In filing a fraud lawsuit Wednesday against Donald Trump, his three eldest children and their company, Letitia James, the New York attorney general and a longtime political antagonist of the former president, didn’t mince words. “Trump falsely inflated his net worth by billions of dollars to unfairly enrich himself and cheat the system,” James said in a statement. “In fact, the very basis of his alleged net worth is rooted in incredible fraud and lawlessness.”
The lawsuit his office filed in State Supreme Court alleges that, from 2011 to 2021, the Trump Organization’s financial statements explicitly overstated the value of at least twenty-three of his properties and other assets, from his Fifth Avenue triplex apartment and his daughter’s penthouse. on Park Avenue to her estate in Mar-a-Lago, Florida, and its vast network of golf courses. “The amount of grossly inflated asset values is staggering and affects most, if not all, real estate holdings in any given year,” the suit states. He also says that Trump’s alleged deceptions brought him and his co-defendant financial benefits of up to an estimated $250 million, and he asks the court to compel him to repay these profits, plus interest.
In addition to Trump, the lawsuit names his children Donald, Jr., Eric and Ivanka as defendants. In 2014, the complaint says, Ivanka was given the option to purchase a penthouse on Trump Park Avenue for $14.3 million, but the apartment was valued on the Trump Organization’s 2014 “Statement of Financial Condition” at $45 million. According to the lawsuit, Trump’s son Eric was “taking the lead” on the Seven Springs estate, a large property in Westchester County, New York, that Trump bought for $7.5 million in 1995 but between 2011 and 2021 valued. up to two hundred and ninety-one million dollars. The lawsuit also alleges that, in 2016, the Trump Organization misled a third-party appraiser who prepared an appraisal of the Seven Springs property, which he then submitted to the Internal Revenue Service in support of a conservation easement application “which ultimately and fraudulently reduced Mr. Trump’s tax liability by more than $3.5 million.”
The Trump Organization did not respond to a request for comment, but a company spokesman told the Wall Street Journal that the complaint was “the culmination of nearly three years of persistent, targeted, and unethical political harassment.” Trump, in a social media post, dismissed the lawsuit as a “witch hunt” and described James as “a fraud who campaigned on a ‘get Trump platform.’ Eric, who is the executive vice president of the Organization Trump said on Twitter that James, who is running for re-election in November, was “working for the DNC,” or the Democratic National Committee. Wall Street Journal quoted Alina Habba, Trump’s attorney, as saying the lawsuit’s claims were baseless. An attorney for Ivanka and Donald, Jr., declined to comment on the TimesBut Donald, Jr. tweeted that James was “arming his office to go after his political opponents.”
It is certainly not a crime to stand on Fifth Avenue and declare yourself a billionaire. And it has long been reported that Trump grossly inflated the value of his assets to exaggerate his net worth. In a Washington 2018 mail article, Jonathan Greenberg, former reporter for the Forbes 400 of the richest Americans, recalled how, as early as 1984, a Trump Organization official representing himself as “John Barron” called him out and claimed that Trump owned real estate far more valuable than the magazine had told him. attributed. . (Trump, who Greenberg believes made the calls himself, wanted to be higher up the rich list.)
Where Trump and his businesses crossed a legal line, the complaint alleges, resulting in false financial statements that grossly inflated his net worth to “induce banks to lend money to the Trump Organization on more favorable terms than would otherwise be the case.” would have been available to the company.” to satisfy ongoing loan covenants and induce insurers to provide insurance coverage for higher limits and lower premiums.” The complaint identifies numerous loans and insurance policies that it said were awarded at least in part based on claims Trump made about his wealth in a “Statement of Financial Condition,” a list of his assets and liabilities that the Trump Organization produces annually.
At his news conference, James credited Michael Cohen, Trump’s former lawyer and mediator, who turned on him after being charged with tax evasion and campaign finance violations, for helping to launch his investigation. In February 2019, Cohen told Congress that Trump “inflated his total assets when he served his purposes. . . and deflated his estate to reduce his property taxes”). Practically the complaint extensively develops the same argument, and an obvious question arises from its reading: Why has no criminal charge been filed in this case?
For some time, the investigation of James was carried out in parallel with a criminal investigation carried out by the Manhattan district attorney’s office. Earlier this year, a newly elected district attorney, Democrat Alvin Bragg, reportedly stopped presenting evidence to a grand jury in the Trump case, and two lead prosecutors working on the investigation abruptly resigned. One of them, Mark Pomerantz, said in a resignation letter to Bragg that was made public: “I and others have advised you that we have sufficient evidence to establish Mr. Trump’s guilt beyond a reasonable doubt, and we believe that the prosecution would prevail if charges were filed.”
The content of the civil complaint demonstrates why a veteran prosecutor like Pomerantz might have taken this view. Under New York’s criminal code, it can be a felony to maintain false business records, and the complaint alleges that in some cases the Trump Organization overstated the value of its properties compared to its internal appraisals, even when it had received independent appraisals. . which was in conflict with his own claims. In 2013, for example, he valued his lease on 40 Wall Street, an office and retail building, at $530 million, despite a bank-ordered appraisal the previous year that valued it at $220 million. . . More recently, in 2020, it valued Trump Park Avenue, a condominium, at $135.8 million, despite an appraisal, earlier in the same year, of $84.5 million. In a criminal case, how would Trump and his associates explain these discrepancies?
On the other hand, the complaint also provided some clues as to why Bragg may have questioned “the likelihood that a prosecution would be successful,” to use Pomerantz’s words. Mainly, these were skip tracks. The complaint does not contain much in the way of emails or internal communications, which often feature prominently in white-collar criminal proceedings. Nor does it contain any suggestion that the government has any cooperating witnesses within the Trump Organization who could testify to Trump’s personal culpability. Allen Weisselberg, Trump’s longtime financial boss who helped prepare the annual “Statement of Financial Condition,” is listed as a co-defendant. The same goes for the company’s controller, Jeffrey McConney. In a separate criminal case involving the compensation practices of the Trump Organization, Weisselberg pleaded guilty to felony counts of tax fraud, falsifying business records and grand theft, but has not allegedly refused to testify against Donald Trump himself.