The New York state attorney general has filed a civil lawsuit against Donald Trump and members of his family, the culmination of a years-long investigation into financial practices at the Trump Organization.
Letitia James announced the lawsuit Wednesday in New York, in a move that is sure to add to the dismay of the former US president, his family and his inner circle over the legal predicament he finds himself in.
Announcing the lawsuit to reporters in New York, James said: “The complaint shows that Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and cheat the system, thereby defrauding us all. He did it with the help of the other defendants.”
The New York lawsuit is an escalation of serious legal threats Trump already faces on multiple fronts, including possible accusations of keeping secret records after his time in office and multiple investigations into his attempts to overturn his 2020 election defeat.
The statement said James' lawsuit was filed "against Donald Trump, the Trump Organization, senior management and related entities for engaging in financial fraud over the years to obtain numerous economic benefits."
“The lawsuit alleges that Donald Trump, with the help of his children Donald Trump Jr., Ivanka Trump and Eric Trump, and senior Trump Organization executives, falsely inflated his net worth by billions of dollars to induce banks to lend money to Trump. Organizations on more favorable terms than would otherwise be available to companies in order to meet ongoing credit agreements, induce insurers to provide coverage for higher limits and lower premiums, and obtain tax benefits, among other things.”
Trump, Donald Trump Jr., Ivanka Trump, and Eric Trump have all been impeached amid state investigations.
James also named former Trump Organization chief financial officer Allen Weisselberg and Trump Organization comptroller Jeffrey McConney on Wednesday. In a separate criminal investigation in New York, Weisselberg, 75, pleaded guilty to tax fraud.
James alleged that the defendants in her investigation made more than 200 false and misleading asset valuations in financial statements between 2011 and 2021.
Trump's properties involved in the New York civil lawsuit include Mar-a-Lago in Florida (which Trump valued at as much as $739 million, when it should be closer to $75 million, according to the suit) and several golf courses.
Regarding Trump Tower on Fifth Avenue in Manhattan, James said, “Mr. Trump stated that his apartment is over 30,000 square feet, which was the basis for the apartment's valuation.
In reality, the apartment was less than 11,000 square feet, a fact Mr. Trump was well aware of. And based on that inflated square footage, the condo was worth $327 million in 2015 and 2016.
“To date, no apartment in New York has ever sold for anything close to this price.
“Tripling the size of the apartment for valuation purposes was a deliberate and intentional fraud. It's not an honest mistake."
James also said investigators believe "the conduct alleged in this action also violates federal criminal law, including making false statements to financial institutions and bank fraud."
She said, "We are referring these criminal violations that we uncovered to the United States Attorney for the Southern District of New York and the Internal Revenue Service."
Before James' announcement, Bloomberg News reported that "members of Trump's inner circle" had expected the lawsuit, with one characterizing it as "a fundraising opportunity for James, a Democrat facing re-election in November."
Trump constantly accuses James of being politically motivated. He also claimed that the attorney general, who is Black, is a racist.
James detailed the relief he seeks. The actions include "re-asking the court to permanently enjoin Mr. Trump, Donald Trump Jr., Eric Trump and Ivanka Trump from serving as an officer or director of any corporation or similar business entity incorporated or licensed in New York State."
Related: Special master in Trump case appears skeptical of declassification claims
James also aims to prevent “Trump and his organization from entering into any acquisition of commercial real estate in New York State for five years. We prohibit Mr. Trump and the Trump Organization from soliciting any loans from any financial institution registered with the New York Department of Financial Services for five years.
“We demand that Mr. Trump and the Trump Organization divest themselves of the financial benefits obtained through ongoing fraudulent practices, estimated to have a base value of at least $250 million, and to appoint an independent monitor at the Trump Organization to oversee valuation compliance and financial disclosure . creditors, insurers and tax authorities for at least five years.
James summed it up: “I want to be clear. White-collar financial crime is not a victimless crime.”
She added: “Claiming you have money you don't is not making a deal. It is the art of stealing... No one is above the law.”
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