CNN
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New York State Attorney General filed a major lawsuit on Wednesday Former President Donald Trump has filed a lawsuit against his three adult children and the Trump Organization, alleging that the former president engaged in more than a decade of fraud to enrich himself.
In a more than 200-page lawsuit, Attorney General Letitia James, a Democrat, alleged that the fraud touched all aspects of Trump’s business, including properties and golf courses. According to the lawsuit, the Trump Organization defrauded lenders, insurers and tax authorities and used false appraisals to inflate the value of his properties.
“This behavior cannot be brushed aside and dismissed as some kind of good-faith mistake,” James said at a news conference in New York.
“The financial position statements are exaggerated, grossly inflated, objectively false and therefore fraudulent and illegal,” he added. “We’re seeking relief as a result, and holding Mr. Trump, the Trump Organization, his family — all of them accountable.”
Trump and his children, Donald Trump Jr., Eric Trump and Ivanka Trump, are named as defendants in the suit. Alan WeiselbergAlso named is Jeff McConney, a former CFO for the Trump Organization and another longtime corporate executive.
James said he believes state and criminal laws may have been violated and has referred the matter to the U.S. Attorney’s Office for the Southern District of New York and the Internal Revenue Service.
The US attorney’s office declined to comment.
“These acts of fraud and misrepresentation were similar in nature, were committed by senior management of the Trump Organization as part of a common effort for each annual report, and were approved at the highest levels of the Trump Organization — including Mr. Trump himself,” the lawsuit states.
As part of the lawsuit, James is seeking $250 million in alleged ill-gotten gains and permanently barring Trump and the children named in the lawsuit from serving as directors of a business registered in New York State. He is seeking to revoke the Trump Organization’s corporate certificate, which, if granted by a judge, could effectively force the company to cease operating in New York state.
Trump previously called James a “traitor prosecutor” who is on a “vindictive and self-serving fishing spree.” The Trump Organization has called his previous allegations “baseless” and denied any wrongdoing.
Responding to Wednesday’s announcement, Trump attorney Alina Huba said in a statement to CNN: “Today’s filing does not focus on the facts or the law — rather, it focuses solely on advancing the attorney general’s political agenda. The attorney general’s office has exceeded its statutory authority and engaged in transactions where there was no wrongdoing. It seems obvious.
Weiselberg’s attorney, Nicholas Gravante, declined to comment.
The civil suit comes as Trump steps up legal pressure as prosecutors take investigative steps and move closer to his inner circle.
Trump faces multiple criminal investigations from federal and state prosecutors, including the accuracy of his company’s financial statements, interference in the 2020 presidential election and the handling of classified documents after leaving office. Trump has denied any wrongdoing.
James alleges the former president and his company made “numerous fraudulent, false and misleading representations” over a 10-year period, according to the lawsuit, which specifically referred to “200 false and misleading valuations” of Trump’s assets.
“The financial statements in question were published annually; Each contained a substantial number of fraudulent, false, and misleading representations about assets of the Trump Organization; And the majority participated in certain transactions with financial institutions,” the lawsuit alleges.
“The number of grossly inflated property values is staggering,” the suit adds.
According to James, Trump’s businesses prepared financial statements to submit to banks and other financial institutions each year. The reports show the financial health of Trump businesses, James said, and the Trump Organization relies on if it wants to apply for loans.
James told reporters Wednesday that each statement was personally certified as accurate by either Donald Trump, Donald Trump Jr. or Weiselberg.
“He wanted his net worth inflated on those statements,” James said, adding that “Mr. Weiselberg and others were accomplished year after year in fraudulently preparing those statements.”
As an example of the allegations, Trump inflated ratings to increase his own profits. James cited what happened at 40 Wall Street, a property in New York City’s financial district known as the Trump Building, which is mentioned dozens of times in the lawsuit.
Trump’s company received appraisals for the property in 2010 and 2012, which were found to be worth $200 million and $220 million, respectively, according to the lawsuit. But Trump’s company has repeatedly said in its official financial statements that the property is worth more.
In 2011, Trump’s company reported assets worth $524 million. He claimed it was worth $527 million in 2012 and $530 million in 2013, according to the lawsuit, arguing that these inflated estimates had no valid basis and that Trump falsely claimed the numbers came from “professionals.”
James also said during Wednesday’s news conference that Trump inflated the square footage of his Trump Tower triplex apartment and misrepresented the value by more than $300 million.
“Mr. Trump represented that his apartments were over 30,000 square feet, which is the basis for appraising the residence. In fact, the apartment was less than 11,000 square feet, something Mr. Trump was well aware of,” James said.
He added: “Based on that elevated square footage, the apartment value in 2015 was $327 million in 2016. To date, no apartment in New York City has sold for such a sum.
The announcement is the latest development in a three-year investigation led by James into Trump Organization finances.
In January, James’ office said it had found “substantial” evidence indicating the Trump Organization used false or misleading property valuations in its financial statements to obtain loans, insurance and tax benefits. The following month, Trump’s longtime accounting firm resigned.
Trump’s former fixer and personal attorney, Michael Cohen, began his investigation in 2019 by testifying before Congress that Trump inflated the value of some properties to get loans and insurance and understated others to get tax breaks.
In addition to the new fraud case, the Trump Organization goes on trial next month for alleged involvement in a 15-year tax fraud scheme and its longtime chief financial officer has agreed to testify against the company.
Weiselberg served as the Trump Organization’s chief financial officer for decades. He confessed to the crime In August, he agreed to testify against Trump’s real estate company as part of a plea deal for his role in a 15-year tax fraud scheme.
In recent weeks, the Trump Organization has denied any wrongdoing and offered to block the lawsuit, but James’ office has made clear it is not interested in a deal, people familiar with the matter said.
In April, after a lengthy legal battle to subpoena statements from Trump and his adult children, lawyers from James’ office said the investigation was nearing completion and needed Trump’s testimony before making a decision.
Last month, Trump did not answer questions and asserted his Fifth Amendment right against self-incrimination when he was impeached by the attorney general’s office. Eric Trump, who runs the business on a day-to-day basis, responded to more than 500 questions in 2020 about his fifth amendment act.
Because Trump and Eric Trump refused to answer questions, if the case goes to trial, a jury could draw an “adverse inference” against them for not answering questions. If they are found liable it can result in a higher judgment against them or the company.
Both Ivanka Trump and Trump Jr. answered questions during the interview, which lasted more than seven hours, sources told CNN.
James noted that Trump and Weiselberg invoked their Fifth Amendment privilege during his news conference.
“After he became President of the United States in 2017, Mr. Trump repeatedly invoked his Fifth Amendment privilege and refused to answer when asked under oath whether he had reviewed and approved the statements,” James said Wednesday.
This story has been updated with additional details.
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