Trump, company and family members sued by New York AG over alleged fraud scheme

“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,” James said, as she announced the action at a press conference in Manhattan 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.”

“The pattern of fraud that was used by Mr. Trump and the Trump organization was astounding,” James added.

Trump has repeatedly asserted that James, a Democrat running for a second term in November, is on a political vendetta, noting that during her 2018 campaign for AG she repeatedly vowed to pursue legal action against Trump and said he should be “scared” if she was elected. During his campaign, James promised to target Trump for investigation and told voters his election would bring pressure on him similar to that posed by Special Counsel Robert Mueller.

On Wednesday, his legal team reiterated that contention.

“Today’s filing is neither focused on the facts nor the law – rather, it is solely focused on advancing the Attorney General’s political agenda,” said Trump attorney Alina Habba. “It is abundantly clear that the Attorney General’s Office has exceeded its statutory authority by prying into transactions where absolutely no wrongdoing has taken place. We are confident that our judicial system will not stand for this unchecked abuse of authority, and we look forward to defending our client against each and every one of the Attorney General’s meritless claims.”

The non-criminal enforcement action caps a three-and-a-half year investigation that state officials say began shortly after Trump’s former attorney, Michael Cohen, tested to Congress that Trump regularly inflated the value of his company’s assets in order to secure favorable tax and loan arrangements.

James is accusing Trump and his children of creating more than 200 misleading evaluations of the company’s finances and other forms of misrepresentation, including by falsely inflating the square footage of his own apartment from 11,000 to 30,000 in financial filings. As a result, Trump declared the apartment to be worth $327 million, an amount James said is significantly greater than any apartment ever sold in New York City.

James also alleged that Trump repeatedly counted cash controlled by Vornado Partnership Interests — in which Trump had a limited partnership but no access to the funds — as if it were his own. Trump also inflated the value of “anticipated income” from golf club membership fees, she alleged.

“For example, at Mr. Trump’s golf course in Westchester, the valuation for 2011 assumed new members would pay an initiation fee of nearly $200,000 for each of the 67 unsold memberships, even though many new members in that year paid no initiation fee at all ,” the lawsuit alleviates.

The lawsuit includes dozens of examples of allegedly false financial filings, from contending that Trump inflated his net worth as part of a scheme to purchase the Buffalo Bills to his successful bid to build a hotel in the Old Post Office Building in Washington, DC — which became a prominent hive of pro-Trump activity during his presidency and netted $100 million when it was sold in May.

“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.”

While the sweeping relief James is seeking — subject to approval by a state court judge — would cripple many of Trump’s businesses, James acknowledged at his press conference that Trump’s lawyers recently proposed a settlement, which his office rejected. But she said her team would consider future proposals to resolve the case.

“Our door is open,” the attorney general said.

James’ action is the latest in a mushrooming pileup of legal threats to Trump and may not even be the former president’s most acute legal headache as a series of other probes and trials close in on him and various figures in his orbit.

The new suit from the New York attorney general came during a week in which the former president’s attorneys were fighting in federal court to block the Justice Department’s effort to investigate the discovery of highly sensitive national security records at his Mar-a-Lago estate. Federal prosecutors are also hauling in former Trump aides and allies to a grand jury probing his efforts to subvert the 2020 election, and an Atlanta-area grand jury is reaching a critical phase in its own election-related probe.

Manhattan District Attorney Alvin Bragg is preparing to try a criminal fraud case against the Trump Organization next month and recently secured a guilty plea and agreement with the company’s former CFO Allen Weisselberg to testify in the trial. The former president was not charged in that case, but James said her new suit is based in part on evidence about Trump’s directives to Weisselberg to inflate various financial statements.

Trump had fought efforts to force his deposition in the attorney general’s case, but lost a series of court challenges on the issue. When he finally appeared for questioning last month, he reportedly invoked his Fifth Amendment right against self-incrimination more than 400 times.

“When your family, your company, and all the people in your orbit have become the targets of an unfounded, politically motivated Witch Hunt supported by lawyers, prosecutors, and the Fake News Media, you have no choice,” Trump said in a statement explaining why he took the Fifth despite numerous past comments he’d made about such a move signaling guilt.

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