September 30, 2022
World

Donald Trump and Three of His Kids Sued for Alleged Business Fraud By New York Attorney General

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New York Attorney General Letitia James filed a staggering $250 million lawsuit against former President Donald Trump, his three adult children, the Trump Organization, and senior management in the company, alleging that they were involved in efforts to falsely inflate Trump’s assets by billions of dollars in order to mislead lenders and secure more favorable loans.

“The statements of financial condition were greatly exaggerated, grossly inflated, objectively false, and therefore fraudulent and illegal,” James said at a Wednesday press conference. “Claiming money that you do not have does not amount to the ‘Art of the Deal.’ It’s the Art of the Steal.”

James’ lawsuit alleges that Trump, with the help of his children Ivanka, Don Jr. and Eric, and executives in the Trump Organization, falsely inflated Trump’s net worth to satisfy continuing loan covenants, secure insurance coverage for higher limits at lower premiums, and to gain tax benefits, among other goals. James alleges that between 2011 and 2021, Trump and the Trump Organization knowingly created more than 200 false or misleading valuations of his assets. “There cannot be different rules for different people in this country or in this state,” James said. “And former presidents are not different.”

Read More: The Major Ongoing Investigations Into Donald Trump

While James filed a civil lawsuit, she said that her office is cooperating with a parallel criminal investigation run out of the Manhattan District Attorney’s Office investigating similar alleged conduct and has also referred their findings to the U.S. Attorney’s Office for the Southern District of New York and the Internal Revenue Service for criminal investigations. “Because this is a civil case, in effect the Attorney General is able to accuse Trump and his associates of committing crimes, but will only have to prove those crimes by a preponderance of the evidence, a much lower standard than any prosecutor would have to meet to secure a criminal conviction for the same conduct,” says Jessica A. Roth, a professor at Cardozo Law and a former federal prosecutor.

Trump’s legal team did not respond to TIME’s request for comment. Trump’s children could not be immediately reached for comment. In a statement, the Trump Organization said that the filing “represents the culmination of nearly three years of persistent, targeted, unethical political harassment.”

“While the job of the Attorney General is to protect the interests of the public, today’s filing, for the first time in the history of the Attorney General’s office, seeks to protect the interests of large, sophisticated Wall Street banks,” the Trump Organization statement continued. “However, not only was no bank harmed—actually, they profited handsomely – to the tune of hundreds of millions of dollars in interest and fees—and never once took issue with any of the loans in question—all of which are either current or have been paid off (in many cases early).”

James’ complaint alleges that the scheme focused on annual Statements of Financial Condition that asserted Trump’s net worth, and alleges that between 2011 and 2021 those statements were fraudulent. The complaint alleges that Trump had directed Allen Weisselberg—the longtime financial officer for the Trump Organization—to have his net worth on his statements go up every year. Weisselberg’s lawyer Nicholas Gravante, Jr. did not immediately respond to TIME’s request for comment on James’ lawsuit. (In July 2021, the Manhattan District Attorney’s Office charged the Trump Organization with a 15-year “scheme to defraud the government” in a separate criminal case and charged Weisselberg with both grand larceny and tax fraud. On August 18, Weisselberg pleaded guilty to the 15 charges. Weisselberg is expected to testify in an upcoming trial resulting from that probe.)

James alleges that Trump and the Trump Organization also “ignored the most basic rules and standards for financial reporting” in their financial statements, including allegedly stating that Trump possessed cash he did not have and changing the methods of valuation of properties each year for no apparent reasons. James’ sweeping, 214-page complaint details allegations of fraud across 23 different properties and other assets owned by Trump and the Trump Organization. They include the Trump Tower Triplex in New York City, which James alleges had a valuation built on “objectively false numbers” to determine property value, as well as other Trump properties in Washington, D.C. and Chicago.

James said the lawsuit is the result of a three-year investigation that included interviews with over 65 witnesses and a review of millions of documents. On August 10, Trump declined to answer questions during a deposition with James, invoking his 5th Amendment right against self-incrimination during a deposition. NPR reports that Don Jr. and Ivanka also both testified in the investigation.

James said Wednesday that the New York Attorney General’s office is seeking to permanently ban Trump and his three children from serving as an officer or director in any New York corporation or similar business entity registered in New York state, bar Trump or the Trump Organization from entering into any New York real estate acquisitions for five years, and pay an estimate of all financial benefits obtained through the alleged fraud, which James estimated to be roughly $250 million.

The New York lawsuit is the latest in the former President’s rapidly growing mountain of legal woes. He not only faces criminal investigations for allegedly falsely inflating his assets, but also for allegedly illegally removing documents with classification markings from the White House. He’s also being investigated by both Congress and the Justice Department for his actions surrounding the deadly riot at the U.S. Capitol in 2021. Trump, who may pursue a reelection bid in 2024, has denied all wrongdoing.

Write to Madeleine Carlisle at [email protected]

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