The Trumps and their company are accused in a 221-page civil complaint filed Wednesday of engaging in a year-long plan to enrich themselves by inflating the values of a wide range of properties, stretching across their international real estate empire.
The complaint accuses the company of more than 200 instances of false asset valuations, described as being derived “from objectively false assumptions and manifestly inappropriate methodologies with the intent and purpose of falsely and fraudulently inflating Mr. Trump to secure favorable financial terms from lenders and insurers.”
“The number of grossly inflated asset values is staggering, affecting most if not all real estate in any given year,” the office of New York State Attorney General Letitia James wrote in its complaint. . James said the appraisals helped inflate Trump’s net worth “by billions of dollars.”
What were some of the “grossly inflated asset values”?
The state says Trump’s own Manhattan triplex apartment was appraised based on the claim that it was 30,000 square feet. But it’s actually 10,996 square feet. The former president said in his 2015 and 2016 financial statements that the Trump Tower apartment was worth $327 million, based on its 30,000 square feet. The Trump Organization’s chief financial officer, Allen Weisselberg, admitted to the state attorney general that the value was overstated by $200 million, “more or less.”
The New York Attorney General’s office is also questioning the valuation of Mar-a-Lago, the former president’s Florida residence. It was valued at $739 million, the state said in its lawsuit, based on the idea that the property was unlimited and could be developed for residential purposes. However, Trump signed deeds “giving away his residential development rights, severely limiting alterations to the property, and limiting the permitted use of the property to a social club.”
The state lawsuit notes that Trump entered into an agreement with Palm Beach that stated ‘that'[t]the use of the land must be for a private social club’ and that ‘[t]The land, as described herein, is deemed to be one (1) parcel and no part thereof may be sold, transferred, designed or assigned except in its entirety, whether voluntarily or involuntarily, by operation of law or otherwise.
Additionally, the golf club’s revenue, according to the attorney general’s office, was less than $25 million a year, and the state says Mar-a-Lago’s proper valuation was nearly 10 times lower, “closer to $75 million”.
The state also claims Trump’s company said a dozen rent-stabilized apartments on Trump Park Avenue, also in Manhattan, were listed on corporate filings as worth more than $49.5 million. In fact, according to the suit, they had been valued at a combined $750,000.
In an interview with Fox News’ Sean Hannity on Wednesday, Trump claimed that “we had a disclaimer on the front — it basically says, ‘Get your own people. You are at your own risk. This was done by management; it was “not done by…it was done by management, so don’t trust the statement you get.” Trump also said the disclaimer, which he said was “about a page and a half long,” advised the lenders that “if you want to lend money, you have to make sure you have your own lawyers.” . The banks have the best lawyers in the world.”
Why are Donald Trump Jr., Ivanka Trump and Eric Trump named in the lawsuit?
The complaint claims that Trump’s three children “knew of, were responsible for, and used” fraudulent statements of financial terms to benefit the company. He claims they oversaw many of the transactions at the heart of the lawsuit.
How much is New York asking for in damages (also called disgorgement)?
James’ office is seeking to pay $250 million to New York State coffers. The complaint describes this figure as an estimate of the benefits the company derives from the alleged scheme.
What other sanctions does New York want to impose on Trump and his company?
James’ office is asking a judge to revoke the Trump Organization’s business certificate, effectively barring him from doing business in New York.
His office seeks to permanently ban Trump, Donald Trump Jr. and Ivanka Trump from serving as officers or directors of any business in New York, including their family’s business.
The state is also seeking a five-year ban on Trump and the company from acquiring New York real estate or seeking loans from any New York-based company.
Can’t the company just reincorporate outside of New York?
Asked at a press conference on Wednesday, James said it would not affect her office’s lawsuit, filed while New York was at the center of the companies’ operations.
“Mr. Trump, the Trump Organization, and his family will still have to deal with this complaint. They will have to respond,” James said. “They will have to respond to the allegations in there. If he decides to move to Florida, the reality is that he still has to deal with the great state of New York.”
Can Trump or others go to jail for this?
No, at least not directly from Wednesday’s action. James’ office filed a lawsuit seeking civil penalties only. However, she told her press conference that the investigation revealed “criminal conduct,” which her office refers to federal law enforcement in the Southern District of New York and the Internal Revenue Service.
Did Trump respond?
On his social media site, Trump called James a “failed” attorney general and accused her of chasing New York businesses. “Goodbye,” he wrote.
Alina Habba, Donald Trump’s lawyer, said in a statement to CBS News that “today’s record is neither fact-driven nor legal–rather, it is solely focused on advancing the political agenda. of the Attorney General”.
“It is abundantly clear that the attorney general’s office exceeded its statutory authority by interfering in transactions where absolutely no wrongdoing took place,” Habba said. “We are confident that our justice system will not tolerate this unchecked abuse of power, and we look forward to defending our client against each of the Attorney General’s baseless claims.”
Trump Jr. tweeted, “Letitia James doesn’t care about the law. She’s a Democratic activist, only interested in politics.” He added: “It’s ALL politics, nothing more.”