New York’s attorney general filed a sweeping lawsuit Wednesday against former President Donald Trump, three of his grown children and the Trump Organization, alleging they were involved in a sprawling more than decade-long fraud that the former president used to enrich himself.
In the more than 200-page lawsuit, Attorney General Letitia James, a Democrat, alleges the fraud touched all aspects of the Trump business, including real estate and golf courses. According to the lawsuit, the Trump Organization defrauded lenders, insurers and tax authorities by inflating the value of its properties using misleading valuations.
“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 statements of financial condition were grossly exaggerated, inflated, objectively false and therefore fraudulent and illegal,” he added. “And as a result of that, we’re seeking relief, and 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 suit. Allen Weisselberg, a former CFO for the Trump Organization, and Jeff McConney, another longtime company executive, are also named.
James said she believes state and criminal laws may have been violated and 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 of a similar nature, committed by senior management at the Trump Organization as part of a joint effort for each annual statement, and 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 illicit funds and to permanently bar Trump and the children named in the lawsuit from serving as a director of a business incorporated in New York state. It also seeks to revoke the Trump Organization’s corporate certificate, which, if granted by a judge, could effectively force the company to cease operations in New York state.
Trump previously called James a “renegade prosecutor,” who he said runs a “vindictive and self-serving fishing expedition.” The Trump Organization called her previous claims “baseless” and denied any wrongdoing.
In response to Wednesday’s announcement, Trump attorney Alina Haba said in a statement to CNN: “Today’s filing focuses on neither the facts nor the law — rather, it focuses solely on advancing the Attorney General’s political agenda. It is abundantly clear that the Attorney General’s Office has exceeded its legal authority by investigating transactions where absolutely no illegal action has taken place.”
Weisselberg’s attorney, Nicholas Gravante, declined to comment.
The civil suit comes as Trump comes under increasing legal pressure as prosecutors take investigative steps closer to his inner circle.
Trump faces numerous criminal investigations by federal and state prosecutors into the accuracy of his company’s financial statements, interference in the 2020 presidential election and his handling of classified documents after leaving office. Trump has denied any wrongdoing.
James alleges the former President and his company made “dozens of fraudulent, false and misleading statements” over a 10-year period, according to the lawsuit, which specifically highlighted what it called “200 false and misleading valuations” of his assets Trump.
“These financial statements were issued annually. each contained a substantial number of fraudulent, false and misleading statements about many of the assets of the Trump Organization. and most played a role in specific transactions with financial institutions,” the lawsuit states.
“The number of grossly inflated asset values is staggering,” the lawsuit adds.
According to James, Trump’s businesses prepared financial statements each year to submit to banks and other financial institutions. The statements showed the financial position of the Trump businesses, James said, and were relied upon if the Trump Organization wanted to apply for loans.
Each statement was personally certified as accurate by Donald Trump, Donald Trump Jr. or Weiselberg, James told reporters Wednesday.
Trump “made it known” that he “wanted his net worth reflected in these statements to increase,” James said, “a desire that Mr. Weiselberg and others carried out year after year in the fraudulent preparation of these statements.”
As an example of claims, Trump inflated valuations to increase his own profits. James highlighted what she says happened to 40 Wall Street, a property known as The Trump Building in New York’s financial district, which is mentioned dozens of times in the lawsuit.
Trump’s company obtained appraisals for the property in 2010 and 2012, which found it to be worth $200 million and $220 million, respectively, according to the suit. But Trump’s company repeatedly claimed the property was worth much more on its official financial statements, according to the lawsuit.
In 2011, Trump’s company said the property was worth $524 million. He said he was worth $527 million in 2012 and $530 million in 2013, according to the lawsuit, which argued there was no valid basis for those inflated valuations and that Trump falsely claimed those numbers came from “professionals.”
During Wednesday’s press conference, James also said Trump inflated the square footage of his triplex apartment in Trump Tower to falsify the value to more than $300 million.
“Mr. Trump claimed that his apartments were more than 30,000 square feet, which was the basis for the apartment’s valuation. In fact, the apartment was less than 11,000 square feet, which Mr. Trump was well aware of James said.
He added: “Based on this inflated square footage, the value of the apartment in 2015, 2016, was $327 million. To date, no apartment in New York has ever sold for anywhere near that amount.”
The announcement is the latest development in a three-year investigation led by James into the finances of the Trump Organization.
In January, James’ office said it had found “substantial” evidence showing the Trump Organization used false or misleading asset valuations on its financial statements to obtain loans, insurance and tax benefits. The following month, Trump’s longtime accounting firm resigned.
James began her investigation in 2019 after former Trump lawyer Michael Cohen testified before Congress alleging that Trump inflated the value of some assets to obtain loans and insurance and undervalued others to gain tax benefits.
In addition to the new fraud lawsuit, the Trump Organization will go on trial next month on charges that it participated in a 15-year tax fraud scheme, and its longtime chief financial officer has agreed to testify against the company.
Weiselberg, who served as the Trump Organization’s chief financial officer for decades, pleaded guilty in August to his role in a 15-year tax fraud scheme and as part of the deal, had agreed to testify against Trump’s real estate company. at the trial.
In recent weeks, the Trump Organization had offered to settle to fend off the lawsuit, even though they denied any wrongdoing, but James’ office has made clear it is not interested in a deal, people familiar with the matter said.
In April, after a protracted legal battle to subpoena the depositions of Trump’s grown children, lawyers for James’ office said they were nearing the end of the investigation and needed Trump’s testimony before making a decision.
Last month, Trump did not take questions and asserted his Fifth Amendment right against self-incrimination when he was fired from the attorney general’s office. Eric Trump, who runs the business on a day-to-day basis, also invoked his Fifth Amendment right in 2020 by answering more than 500 questions.
Since Trump and Eric Trump refused to answer questions, if the case goes to trial, the jury could draw an “adverse inference” against them for not answering questions. This could lead to a higher judgment against them or the company if they are found liable.
Ivanka Trump and Trump Jr. both answered questions during interviews that lasted more than seven hours, sources told CNN.
James noted that Trump and Weiselberg invoked their Fifth Amendment privilege during her press conference.
“When asked under oath whether he, Mr. Trump, continued to review and approve the statements after he became president of the United States in 2017, Mr. Trump again invoked his Fifth Amendment privilege and declined to answer,” said James on Wednesday.
This story has been updated with additional details.
