic causes, responded to the developing probe on Friday. Posting on X, he described what he called "Trump's newest accusation of me is absurdly false." Hoffman added that "Trump hopes that these fraudulent investigations will silence those who stand up to him. He is wrong. I will not bend the knee."
A spokesperson for U.S. Attorney Andrew Boutros in Chicago did not immediately reply to a request for comment on whether the probe was examining Hoffman's group specifically. Earlier in the day, the office issued a statement saying it had not opened a criminal investigation of Carroll.
It was not immediately clear what evidence, if any, prosecutors have developed against American Future Republic. The practice of outside groups providing funding for litigation is common in the United States and is not ordinarily treated as unlawful.
The inquiry comes amid an expanded focus since last year by the Justice Department under President Trump on investigations of individuals and organizations seen as antagonists of the president, with prosecutors bringing criminal charges in some instances.
Carroll successfully pursued two lawsuits against Trump, with courts deciding in 2023 and 2024 that she had been sexually abused by him in a New York department store in the 1990s and later defamed when he denied her allegations. An appeals court addressed the question of potential perjury by Carroll in 2024, concluding that "Ms. Carroll plausibly represented that she had forgotten about the limited outside funding counsel obtained in September 2020 when this question was first posed to her in 2022, and the additional discovery did not indicate otherwise."
In the trial outcomes, a jury in May 2023 found that Trump had sexually assaulted Carroll and defamed her, but did not convict him of rape under New York's legal definition. A separate jury in January 2024 concluded that Trump had defamed Carroll and ordered him to pay $83.3 million in damages. Trump has denied wrongdoing and remains engaged in further legal disputes with Carroll.
According to the source, Acting Attorney General Todd Blanche has recused himself from the department's review of the matter because he previously served as one of Trump's personal attorneys on Carroll's appeals. The source said Blanche's recusal is in place as the investigation moves forward.
At present, specific contours of the Chicago-led inquiry, including its evidentiary basis and potential next steps, are not public. Prosecutors appear to be weighing whether the group's financial involvement in Carroll's legal bills could raise criminal concerns such as money laundering or obstruction, while also assessing prior judicial findings and depositions that touched on the funding question.
This investigation illustrates prosecutors' scrutiny of third-party funding in high-profile litigation and highlights how such funding arrangements can attract legal review when connected to politically sensitive cases. For now, the probe is focused on the mechanics of the funding and the group's role, rather than on Carroll herself, the source said.