The Trumps and their company are accused in a 221-page civil complaint filed Wednesday of engaging in a yearslong scheme to enrich themselves by inflating the values of a wide swath of properties, stretching across their international real estate empire.
The complaint accuses the company of more than 200 instances of false asset valuations, described as being derived from “objectively false assumptions and blatantly improper methodologies with the intent and purpose of falsely and fraudulently inflating Mr. Trump’s net worth to obtain beneficial financial terms from lenders and insurers.”
“The number of grossly inflated asset values is staggering, affecting most if not all of the real estate holdings in any given year,” New York State Attorney General Letitia James’ office wrote in its complaint. James said the valuations helped inflate Trump’s net worth “by billions of dollars.”
What were some of the “grossly inflated asset values”?
The state asserts that Trump’s triplex apartment in Manhattan was valued based on the claim that it was 30,000 square feet. But it’s 10,996 square feet. The former president reported on his 2015 and 2016 financial statements that the apartment in Trump Tower was worth $327 million, based on its 30,000 square feet. Trump Organization CFO Allen Weisselberg admitted to the state attorney general that the value had been overstated by $200 million, “give or take.”
Further, the golf club’s revenues, according to the attorney general’s office, were under $25 million annually, and the state asserts that Mar-a-Lago’s proper valuation was nearly 10 times less, “closer to $75 million.”
The state also claims Trump’s company said a dozen rent-stabilized apartments in Trump Park Avenue, also in Manhattan, were listed on corporate paperwork as being worth more than $49.5 million. The suit says they had been appraised at a combined $750,000.
Why are Donald Trump Jr., Ivanka Trump, and Eric Trump named in the lawsuit?
The complaint claims that the three Trump children “had familiarity with, responsibility for, and made use of” fraudulent statements of financial conditions to benefit the company. It claims they oversaw many of the deals central to the lawsuit.
How much is New York seeking in damages (also known as disgorgement)?
James’ office is seeking $250 million to be turned over to New York’s state coffers. The complaint describes that figure as an estimate of the company’s benefits from the alleged scheme.
What other punishments does New York want to impose on Trump and his company?
James’ office is asking a judge to revoke the Trump Organization’s business certificate, effectively barring it from doing business in New York.
Her office is seeking to permanently bar Trump, Donald Trump Jr., and Ivanka Trump, from serving as officers or directors of any business in New York, including their family’s company.
The state is also requesting a five-year ban on Trump and the company from acquiring real estate in New York or applying for loans from any New York-based company.
Can’t the company just re-incorporate outside of New York?
Asked this at a press conference Wednesday, James replied that doing so would not affect her office’s lawsuit, filed while New York was central to the companies’ operations.
“Mr. Trump, the Trump Organization, as well as his family, will still have to deal with this complaint. They will have to respond,” James said. “They will have to respond to the allegations therein. If he decides to move to Florida, the reality is, he still has to deal with the great state of New York.”
Can Trump or others go to prison for this?
No, at least not directly from Wednesday’s action. James’ office filed a lawsuit seeking only civil penalties. However, she said at her press conference that the investigation had uncovered “criminal conduct,” which her office is referring to federal law enforcement in the Southern District of New York and the Internal Revenue Service.
Did Trump respond?
On his social media site, Trump called James a “failed” attorney general and accused her of driving businesses out of New York. “Bye-bye,” he wrote.
Alina Habba, an attorney for Donald Trump, said in a statement to CBS News that “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.”
“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,” Habba said. “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 every one of the Attorney General’s meritless claims.”
