Greenwich, Connecticut, were fraudulently billed as business expenses. Following the trial, defendant renewed her motion for a Kastigar hearing. The Court reviewed both pre-trial and post-trial submissions, including an affidavit from the Government's lead prosecutor, Assistant U.S. Attorney James DeVita stating that the income tax investigation was based on evidence independent of the immunized testimony or any leads derived therefrom and affirmatively setting forth facts within his knowledge relating to the commencement and conduct of the investigation. Since Special Assistant U.S. Attorney Diane Peress had been designated from the New York State's Attorney General's office to the joint federal and state prosecution team, and had been present during one of Mrs. Helmsley's state grand jury appearances, the Court determined to hear live testimony from DeVita and Peress andto an institution called the St. John of Rila Eastern Orthodox Monastery and received an inflated appraisal of the real estate from an appraiser supplied by the monastery. Harry B. Helmsley was a subject of that investigation because he had made a donation of apparently worthless real estate to the monastery and had taken a $585,000 charitable deduction on his 1984 tax return as a result.
On December 2, 1986, DeVita read an article in The New York Post by Randall Pierson revealing that a "Post investigation" had found that "[m]illions of dollars in renovation bills for Harry Helmsley's Connecticut mansion were falsified as business expenses and charged to his Manhattan office buildings." The article specified various expenses relating to the renovation of Dunellen Hall, the Helmsleys' Connecticut estate,