New York State just accused the Trump Organization of massive fraud.
In a sweeping, $250 million lawsuit against former President Donald Trump, his adult children, and his family business unveiled Wednesday, New York Attorney General Letitia James accused the company of manipulating the valuations of its properties to score financial advantages.
The lawsuit is the result of a three-year probe of Trump’s business practices, during which Trump was personally hauled in for a deposition and forced to invoke his Fifth Amendment right against self incrimination hundreds of times—a move he once said was only for guilty people and the mob.
“Today we are filing a lawsuit against Donald Trump for violating the law as part of his efforts to generate profits for himself, his family and his company,” James said. She accused Trump of falsely inflating his net worth by “billions of dollars” in order to make more money.
In a press conference Wednesday, James said her team had also discovered evidence of violations of federal law, “including issuing false statements to financial institutions and bank fraud.”
James said: “We are referring those criminal violations that we’ve uncovered to the Southern District of New York and the Internal Revenue Service.”
The lawsuit seeks to permanently bar Trump and his adult children (Don Jr., Eric, and Ivanka) from serving as an officer or director of any company registered or licensed in New York State. The suit would ban Trump and the Trump Organization from entering into any New York real estate acquisitions for five years, and seeks to claw back an estimated $250 million, which the AG’s office said was the approximate amount of financial benefits obtained through fraud.
James’ lawsuit, which stretches to well over 200 pages, accused Trump’s company of engaging in a “staggering” pattern of inflating assets for financial gain, and zeroed in on a series of “statements of financial condition” that Trump used to represent his wealth over the course of several years.
“Mr. Trump’s Statements of Financial Condition for the period 2011 through 2021 were fraudulent and misleading in both their composition and presentation,” James’ lawsuit said.
“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,” the lawsuit said.
The complaint included allegations of fraud across more than 23 different properties and other assets, from his Palm Beach club, Mar-a-Lago, to his Manhattan properties and even golf clubs in Scotland.
James’ office unveiled a lengthy, detailed list of precise allegations at those properties, which included allegedly exaggerating the square footage of a triplex apartment in Trump Tower by a factor of three.
James has previously claimed in court documents that Trump’s company made false representations about the valuations of various assets, that her team “has developed significant additional evidence indicating that the Trump Organization used fraudulent or misleading asset valuations to obtain a host of economic benefits, including loans, insurance coverage, and tax deductions.”
James, a Democrat who’s running for reelection in November, rejected attempts by the Trump Org to settle the investigation in September, the New York Times reported last week. Trump has repeatedly denied wrongdoing, and blasted the probe as an unfounded witch hunt.
He’s also repeatedly called James, who is Black, a “racist,” including once in a bizarre online message wishing her a “Happy Easter.”
Because James’ lawsuit is a civil dispute, and not a criminal indictment, Trump’s invocation of the Fifth Amendment didn’t actually save him from harm. In a civil matter, invoking the Fifth can be used as reason to make what lawyers call an “adverse inference”—or, in plain terms, the conclusion that someone didn’t want to answer because the truth didn’t look good.
Trump’s son Eric likewise invoked the Fifth Amendment more than 500 times in prior testimony in the NY Attorney General’s investigation.
Trump’s company is scheduled to go on criminal trial in late October over a separate set of accusations involving failure to pay taxes on benefits awarded to its employees. The company’s long-serving chief financial officer, Allen Weisselberg, pleaded guilty to his role in orchestrating those payments in August, and agreed to testify against the Trump Org at trial.
Weisselberg received a much-reduced sentence and may serve just 100 days. But the judge overseeing the case has warned him that if he lies about the company on the stand, he could face up to 15 years.