Years after Donald Trump's last day in office as President of the United States, his legal and public reckoning is still underway, recently underscored by warrants against him for nuclear documents. This week, New York Attorney General Letitia James filed a $250 million lawsuit against the business tycoon; his children Eric, Ivanka, and Donald Jr.; and the Trump Organization on the charge of "staggering" fraud in the family real estate business.
James' office uncovered potential criminal violations during a three-year investigation, which covers crimes such as conspiracy, bank fraud, falsifying business records, insurance fraud, and issuing false financial statement. The 220-page civil suit was filed in the Manhattan Supreme Court and accuses the former president and his company of wrongfully inflating his prized assets, such as golf courses and residences, to gain favorable tax benefits and loans.
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“Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself, and cheat the system, thereby cheating all of us,” said the Attorney General during a press conference. “Claiming you have money that you do not have does not amount to the art of the deal, it’s the art of the steal,” she stated, which is a reference to Trump's book from 1987.
Should the lawsuit be successful, it would render Trump unable to run a business in New York or to buy commercial real estate for the next five years, whether personally or through his company. While James' probe is civil and therefore cannot bring criminal charges, her office is referring the case to the Internal Revenue Service and to federal prosecutors in New York's Southern District.
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Ex-Trump Organization CFO Allen Weisselberg is also implicated in this suit, which alleges that defendants “engaged in numerous acts of fraud and misrepresentation in the preparation of Mr. Trump’s annual statements of financial condition … covering at least the years 2011 through 2021.”
According to James, the defendants made at least 200 false or misleading inflations of assets that resulted in profits of at least $250 million. These claims were made in Trump's "Statements of Financial Condition" given to organizations like Cushman & Wakefield, Deutsche Bank, and Mazars Group for loan applications and insurance purposes, and led readers to believe Trump was making billions more than he was.
“Each statement was personally certified as accurate by Mr. Trump or by one of his trustees,” James claimed. As an example of overvaluing his properties, lying about how much cash he had on hand, and ignoring legal restrictions on development rights, James cites Trump's 40 Wall Street property. He valued it at $530 million in 2013, with it actually being appraised at $220 million in 2012 according to court documents. He also exaggerated the Trump Tower triplex's square footage by 20,000 square feet, making the apartment value at a never-before-seen-in-New-York price of $327 million.
James also claimed that the Trump Organization lowered its federal tax obligations through this scheme. For example, Eric Trump worked with an outside tax council to receive federal tax deductions by fulfilling a conservation easement donation when developing the Seven Springs estate in Westchester County in 2011. When asked about the easement donation, Eric invoked the Fifth Amendment, which fraudulently reduced his tax obligation by more than $3.5 million.
Ivanka and Donald Jr. were added to the case around 2020, and all three children have been executives in the company. They, along with their father, have unsuccessfully appeared for depositions, with Trump himself refusing to answer questions under Fifth Amendment rights.
Trump's children (left to right): Ivanka, Eric, Donald Jr., and Tiffany - Chip Somodevilla/Getty Images
Trump's team has responded with hostility to these claims. Trump lawyer Alina Habba told The Post that James' case "is neither focused on the facts nor the law — rather, it is solely focused on advancing the Attorney General’s political agenda.”
“It is abundantly clear that the Attorney General’s Office has exceeded its statutory authority by prying into transactions where absolutely no wrongdoing has taken place,” she continued. “We are confident that our judicial system will not stand for this unchecked abuse of authority, and we look forward to defending our client against each and every one of the Attorney General’s meritless claims.”
Trump called James' lawsuit a "witch hunt" on the Truth Social platform, with his former attorney general Bill Barr dismissing it as a "political hit job" as well. He told Fox News that he believes this case will garner sympathy for Trump, as it's just another example of "Trump derangement syndrome," and that James does not have enough evidence to bring a criminal case forth. "I don't think it's going to go any further," he expressed.
These wrongdoings merely "scratch the surface of the misconduct," James said. Other restrictions that the New York Attorney General's Office seeks to impose are a permanent ban from directorship of any local company for Trump and his three involved children. In addition to coughing up $250 million to reverse fraudulent profits, she wants to bar Weisselberg and Jeffrey McConney, Trump Organization controller, from having financial control of any New York company. Finally, she wishes for an independent monitor to provide oversight for the next five years, as well as audited annual financial statements of Trump's net worth to be distributed to companies that previously received statements of his financial condition. All these restrictions must be approved by a judge before they are put into effect.
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James began investigating the company in 2019, after Trump's ex-personal lawyer Michael Cohen made some of these claims to Congress. She filed suit in 2020 based on claims that Eric Trump and the company were stonewalling the investigation. The AG office has also rejected at least one settlement offer from Trump's team, stating Wednesday to reporters that they "rejected settlement offers that they submitted and [their] doors are always open." A spokesperson for the US Attorney for the Southern District of New York also said Wednesday that they were aware of the suit, but provided no further comments.
This lawsuit follows Trump's legal woes in Florida's Mar-a-Lago resort, which FBI officials raided on August 8th to determine whether he was unlawfully hiding classified legal documents. While he's claimed that the documents were declassified before they were moved, Trump lawyers were in Brooklyn federal court on Tuesday as Judge Raymond Dearie determines which of the 11,000 documents seized could warrant attorney-client or executive privilege.
The Trump Organization will also face trial next month for tax fraud charges, where Weisselberg is scheduled to testify against the company as part of a plea deal with the Manhattan District Attorney's Office. Manhattan DA Alvin Bragg, in response to James' suit, said that their criminal investigation is "active and ongoing," as officials determine whether the organization helped top executives downplay their government compensations for 15 years in order to avoid income taxes. Trump is not personally charged in that suit.
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