'Premised on deception': Judge reopens major Trump case in stunning blow to slush fund

A federal judge waylaid Donald Trump's legal team Friday by reopening his $10 billion IRS lawsuit, declaring she wants to investigate "grievous allegations" that the deal to settle it was "premised on deception," The New York Times reported.

In what the Times called a "striking turnabout," U.S. District Judge Kathleen Williams revived the case just days after she had closed it. The Obama appointee said she wants to scrutinize the circumstances surrounding Trump's effort to settle the suit in a way that benefited him, his family, and his political allies — including the controversial $1.776 billion "anti-weaponization fund" that critics have blasted as a slush fund.

Williams ordered Trump's lawyers to respond by June 12 to two damning questions: whether "the court was the victim of a fraud," and whether the president colluded with his own government to settle the case "to avoid judicial scrutiny."

The ruling came in response to a bipartisan filing from 35 former federal judges earlier this week. The retired judges argued Trump improperly used the IRS suit to dole out taxpayer money "without constitutional or congressional authority" and to obtain "unlawful private benefits" for his family, including permanent immunity from tax audits.

If Williams proceeds, top Justice Department officials could face hard questions — including acting Attorney General Todd Blanche, who signed the audit shield, and Stanley Woodward Jr., the No. 3 DOJ official who signed the fund agreement.

The ruling adds to a wave of legal challenges the fund faces. A judge in Virginia previously blocked the administration from disbursing money from it.