New York State Attorney General Letitia James announced today that a lawsuit has been filed against Donald Trump for violating the law to generate profits and funds for himself and his family.
James made the announcement at her office in Manhattan. The announcement was delayed until President Biden had completed his address to the United Nations General Assembly.
James said this was a three year investigation that involved hearing from some 65 witnesses. James named Trump, his children and Trump Organization CFO Alan Weisselberg and Trump Organization Controller Jeffrey McConney as having allegedly committed various crimes.
James cited specific state criminal laws that it is alleged Trump violated. The violations include fraud against insurance companies, banks and tax fraud.
James said referrals will be made to the IRS and federal prosecutors in the Southern District of New York.
James seeks to permanently bar Donald Trump, Eric Trump, Donald Trump Jr., and Ivanka from serving as business officers or directors in New York. She seeks to prevent the Trump Organization from being involved in any New York real estate transaction for five years. She also is seeking appointment of an independent monitor to oversee financial dealings at the Trump Organization for five years. She also wants new, accurate personal wealth statements to be prepared and distributed by Trump.
James is seeking to bar Trump from applying for any bank loans in New York state for five years and wants to cancel the certificates of incorporation under which various Trump companies were organized in New York state. She also is seeking to recover an estimated $250 million that it is alleged Trump improperly obtained.
James said it is alleged Trump used various themes to inflate the value of many of his properties, including his property at Mar-a-Lago in Florida. He also said that Trump directed that memberships at his clubs be given away for free and then their perceived value used to inflate financial statements.
One of the Trump properties cited in the lawsuit filed by James is the Seven Springs estate consisting of approximately 212 acres within the towns of Bedford, New Castle, and North Castle in Westchester. The document filed in Supreme Court of the State of New York says, in part:
“Seven Springs LLC, a Trump Organization subsidiary, purchased the property in December 1995 for $7.5 million. A 2000 appraisal prepared for the Royal Bank of Pennsylvania and sent to the Trump Organization estimated that Seven Springs had an ”˜as-is”™ market value of $25 million for residential development. The same bank”™s records further indicate that a 2006 appraisal showed an ”˜as-is”™ market value of $30 million.
“In sharp contrast to these bank-appraised market values, the Statements of Financial Condition (Trump”™s statements) from 2011 to 2021 include far higher valuations of Seven Springs, ranging between $261 million to $291 million.”
“All of these values were a fiction, totally unsupported by the development history of the property and contradicted by every professional valuation of the property,” the court filing said.
James outlined financial dealings that involved what she termed as false and misleading financial statements. It is alleged that Trump personally and with associates came up with higher property valuations that were used to defraud.
James said that the complaint includes examples from 23 assets that “were grossly and fraudulently” inflated. She said more than 200 examples of fraudulent financial information were uncovered during her investigation. The complaint is 222 pages long.
She described the pattern of fraud and deception that her investigators uncovered as being “astounding.”
“Claiming to have money that you do not have is not the art of the deal, it is the art of the steal,” James said.
While James was answering questions from reporters after making her announcement, Donald Trump Jr. put out a Tweet alleging that what she was doing was political and part of a Democratic witch-hunt.
