New York Attorney General Letitia James announced that she had filed a lawsuit against former President Donald Trump, his three adult children, his business associates and a number of his companies on Wednesday.
The lawsuit alleges that Trump artificially inflated the value of several business entities and hopes to prevent Mr Trump and his children Donald Trump Jr, Ivanka Trump and Eric Trump from serving as directors of a company or similar entity; prevent him and the organization from entering into any real estate acquisitions in New York for the next five years; and seeks $250 million from all financial benefits obtained from the fraud.
In addition, they come as the former president weighs a re-election campaign in 2024 after losing to President Joe Biden in 2020. After the FBI executed a search warrant at Mar-a-Lago last month, a poll showed him edging further ahead other potential Republican challengers in a primary.
Similarly, the former president’s supporters have shown little sign of abandoning him, and the latest lawsuit is unlikely to push his supporters away.
At his first meeting after the FBI seized documents from his Palm Beach home, he received a thunderous ovation in Wilkes-Barre, Pennsylvania. At a rally last weekend in Ohio, many of his supporters also joined him in a bizarre one-finger salute. The former president will head to Wilmington, North Carolina this Friday to campaign with his preferred candidates, and there will likely be an event to show solidarity with him.
Some of these claims were already made public in January, such as the former president claiming his apartment was 30,000 square feet when it was actually 10,996 square feet, and the fact that the Trump Organization never collected golf club initiation fees.
But the scope and details of Trump’s actions, with the assistance of Trump Organization CFO Allen Weisselberg, were not known until now.
Here are five key takeaways from the New York Attorney General’s lawsuit against the former president.
Falsification of accounts
The lawsuit alleges that Trump and his organization have created a series of fraudulent accounts.
“Yes, Mr. Trump did in fact make known through Mr. Weisselberg that he wanted his net worth on the statements to increase — a wish Mr. Weisselberg and others carried out year after year in their fraudulent preparation of the statements,” the lawsuit states.
“MR. Trump and the Trump Organization used these false and misleading statements repeatedly and persistently to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company, to satisfy persistent loan covenants and to to get insurance companies to provide insurance coverage for higher limits and at lower premiums.”
The attorney general’s office alleges that Trump, his children, his organization and other defendants made more than 200 false and misleading valuations between 2011 and 2021. Despite saying they received help from outside professionals, they were similarly to the extent that was someone. routinely ignored.
Some ways Trump increased the value of his assets included the aforementioned golf club initiation fees and the size of his apartment.
Falsifying the value of his properties
The lawsuit lays out several allegations about how the Trump Organization relied on “objectively false numbers” to calculate the value of properties.
The Trump Park Avenue building was included as an asset on Mr Trump’s statement of financial condition from 2011 to 2021 with values between $90.9 million and $350 million, with unsold condominium units accounting for up to 95 percent of reported value in some years.
“Reported values of the unsold residential units in the Trump Park Avenue building were significantly higher than the internal valuations used by the Trump Organization for business planning and failed to account for the fact that many units were rent stabilized,” the lawsuit states. But the Trump Organization also marketed rent-stabilized apartments at his Park Avenue property as non-stabilized.
“In fact, Donald Trump, Jr. testified that the rent-stabilized tenants at the building were “the bane of [his] existence for quite a long time,” the lawsuit states. In 2010, a bank-ordered appraisal valued the 12 rent-stabilized apartments at a total of $750,000, but in 2011 and 2012 statements, the rent-stabilized apartments were valued at a market rate of $50 million in total.
Lying about his wealth
In addition to the values of his properties, the lawsuit also alleges that Trump lied about his own wealth, specifically his holdings of cash, cash equivalents or marketable securities. For example, Trump reportedly included the minority stake in Vornado Partnership Interests—which he did not control—in his cash holdings.
“For some years, these restricted funds accounted for nearly one-third of all cash reported by Mr. Trump,” the lawsuit states. Internal documents reportedly acknowledge that the cash in Vornado was not Trump’s access to at will.
“The decision to include cash in the Vornado Partnership Interests as if it were Mr. Trump’s own cash as reflected in the statements and in violation of GAAP was made by Mr. McConney and/or Mr. Weisselberg and was approved by Mr. Trump or his attorney-in-fact Donald Trump Jr., the lawsuit says.
Similarly, in 2014 Trump made a $1 billion bid to buy the Buffalo Bills, the NFL team, and up to $880 million of that bid could have been financed.
“As part of that bid, DJT and the Trump Organization needed a letter of trust from a financial institution to submit his bid package. Mr. Trump asked Deutsche Bank (through Rosemary Vrablic) for that letter, the lawsuit says. Trump’s bid package included a letter signed by Ms. Vrablic indicating he would have the “financial means” to buy the team.
“Although Mr. Trump’s 2013 Statement of Financial Condition (inflated according to the deceptive strategies described above) reported a net worth of approximately $5.1 billion, Mr. Trump sent a separate letter, under his own signature, using an even higher numbers in an attempt to win the bidding: ‘I have a net worth in excess of eight billion dollars (financial statements provided upon request),’” the lawsuit said.
Accounting used to obtain favorable loans
James emphasized that “white-collar crimes are not victimless crimes” when she laid out the case against Trump at her press conference. The lawsuit says the false statements enabled him to get loans on favorable terms.
“Mr. Trump and his operating companies obtained additional benefits from banks other than the loan proceeds in the form of favorable interest rates that likely saved them more than $150 million over the preceding ten-year period,” the lawsuit states.
In the case of Trump National Doral, the organization executed a $150 million purchase and sale agreement for the property, and the false statements allowed him to secure a $125 million loan from Deutsche Bank to meet Trump’s financial reporting requirements as a guarantor of the loan.
“In several instances, the loan agreement required Mr. Trump to confirm the truth and accuracy of his statements as a condition of the guarantee and the continued loan agreements,” the attorney general’s office said in a statement.
Similarly, the Trump International Hotel & Tower in Chicago’s 2009 property value was excluded from statements, apparently because Trump did not want to take a position that would conflict with his claim to the IRS that the property had become worthless, which would allow him to claim a loss under federal tax law. But in 2012, Trump received a $107 million loan on the building from Deutsche Bank after he used the building or its components as collateral.
Trump’s children were intimately involved
All three of Trump’s eldest children – Donald Trump Jr, Ivanka Trump and Eric Trump – are involved and named as defendants in the lawsuit.
“As Executive Vice Presidents, the three children were intimately involved in the operation of the Trump Organization’s business,” the lawsuit states. “They were aware of the true financial performance of the company, whether through Donald Trump Jr.’s work on commercial leasing, Ivanka Trump’s work on Doral, Trump Chicago and OPO, or Eric Trump’s work on the golf course portfolio.”
The lawsuit said Trump, who worked in his father’s administration, directed the company’s hotel and management platforms.
“This included active participation in all aspects of projects, including contract evaluation, pre-development planning, financing, design, construction, sales and marketing, as well as involvement in all decisions related to these activities – large and small,” the lawsuit states. .
Additionally, it notes how Eric Trump, who specifically invoked the Fifth Amendment 500 times during the investigation, “is responsible for all aspects of the management and operation of the Trump Organization, including new project acquisition, development and construction” and was aware of his father’s effort with Vornado. It also noted that Donald Trump Jr also had an active role in the company.