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New York Attorney General Files Fraud Lawsuit Against Donald Trump, His Children And Trump Organization

·4 min read

New York Attorney General Letitia James filed a fraud lawsuit against former President Donald Trump, three of his children and his businesses, claiming that he falsely inflated the value of his net worth to secure more favorable loan and insurance terms.

The lawsuit follows an investigation that stretched more than three years into the Trump Organization finances, as his former attorney Michael Cohen alleged that he routinely inflated the value of his assets.

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“These acts of fraud and misrepresentation grossly inflated Mr. Trump’s personal net worth as reported in the Statements by billions of dollars and conveyed false and misleading impressions to financial counterparties about how the Statements were prepared,” the suit stated. “Mr. Trump and the Trump Organization used these false and misleading Statements repeatedly and persistently to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company, to satisfy continuing loan covenants, and to induce insurers to provide insurance coverage for higher limits and at lower premiums.”

The lawsuit — read it here — was filed shortly before James announced the civil fraud allegations at a press conference, carried on CNN, MSNBC and Fox News. The latter network cut away as James went into greater detail about the litigation.

James also referred potential criminal charges to federal prosecutors in Manhattan and to the Internal Revenue Service.

At the press conference, she alleged a scheme over 10 years to engage in fraudulent practices that benefited the Trumps and the company to the tune of $250 million.

The lawsuit centers on statements of financial condition for Trump from 2011 to 2021 that asserted his net worth. They were personally certified as accurate by Trump or one of his trustees.

“Mr. Trump made known through Mr. Weisselberg that he wanted his net worth on his statements to increase every year, and the statements were the vehicle by which his net worth was fraudulently inflated by billions of dollars year after year,” James said.

She said that “each statement represented that the values were prepared by Mr. Trump and others at the Trump Organization in consultation with ‘professionals,’ however, no outside professionals were retained to prepare any of the asset valuations for the statements.”

Among the examples cited was Mar-a-Lago. James claimed that the property was valued as high as $739 million, based on the premise that the property could be developed and sold for residential use. In fact, she said, “Trump himself signed deeds donating his residential development rights, sharply restricting changes to the property, and limiting the permissible use of the property to a social club.” She said that the club generated annual revenues of less than $25 million and should be valued closer $75 million.

In addition to Trump’s business and trusts, the lawsuit names Donald Trump Jr., Ivanka Trump and Eric Trump.

Also named in the lawsuit was Allen Weisselberg, Trump’s longtime chief financial officer. He pleaded guilty last month to 15 criminal charges related to tax fraud and evasion.

James also alleged fraud surrounding Trump’s development of the Old Post Office Building in Washington, D.C. The lawsuit claims that a $170 million loan was obtained from Deutsche Bank using inflated valuations. A recent sale of the lease netted Trump’s business a $100 million profit, James said.

She said that all told, her office’s investigation showed more than 200 instances of false and misleading valuations on his statements.

Alina Habba, an attorney representing Trump, said in a statement that the lawsuit “is neither focused on the facts nor the law — rather it is solely focused on advancing the Attorney General’s political agenda.” She accused James’ office of exceeding its authority “by prying into transactions where absolutely no wrongdoing has taken place.”

James is seeking to permanently bar Trump, Ivanka Trump and Eric Trump from serving as an officer or director in any New York corporation or similar business, and to prevent the former president and the Trump organization from entering into any real estate acquisitions in the state for five years. She also is seeking payment of the benefits the Trump family accrued from the alleged scheme.

 

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