By Terrance Turner
Sept. 21, 2022
New York Attorney General Letitia James filed a civil lawsuit against Donald Trump, three of his children, and the Trump Organization today, alleging “staggering” fraud. (Eric Trump, Ivanka Trump, and Donald Trump, Jr. are named as defendants in the suit, along with the Organization and its former CFO Allen Weisselberg.) James announced the news in a press conference this morning.
“Good morning,” she began. “Following a comprehensive investigation by my office, including witnesses, interviews with more than 65 witnesses, and review of millions of documents that were submitted by Mr. Trump and others, I am announcing that today, we are filing a lawsuit against Donald Trump for violating the law as part of his efforts to enrich himself, his family, and his company. The complaint demonstrates that Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself, to cheat the system — thereby cheating all of us.
He did this with the help of the other defendants: his children, Donald Trump, Jr, Ivanka Trump, and Eric Trump, and former Trump organization chairperson Allen Weisselberg.”
“Mr. Trump and the Trump Organization repeatedly and persistently manipulated the value of assets — to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company; to pay lower taxes; to satisfy continuing loan requirements; and to induce insurance companies to provide insurance coverage with higher limits and at lower premiums. This conduct was all in violation of executive law Section 6312, which gives the Attorney General broad and special powers to go after persistent and repeated fraud and illegality.
As part of demonstrating legality under that section of law 6312, we show that they violated several state and criminal laws, including falsifying business records, issuing false financial statements, insurance fraud, and engaging in a conspiracy to commit each of these state law violations. We believe the conduct alleged in this action also violates federal criminal law, including issuing false statements to financial institutions and bank fraud. We are referring those criminal violations that we’ve uncovered to the United States Attorney for the Southern District of New York and the Internal Revenue Service.
As a result of these violations, we are asking the court to, among other things: permanently bar Mr. Trump, Donald Trump Jr., Ivanka Trump, [AND] Eric Trump, from serving as an officer or director of any corporation or similar entity registered and/or licensed in New York; to bar Mr. Trump and the Trump Organization from entering into any New York State commercial real estate acquisition, or from applying for loans from any financial institution in New York for 5 years; to pay for the financial benefits obtained as a result of the persistent fraudulent practices at an estimated 250 million dollars. And towards the end of my remarks,” James continued, “I will go into the other relief that we are seeking.”
See and hear the remarks in full below.
The suit says that Donald J. Trump, Allen Weisselberg, and others joined Trump in acts of fraud. “Mr. Trump and his companies named as 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. These acts of fraud and misrepresentation were similar in nature [and] were approved at the highest levels of the Trump Organization — including by Mr. Trump himself. Indeed, Mr. Trump made known through Mr. Weisselberg that he wanted his net worth on the Statements to increase — a desire Mr. Weisselberg and others carried out year after year in the fraudulent preparation of the Statements.”
“Each Statement of Financial Condition lists Mr. Trump’s assets and liabilities, and then presents his “net worth” as the difference between the two,” the suit says. But it charges those statements inflated Trump’s net worth by billions: “The number of grossly inflated asset values is staggering, affecting most if not all of the real estate holdings in any given year. All told, Mr. Trump, the Trump Organization, and the other Defendants, as part of a repeated pattern and common scheme, derived more than 200 false and misleading valuations of assets included in the 11 Statements covering 2011 through 2021.”
“Nearly every one of the Statements represented that the values were prepared by Mr. Trump and others [with] ‘outside professionals’, but that was false and misleading; no outside professionals were retained,” reads page 11. When Mr. Trump and the Trump Organization received any advice from outside professionals, they ignored it. For example, they had bank-ordered appraisals saying that the commercial property at 40 Wall Street was valued at $220 million as of Nov. 1, 2012. But in their 2012 Statement, they said it was worth $527 million (!).
And the fraud didn’t stop there. Trump’s triplex apartment in Trump Tower was valued as being 30,000 square feet. In reality, it was only 10,996 square feet. As a result, the apartment was valued at $327 million. But according to James, the most expensive apartment in New York City ever sold was around $100 million. (The New York Post says this year’s biggest apartment sale in NYC was a $74 million penthouse on Fifth Avenue. It’s across the street from Trump Tower!)
“Mr. Trump’s Statements of Financial Condition were repeatedly and persistently submitted to banks insured by the Federal Deposit Insurance Corporation for the purpose of influencing the actions of those institutions. The Statements were used to obtain and maintain favorable loans over at least an eleven-year period, including: (a) Deutsche Bank’s extension of a $125 million loan (or combination of loans) in connection with the Trump Organization’s
purchase of the property known as Trump National Doral; (b) Deutsche Bank’s financing of up to $107 million in debt in connection with the Trump International Hotel and Tower, Chicago, in 2012, as well as a $54 million expansion of that loan in 2014; (c) Deutsche Bank’s financing of up to $170 million in funds in connection with the Trump Organization’s purchase and renovation of the Old Post Office property in Washington, DC.”