Former President Donald Trump, three of his adult children, and his corporation were accused of engaging in a decade-long plot to fraudulently value their assets, which resulted in $250 million in ill-gotten riches, according to the New York attorney general. The lawsuit follows a multi-year probe into the business activities of the former president and his firm.
Ms. Letitia James, a Democrat, did not rule out the prospect of the two parties reaching an agreement at her news conference, but she did not explain what type of terms she would require. She also stated that her office had previously rejected settlement proposals from Mr. Trump’s team. “Our doors are always open,” she assured them.
Clearly, Ms. James is willing to settle for the right amount.
Mr. Trump’s financial records from 2011 to 2021, according to James, a Democrat and prominent critic of Mr. Trump, featured 200 inaccurate and misleading assessments across 23 properties and assets, including residential buildings, golf clubs, and the family’s Mar-a-Lago resort in Florida. According to the lawsuit, the Trump Organization offered false representations to insurers and lenders in exchange for advantageous terms and other perks.
The case shows that Donald Trump falsely exaggerated his net worth by billions of dollars to unfairly benefit himself and deceive the system, Ms. James stated at a news conference.
While the action is civil, it contends that the defendants broke state criminal statutes and perhaps federal ones, such as those prohibiting bank fraud and submitting false information to financial institutions. The agency is referring its findings for the prosecution to the United States Attorney’s Office for the Southern District of New York, said Ms. James. According to a spokeswoman, the office was aware of the referral.
In a social media post, Mr. Trump, a Republican, labeled the investigation a witch hunt. Alina Habba, one of his lawyers, claimed the lawsuit’s assertions were without validity. According to a Trump Organization spokesperson, the lawsuit is the culmination of over three years of unrelenting, targeted, unethical political harassment.
The complaint comes after a more than three-year probe launched by Michael Cohen, Mr. Trump’s former personal lawyer, who told senators in 2019 that the then-president often exaggerated his wealth for financial advantage. Mr. Trump has frequently attempted, but failed, to prevent or postpone the inquiry. Earlier this year, he was held in contempt in state court for failing to comply with one of Ms. James’s subpoenas. During his deposition in August, he invoked his Fifth Amendment privilege against self-incrimination.
Ms. James’ claim also lists Donald Trump Jr., Eric Trump, and Ivanka Trump, as well as two longstanding corporate employees, Allen Weisselberg and Jeffrey McConney, as named defendants.
According to Donald Trump Jr, Ms. James was desperately attempting to whip up her leftwing constituency. On Twitter, Eric Trump accused Ms. James of being politically motivated. Mr. Weisselberg’s counsel declined to comment.
The action demands the cancellation of New York business certificates for Mr. Trump’s enterprises that engaged in the alleged scam and the corporate organizations identified as defendants. Ms. James also stated that she intends to permanently restrict the Trumps from acting as an officer of any New York firm. She also wants to prohibit Mr. Trump and his company from making any commercial real-estate purchases in the state for a period of five years. She is requesting a $250 million fine and the establishment of an independent monitor for the Trump Organization.
The action filed on Wednesday adds to Mr. Trump’s legal woes; who is battling the Justice Department over an investigation into his handling of classified information after leaving the White House.
Ms. James’ complaint claimed that financial records were falsified at Trump assets ranging from a golf resort in Scotland to the Manhattan office skyscraper 40 Wall St. to Seven Springs, an estate north of New York City.
According to the complaint, the inflated asset assessments in the representations cannot be dismissed or excused as the consequence of exaggeration or good faith estimation about which reasonable real estate professionals may vary. Rather, they are the product of the defendants making objectively wrong assumptions and employing the incorrect methodology.
Mr. Trump’s financial statements, created by Trump Organization officials and released by an accounting firm, said they were prepared in cooperation with independent specialists. Still, the complaint claimed no such experts were recruited to prepare asset assessments. Ms. James claimed the papers stated cash on hand that Mr. Trump did not have, altered accounting techniques from year to year, and ignored property-value constraints.
According to the lawsuit, Mr. Trump’s triplex unit in Trump Tower was determined to be 30,000 square feet when it was only 10,996 square feet. Ms. James called the resulting estimate of $327 million in 2015 “absurd,” noting that just one New York City apartment had sold for more than $100 million at the time.
A bank-ordered assessment evaluated 12 rent-stabilized units at $750,000 total at Trump Park Avenue, a residential complex. Still, according to the claim, those units were appraised at the market rate for approximately $50 million.
The case also claimed that the worth of Mar-a-Lago was assessed as if it were unrestricted property, even though Mr. Trump granted residential development rights. According to the claim, the Trumps overpaid for the Florida property, which should have been valued at $75 million.
Eric Trump slammed the $75 million estimate on Twitter, calling Mar-a-Lago probably one of the most expensive properties in the United States. According to Ms. James, the claimed bogus property assessments pushed banks to lend money on better conditions than they would have otherwise and insurers to give coverage with bigger limits and lower rates.
According to a Trump Organization spokesperson, banks “profited handsomely”—to the tune of hundreds of millions of dollars in interest and fees—and never once took issue with any of the loans in question.
Ms. James’ civil inquiry is separate from a criminal investigation conducted by the Manhattan district attorney’s office into identical alleged conduct. Two prominent prosecutors resigned from the inquiry earlier this year, casting doubt on the investigation’s viability. According to a spokesman for the office, the inquiry is still underway.
An offshoot of that investigation, a tax-fraud case against the Trump Organization, is set to go to trial in October. The business has entered a not guilty plea.
Mr. Weisselberg, the company’s former chief financial officer, is also a defendant in that action. Last month, he pled guilty to a 15-count indictment and admitted to a multi-year tax evasion plan. He is compelled to testify in the Trump Organization’s trial as part of his plea agreement. In that case, Donald Trump is not a defendant.