Donald Trump and three of his children were sued for inflating the value of his real estate company's assets, the culmination of a years-long probe by the New York attorney general into the former president.
Attorney General Letitia James filed suit Wednesday in New York state court, naming Trump, the Trump Organization, and Donald Trump Jr., Ivanka Trump and Eric Trump — who are senior executives at the company. James is seeking penalties including a permanent ban on the four Trumps running companies in New York, their home state.
"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," James said at a press conference.
The suit is the latest legal threat to Trump as he weighs another run for the presidency in 2024. Trump is already facing a federal criminal probe of his handling of classified documents that FBI agents recovered from his Florida Mar-a-Lago home. The Justice Department also continues to probe his actions preceding the Jan. 6 assault on the Capitol as well.
James said Trump and his company from 2011 to 2021 inflated the value of numerous properties, including a Lower Manhattan skyscraper, his Fifth Avenue penthouse apartment and Mar-a-Lago, in order to obtain more favorable loan terms, cheaper insurance, lower tax bills and other "incredible financial benefits."
In addition to banning Trump and his children from serving as corporate officers and directors, James is seeking $250 million in disgorgement and cancellation of corporate certificates to any company controlled by Trump that benefited from the alleged scheme. That would effectively prevent any of those companies from doing business in New York, she said.
Trump said on his social media site, Truth Social, that the lawsuit was "another witch hunt" by James, who he said "is spending all of her time fighting for very powerful and well represented banks and insurance companies, who were fully paid, made a lot of money, and never had a complaint about me, instead of fighting murder and violent crime, which is killing New York State."
Though her case is civil, James said she believed her investigation had uncovered federal criminal liability and had referred the matter to the Manhattan U.S. attorney's office and Internal Revenue Service.
"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," Alina Habba, a lawyer for Trump, said in a statement. "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."
Alan Futerfas, a lawyer for the Trump Organization, didn't immediately return an email seeking comment about James' suit. Ronald Fischetti, a lawyer for Trump, didn't immediately return an email seeking comment.
Sarah Krissoff, a former Manhattan federal prosecutor now in private practice, called James's complaint "an incredibly detailed road map of this alleged fraud" and said "from the viewpoint of a prosecutor, it looks like they've done the work they need to do here, very methodically, to build this case."
Criminal trial
James's case also comes just before the Trump Organization goes on trial on criminal tax-fraud charges next month. The company's longtime Chief Financial Officer Allen Weisselberg, who pleaded guilty to similar charges in August, agreed to testify for the prosecution as part of a deal with Manhattan District Attorney Alvin Bragg. Weisselberg and other top Trump Organization executives were also named in James's Wednesday suit, and she is seeking a ban on him serving as a company officer.
Nicholas Gravante, a lawyer for Weisselberg, declined to comment on James's lawsuit
Trump has denied the allegations against him and long argued that the New York civil and criminal investigations were politically motivated. Like most elected officials in the state, James and Bragg are both Democrats. Trump sued James in federal court, claiming her "
James said she started the probe after Trump's longtime lawyer and fixer Michael Cohen testified to Congress in 2019 that the Trump Organization regularly manipulated asset valuations to get favorable loans or tax benefits. Her office reviewed
Trump long fought subpoenas in the case, and much information about James's probe first emerged as he and his company tried to avoid turning over documents or providing testimony. In a January motion seeking a court order compelling Trump to comply with her subpoenas, James gave detailed preview of her preliminary findings, saying her office had uncovered "
Among other things, Trump's financial filings have "misstated objective facts, like the size of Mr. Trump's Trump Tower penthouse" and "miscategorized assets outside Mr. Trump's or the Trump Organization's control as 'cash,' thereby overstating his liquidity," James said in January. She said the misleading valuations helped Trump win better terms on loans, insurance coverage and tax deductions.
In her suit, James noted that Mar-a-Lago was valued as high as $739 million based on Trump's representation that it was unrestricted and could be developed and sold. At the same time, "Mr. Trump himself signed deeds donating his residential development rights and sharply restricting changes to the property," James said.
Foreshadowing the Justice Department's suspicions in the Mar-a-Lago investigation, James's lawyers thought Trump was withholding documents even after his lawyers said he complied with her subpoenas. The former president was held in contempt of court in April and fined $10,000 a day as part of James's investigation after he failed to properly respond to a related subpoena for documents and records in his personal possession.
Trump eventually resolved the contempt finding after employees signed sworn affidavits attesting to their efforts to recover documents and racking up
The former president also long fought against answering James's questions under oath. After losing an appeal, he finally sat for a deposition in August but asserted his Fifth Amendment right against self incrimination and didn't answer any questions other than to confirm his name.
Eric Trump, the former president's son and an executive vice president at the Trump Organization, was deposed by state investigators in 2020 after fighting in court to delay the questioning. He also invoked the Fifth Amendment more than 500 times over six hours.
Pleading the Fifth carries risks for the Trumps, especially since James's case is civil rather than criminal. A criminal defendant's failure to testify can't be held against them, but jurors in a civil case are allowed to draw a negative inference about someone's refusal to answer questions.
— With assistance from Patricia Hurtado and Jennifer Jacobs
