In a civil fraud lawsuit filed by the New York Attorney General (AG) on Wednesday (September 21), Letitia James claims that Trump inflated his net worth to obtain favourable loans, better insurance, and tax benefits.
Her lawsuit, which is more than 200 pages long, alleged that James, a Democrat, and Trump critic, investigated Trump’s financial activities for three years and found that he engaged in numerous financial misinterpretations and frauds. The lawsuit stated that the Defendants made objectively false assumptions and used blatantly improper methodologies in preparing them.
Among the defendants are Ivanka Trump, Donald Trump Jr., Eric Trump, and the Trump Organisation (a grouping of approximately 500 business entities). Among the claims Trump is being sued for is $250 million- the estimated amount he is alleged to have made from the fraud. Moreover, James seeks a permanent ban on Trump and his adult children serving as directors, officers, or officers in a New York-registered company. She also wants Trump and the Trump Organisation banned from buying New York real estate for five years.
During 2011-2021, Trump is accused of providing more than 200 false and misleading valuations of 23 properties and assets, inflating his net worth through false financial statements and deceptive business practices. According to James, he made $250 million from this scheme.
A Trump Tower apartment, for instance, was valued at 30,000 square feet even though it was only 10,996 square feet. Consequently, the lawsuit stated that the apartment’s value was “absurd” at $327 million, which was far outside of any other apartment’s sale price in New York.
Trump is also accused of valuing his Mar-a-Lago club in Florida at $739 million on the false assumption that the property could be developed and sold for residential uses, despite having already signed away his residential rights. In the lawsuit, approximately $75 million is claimed to have been the actual value of his Florida property. According to Reuters, Trump has repeatedly refused to answer questions during his August depositions, which were part of an inquiry into his financial dealings. More than 400 times, he asserted his Fifth Amendment protection against self-incrimination.
OAG claims Trump violated an extremely significant piece of legislation — New York Executive Law 63 (12), which penalizes anyone who engages in “repeated fraudulent or illegal activities” or displays persistent fraud or illegality in conducting, carrying on, or conducting business.
When pursuing legal action against people who have committed repeated frauds and illegalities, the OAG has both special and broad powers. Even before filing a lawsuit, the AG can issue subpoenas, take depositions, and conduct other investigations under the 63 (12) statute.
Furthermore, according to reports, the prosecution does not have to prove that there was an intent to defraud or that the defendant’s actions caused a financial loss to prove the fraud occurred. A misrepresentation of deceptive practices is all they must prove. Eric Schneiderman, a former New York Attorney General, filed a 63 (12) lawsuit against Trump in 2013 for defrauding students via the now-defunct and unaccredited Trump University.
The consequences of the lawsuit
Depending on the outcome of the lawsuit, Trump and his children, as well as the Trump Organisation, could face a $250 million fine and severe financial restrictions. The US Justice Department (DOJ) and Internal Revenue Service (IRS) have been notified of the OAG’s lawsuit. While it is a civil case, James asserts other state and criminal laws may have been broken.
According to many media reports, Trump intends to run for president in 2024. He faces many legal obstacles before making his formal bid, including this civil case. Trump is under fire from the US DOJ due to his attempts to subvert the results of the 2020 presidential election and his participation in the ensuing attack on the US Capitol by his followers in January 2021. Federal agents seized two of his advisors’ phones earlier this month after he was issued approximately 40 subpoenas.
In August, the FBI raided his Mar-a-Lago estate after he took classified documents to it after leaving office, leading to a separate criminal investigation by the Justice Department. The Justice Department can continue to review the classified records seized from his house as part of its criminal investigation following a decision by a federal appeals court on Wednesday (September 21).
Although Ms. James is not authorized to indict Mr. Trump, a footnote in the lawsuit indicates she provided her findings to the Manhattan office of the United States attorney. Based on the complaint, it appears that the conduct described amounts to bank fraud.
According to Mr. Bragg, the investigation into Mr. Trump and his company is “active and ongoing.” The lawsuit also alleged that the financial statements breached several state laws.