On Wednesday, September 21, 2022, the New York Attorney General, Letitia James, filed a fraud lawsuit against the former President Donald Trump, his business organization, and three adult children, for what she terms as acts of fraud and misrepresentation. In the suit, the Trumps are accused of allegedly misquoting real estate values of their properties in attempts to lure lenders into offering them favorable loans and tax benefits.
The lawsuit alleges a decade of deception leading to billions of dollars in falsified net worth declarations in an attempt to reduce his company’s tax bills while winning favorable terms from insurance companies and banks.
The lawsuit also seeks compensation of about $250 million as proceeds netted from the scheme. James is seeking a five-year ban on the accused in participating in real estate activities – a move that would spell doom for Trump’s real estate empire. What’s more, the lawsuit is seeking to ban the accused from serving as directors or officers of any New York licensed corporations in the future.
“I’m announcing that today we’re filing a lawsuit against Donald Trump for violating the law as part of his efforts to generate profits for himself, his family, his company,” Attorney General James said at press conference in NYC Wednesday morning. “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.”
Though a civil case, the attorney general is also filing a criminal case to federal prosecutors in Manhattan, as well as a tax fraud case to the IRS. James revealed that her office had turned down settlement offers from Trump and his children. She maintained, however, that her office is willing to negotiate with them in the future.
James’s office launched the investigation after Trump’s former fixer and lawyer, Michael Cohen, testified that the former president had intentionally inflated his net worth to save money.
In response to the lawsuit, Alina Habba, Donald Trump’s lawyer, claimed that James’s office had acted beyond its authority by being too inquisitive into the firm’s private transactions, which weren’t fraudulent, and she called the lawsuit meritless. While Trump declined to answer questions in a private meeting, Ivanka and Eric agreed to sit if there was a court order.
One of the properties mentioned by James was Trump Towers, which according to Trump’s valuation, is 30,000 square feet and was worth $327 million in 2015. However, according to James, it is 10,996 square feet and far below the $327 million valuation. What’s more, his Mar-a-Lago estate is valued at $739 million, when according to James, it’s worth $75 million.
“The examples I laid out are just scratching the surface of the misconduct that we have uncovered,” James said. “The pattern of fraud and deception that was used by Mr. Trump and the Trump Organization for their own financial benefit is astounding.”
The Trump Organization is also facing charges of tax fraud by the District Attorney’s office in Manhattan. The case’s trial is set for October 22.
Following James’s revelation, Trump attacked her, referring to her as a fraud for watching murder and other crimes grow uncontrollably under her tenure. Responding to her social media post, Mr. Trump called it “another witch hunt.”
This is one of the most significant blows to the businessman who may run for the US presidency again in 2024.