NY AG Accuses Trump Of Fraud In $250 Million Suit

Tish James is seeking to bar Trump from ever doing business in New York State again.
WILKES-BARRE, PENNSYLVANIA - SEPTEMBER 03: Former president Donald Trump walks out on to the stage to speak to supporters at a rally to support local candidates at the Mohegan Sun Arena on September 03, 2022 in Wilke... WILKES-BARRE, PENNSYLVANIA - SEPTEMBER 03: Former president Donald Trump walks out on to the stage to speak to supporters at a rally to support local candidates at the Mohegan Sun Arena on September 03, 2022 in Wilkes-Barre, Pennsylvania. Trump still denies that he lost the election against President Joe Biden and has encouraged his supporters to doubt the election process. Trump has backed Senate candidate Mehmet Oz and gubernatorial hopeful Doug Mastriano. (Photo by Spencer Platt/Getty Images) MORE LESS

New York Attorney General Letitia James sued Donald Trump, his children, and company on Wednesday over his business practices, accusing him of running a ten year long fraud scheme that covered his entire time in office.

James is seeking a $250 million penalty from Trump, and is asking a Manhattan state court to “permanently bar” Trump and three of his children from serving as corporate officers or directors in New York state.

In the 200-page lawsuit, James alleged that the frauds were “approved at the highest levels of the Trump Organization — including by Mr. Trump himself.”

“These acts of fraud and misrepresentation grossly inflated Mr. Trump’s personal
net worth as reported in the Statements by billions of dollars,” the lawsuit reads.

James accused Trump of undertaking the scheme in part to secure favorable loan agreements from banks, and to reduce his tax payments.

The allegations are strikingly similar to those made by Michael Cohen, Trump’s former attorney, to the House Oversight Committee in 2019. There, Cohen alleged that Trump would inflate and deflate the value of his assets to secure various advantages.

James said in a footnote in the lawsuit that her office is referring her findings to the U.S. Attorney’s Office for the Southern District of New York.

The lawsuit runs through a detailed accounting of dozens of allegations of business, bank, and tax fraud from Trump, his children, and his firms. Ivanka Trump, Don Jr., and Eric are the Trump children who were sued.

James claimed in the suit that Trump valued Mar-a-Lago, for example, at $739 million. She said that its real market value was closer to $75 million.

In another example, Trump allegedly valued a group of rent-stabilized apartments in one of his building at $50 million. Their total value, James said, was close to $750,000.

James said that, in total, her team found “more than 200 false and misleading valuations of assets” in financial statements from 2011 to 2021.

If the court approves the remedies that James is seeking, it would likely annihilate the Trump Org.

“Claiming money you do not have does not amount to the Art of the Deal, it’s the Art of the Steal,” James said at a Wednesday press conference.

The frauds that James alleged range from massive schemes to more seemly, small-time swindles.

Trump, for example, allegedly ran one scam that involved memberships at his Westchester golf club. A valuation he submitted said that members would pay $200,000 each for unsold memberships. James alleged that many members were in fact offered free memberships, and that Trump “specifically directed club employees to reduce or eliminate the initiation fees to boost membership numbers.”

Another alleged scheme was simple: Trump claiming that he owned cash which he did not. In one statement, for example, Trump allegedly claimed that money either held in escrow or held by a business in which he owned a minority stake “belonged” to him.

Taken together, the allegations are stunning. Even with years of reporting and suggestions that Trump has, for decades, pursued various fraudulent business practices, James outlines in detail how Trump allegedly managed to build and maintain a national business empire that had fraud woven throughout.

Take the Deutsche Bank financing for his building in Chicago and his resort in Doral, Florida.

Deutsche Bank became Trump’s go-to lender after nearly all the other major banks refused to touch him, realizing that he would frequently refuse to repay loan agreements in full.

But even with Deutsche Bank, James alleged, Trump submitted financial statements with misleading entries, resulting in millions of dollars in credits flowing to him and his companies.

Part of this, James said, had to do with the fact that Trump provided a “personal guarantee” for the loans – they were secured on his net worth.

But the records backing that up were fraudulent as well, James said.

“The complaint demonstrates that Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and to cheat the system, thereby cheating all of us,” she added in her remarks.

Read the lawsuit here:

Dear Reader,

When we asked recently what makes TPM different from other outlets, readers cited factors like honesty, curiosity, transparency, and our vibrant community. They also pointed to our ability to report on important stories and trends long before they are picked up by mainstream outlets; our ability to contextualize information within the arc of history; and our focus on the real-world consequences of the news.

Our unique approach to reporting and presenting the news, however, wouldn’t be possible without our readers’ support. That’s not just marketing speak, it’s true: our work would literally not be possible without readers deciding to become members. Not only does member support account for more than 80% of TPM’s revenue, our members have helped us build an engaged and informed community. Many of our best stories were born from reader tips and valuable member feedback.

We do what other news outlets can’t or won’t do because our members’ support gives us real independence.

If you enjoy reading TPM and value what we do, become a member today.

Latest News
Comments
Masthead Masthead
Founder & Editor-in-Chief:
Executive Editor:
Managing Editor:
Associate Editor:
Investigations Desk:
Reporters:
Newswriter:
Editor at Large:
General Counsel:
Publisher:
Head of Product:
Director of Technology:
Associate Publisher:
Front End Developer:
Senior Designer: