The New York State Attorney General on Wednesday filed a sweeping lawsuit against former President Donald Trump, his three adult children and the Trump Organization, alleging they were involved in a massive fraud that lasted more than a decade in which the former president used These frauds to enrich themselves.
In the more than 200-page lawsuit, Attorney General Letitia James, a Democrat, alleges that the fraud involved every aspect of Trump’s business, including his properties and golf courses. According to the lawsuit, the Trump Organization defrauded lenders, insurance companies and tax authorities by inflating the value of its properties through misleading assessments.
“This behavior cannot be ignored and seen as some kind of well-intentioned mistake,” James said at a news conference in New York.
“The statement of financial condition is greatly exaggerated, grossly exaggerated, objectively false and therefore fraudulent and illegal,” she added. “So we are seeking relief, Mr. Trump, the Trump Organization, his family — they should all be held accountable.”
Trump and his children Donald Trump Jr., Eric Trump and Ivanka Trump are named as defendants in the lawsuit. Former Trump Organization chief financial officer Alan Weisselberg and another longtime company executive, Jeff McConney, were also nominated.
James said she believes there may be a violation of state and criminal law and referred the matter to the U.S. Attorney’s Office for the Southern District of New York and the IRS.
The U.S. Attorney’s Office declined to comment.
“These acts of fraud and misrepresentation are similar in nature and are part of a concerted effort by Trump Organization executives for each annual statement and approved at the highest levels of the Trump Organization — including Mr. Trump.” Trump himself,” the lawsuit said.
As part of the lawsuit, James is seeking $250 million in allegedly illegally obtained funds and permanently bar Trump and the children named in the lawsuit from serving as directors of businesses registered in New York state. She also sought to cancel the Trump Organization’s corporate certificate, which, if approved by a judge, could effectively force the company to cease operations in New York state.
Maggie Haberman breaks up NY AG lawsuit against Trump
Trump, who previously called James a “traitor prosecutor,” said he was on a “vindictive and selfish fishing expedition.” The Trump Organization has previously called her allegations “baseless” and denied any wrongdoing.
In response to Wednesday’s announcement, Trump attorney Alina Haba said in a statement to CNN: “Today’s document focuses neither on the facts nor the law — but simply advancing the Attorney General’s political agenda. It is clear that the Attorney General’s Office has gone beyond its statutory authority to snoop on transactions where absolutely no wrongdoing occurred.”
Weisselberg’s attorney, Nicholas Gravante, declined to comment.
The civil lawsuit comes as Trump faces mounting legal pressure as prosecutors move closer to his inner circle.
Trump is facing multiple criminal investigations by federal and state prosecutors over the accuracy of his company’s financial statements, interference in the 2020 presidential election and his handling of classified documents after he leaves office. Trump has denied any wrongdoing.
James alleges the former president and his company made “substantial fraudulent, false and misleading representations” over a 10-year period, the lawsuit says, in particular highlighting “200 false and misleading representations of alleged Trump assets” Valuation”.
“The relevant financial statements are released annually; each contains substantial fraudulent, false, and misleading statements about Trump Organization assets; and most played a role in specific transactions with financial institutions,” the lawsuit states.
“The magnitude of the massive inflated asset value is staggering,” the lawsuit added.
According to James, Trump’s businesses prepare annual statements of financial condition to file with banks and other financial institutions. James said the statements showed the financial health of Trump businesses and would be relied upon if the Trump Organization wanted to apply for a loan.
James told reporters Wednesday that each statement was personally authenticated by Donald Trump, Donald Trump Jr. or Weisselberg.
Trump “let people know” that “he wants his net worth to be reflected in these statements,” James said, “that is Mr. Trump’s wish. Year after year, Weisselberg and others fraudulently prepare these statement.”
As an example of allegations that Trump inflated valuations to increase his own profits. James highlighted what she said happened at 40 Wall Street, the property known as Trump Tower in New York City’s financial district, cited dozens of times in the lawsuit.
Trump’s company assessed the property in 2010 and 2012 and found it to be worth $200 million and $220 million, respectively, the lawsuit said. But Trump’s company has repeatedly claimed the property is worth much more in its official financial statements, the lawsuit says.
