‘Staggering’ fraud: NY AG Letitia James sues Donald Trump, kids and company

NY AG Letitia James filed suit Wednesday against Donald Trump, his three oldest kids Eric, Don Jr. and Ivanka, as well as the Trump Organization, alleging fraudulent business practices.William Farrington


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New York Attorney General Letitia James on Wednesday filed a $250 million lawsuit against former President Donald Trump, his kids Eric, Ivanka and Donald Trump Jr., and the Trump Organization — alleging “staggering” fraud in the family real estate business.

The 220-page civil suit filed in Manhattan Supreme Court is the culmination of a three-year investigation by the Democrat’s office to determine whether the Trump Organization’s assets were exaggerated for loan, insurance and tax purposes.

It seeks to tear away Trump’s ability to run businesses in the Empire State and to prohibit him and his company from buying up commercial real estate for several years.

“Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself, and cheat the system, thereby cheating all of us,” James said at a news conference announcing the suit.

“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 said, referring to Trump’s 1987 book.

James said her probe uncovered possible criminal violations, including of falsifying business records, insurance fraud, issuing false financial statement, conspiracy and bank fraud.

She said her office is referring the case to the Internal Revenue Service and to federal prosecutors in the Southern District of New York.

The suit, which also names ex-Trump Organization CFO Allen Weisselberg, alleges the 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.”

Specifically, James alleges that Trump and the co-defendants used a slew of tricks — including making at least 200 false or misleading statements inflating assets — to carry out a conspiracy that netted them at least $250 million.

James said these misrepresentations — which falsely showed Trump made billions more than he did in reality — were made on “Statements of Financial Condition” that were given to financial institutions such as Cushman & Wakefield, Deutsche Bank and Mazars Group for loan applications and for insurance purposes.


“Each statement was personally certified as accurate by Mr. Trump or by one of his trustees,” James alleged.

Trump would lie about the amount of cash he had on hand, he would overvalue his real estate properties, and ignored legal restrictions on development rights, James claimed.

For instance, Trump valued his 40 Wall Street property at as much as $530 million in 2013 when it was actually appraised at $220 million in 2012, the court papers claim.

And Trump exaggerated the square footage of his triplex in Trump Tower, claiming it was 30,000 square feet when it was actually just under 11,000 square feet, the suit claims. This exaggeration meant that the property was valued at $327 million — a price that no apartment in New York has ever sold for, James said.

The AG claims Trump, three of his kids and company employees made fraudulent representations about Trump’s financial condition.
AFP via Getty Images

Trump also claimed that 12 rent-controlled apartments at Trump Park Avenue were worth $50 million total when they were valued by a third-party appraiser at $750,000 total, the suit claims.

“The examples I laid out just barely scratch the surface of the misconduct,” James said.

As a result, Trump saved hundreds of millions on taxes and received favorable loan and insurance terms, she claimed.

James is seeking to permanently bar Trump, Don Jr., Ivanka and Eric from serving as directors in any New York company. James also wants to bar Trump and the company from striking any real estate deals in New York for five years and from getting any loans in New York for five years.

The AG also wants the defendants to cough up any financial profits from the alleged fraudulent behavior totaling at least $250 million.

James is also seeking to bar Weisselberg and Trump Organization controller Jeffrey McConney from having financial control over any company in New York going forward.

She wants an independent monitor to be installed to oversee compliance for the next five years and she wants the trustees of the Donald Trump Revocable Trust to be replaced with independent trustees.

James also wants the Trump Organization to submit audited annual financial statements of his net worth that will also be sent to any company that previously received his statements of financial condition.

All of these restrictions that James seeks to impose must first be approved by a judge.

James opened an investigation into the company in 2019 after Trump’s one-time personal lawyer Michael Cohen told Congress that Trump exaggerated company assets for tax, insurance and loan purposes.

The AG then filed suit in 2020, claiming the Trump Organization and Eric Trump were stonewalling her probe.

Trump and the other two of his three eldest kids, Ivanka and Donald Trump Jr., have since been added to the case, in which the office sought to enforce subpoenas for records and depositions from family members and company employees. All three of his kids have been execs in the company.

Trump, Ivanka and Don Jr. have fought appearing for depositions but ultimately lost that court battle, and Trump testified last month at the AG’s deposition, where he refused to answer questions, citing his Fifth Amendment rights.

Ex-CFO Allen Weisselberg, who pleaded guilty to fraud last month in a criminal case, was also named in the suit.
Getty Images

The lawsuit on Wednesday comes after the AG rejected at least one offer by Trump’s camp to settle the case.

“We rejected settlement offers that they submitted and our doors are always open,” James told reporters.

In a statement, Trump lawyer Alina Habba told The Post 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.”

“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 said. “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.”

A spokesman for the US Attorney of the Southern District of New York said Wednesday they were aware of James’ referral but declined to comment further.

Trump is also facing more legal woes following the Aug. 8 raid on the Mar-a-Lago resort in Florida as the FBI probes whether Trump unlawfully stashed classified documents there. He’s maintained that the documents were declassified before he brought them there.

Trump lawyers were in Brooklyn federal court Tuesday as Judge Raymond Dearie, the court-appointed special master, works to determine which of the 11,000 seized documents could fall under attorney-client or executive privilege.

The Trump Organization is also set to face trial next month on charges of tax fraud where Weisselberg is slated to testify against the company as part of a plea deal he struck last month with the Manhattan District Attorney’s Office.

In the wake of James’ suit, Manhattan DA Alvin Bragg said in a statement: “Our criminal investigation concerning former President Donald J. Trump, the Trump Organization, and its leadership is active and ongoing.”


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