In 2011, Trump’s company said the property was worth $524 million. According to the lawsuit, which he said was worth $527 million in 2012 and $530 million in 2013, the lawsuit argues that these inflated valuations have no valid basis and that Trump falsely claims the figures are from “professionals.”
At a news conference Wednesday, James also said Trump had inflated the size of his Trump Tower three-story apartment to misrepresent the value of more than $300 million.
“Mr. Trump says his apartment is over 30,000 square feet, which is the basis for evaluating the apartment. In fact, the apartment is less than 11,000 square feet, which makes Mr. Trump well aware,” James Say.
She added: “Based on inflated square footage, the condo was valued at $327 million in 2015 and 2016. To date, a New York City condo has never sold for anywhere near that price.”
The announcement is the latest in a three-year investigation into the Trump Organization’s finances led by James.
In January, James’ office said it found “material” evidence that the Trump Organization used false or misleading asset valuations in its financial statements to obtain loans, insurance and tax benefits. The following month, Trump’s longtime accounting firm resigned.
James launched her investigation in 2019 after Trump’s former mediator and personal attorney Michael Cohen testified before Congress that Trump inflated the value of some assets for loans and insurance and undervalued others for tax benefits .
In addition to the new fraud lawsuit, the Trump Organization will go on trial next month alleging its involvement in a 15-year tax fraud scheme, and its longtime CFO has agreed to testify against the company .
Weisselberg, the Trump Organization’s chief financial officer for decades, admitted in August to his role in a 15-year tax fraud scheme, and as part of the deal Trump’s real estate firm testified. in trial.
In recent weeks, the Trump Organization has offered a settlement to block the lawsuit, and even though they have denied any wrongdoing, James’ office has made it clear that it is not interested in a deal, people familiar with the matter said.
Eric Trump, Ivanka Trump and Donald Trump Jr. The lawsuit alleges that there was “intentional participation” in the alleged fraudulent scheme.
The alleged plan “requires the involvement of Mr. Trump and his children,” the lawsuit said, adding that the children “understand the true financial performance of the company.”
For example, the lawsuit alleges that Eric Trump was involved in a method of valuing Las Vegas properties that reduced their tax value while inflating the value of Trump’s financial statements.
It also cited testimony from Trump Jr. Because it describes how the value of Trump’s Park Avenue is inflated by Trump’s financial statements. According to James’ complaint, an outside firm’s 2010 loan appraisal of the property took into account how some units stabilized rents, reducing their value. However, Trump’s financial statements valued the units at roughly six times what the appraiser concluded, the lawsuit said.
The lawsuit alleges that Ivanka Trump was involved in a 2012 loan to buy a golf course in Doral, Fla., and a property in Chicago — part of the reason James alleges the loan was extended because financial statements allegedly contained false statements.
“In every transaction with Deutsche Bank, Ms. Trump knew that those transactions included personal guarantees from Trump. Trump asked him to provide an annual statement of financial condition and certification,” the lawsuit states.
In April, following a protracted legal battle to enforce subpoenas for testimony from Trump and his adult children, attorneys in James’ office said their investigation was nearing completion and that testimony from the Trumps was needed to make a decision.
Last month, Trump did not answer questions and advocated his Fifth Amendment right against self-incrimination when he was removed from office by the attorney general’s office. Eric Trump, who runs the company every day, also invoked his Fifth Amendment rights in 2020, answering more than 500 questions.
With Trump and Eric Trump refusing to answer questions, the jury could draw “adverse inferences” about their failure to answer questions if the case goes to trial. If they are found responsible, this could lead to a higher judgment on them or the company.
Ivanka Trump and Trump Jr. Both answered questions during the more than seven-hour interview, sources told CNN.
James noted that Trump and Weisselberg invoked their Fifth Amendment privileges during the news conference.
“When asked under oath whether, Mr. Trump, Mr. Trump continued to review and approve these statements after taking office in 2017. Trump again invoked his Fifth Amendment privilege and declined to answer,” James said Wednesday.
This story has been updated with more details.