New York attorney general sues Trump and his company — breaking it down
The Trumps and their company are accused in a 221-page civil lawsuit filed Wednesday of participating in a years-long scheme to enrich themselves by inflating the value of vast properties in their international real estate empire.
The complaint alleges more than 200 incidents of false asset valuations at the company, described as stemming from “objectively false assumptions and blatantly incorrect methods with the intent and purpose of falsely and fraudulently inflating Mr. Trump’s net worth, to obtain favorable financial terms from lenders and insurance companies.”
The office of New York State Attorney General Letitia James wrote in its complaint: “The amount of severe inflation in asset values is staggering, affecting most, if not all, real estate holdings in any given year.” James said, The valuation has helped balloon Trump’s net worth by “billions of dollars.”
What is a “severely inflated asset value”?
The state claims that Trump’s own Manhattan three-story condo was valued based on the claim that it was 30,000 square feet. But it’s actually 10,996 square feet. The former president reported in his 2015 and 2016 financial statements that the Trump Tower condos were worth $327 million, based on its 30,000 square feet. Trump Organization Chief Financial Officer Alan Weisselberg admitted to state attorneys general that the value was inflated by $200 million, “give or take.”
The New York attorney general’s office also questioned the valuation of the former president’s Florida home, Mar-a-Lago. The state said in the lawsuit that it was valued at as much as $739 million, based on the idea that the property was unrestricted and could be developed for residential use. Trump, however, signed a deed to “donate his residential development rights, severely limit changes to the property, and limit the permitted use of the property to social clubs.”
The state’s lawsuit states that Trump struck a deal with Palm Beach, “that”[t]He used the land for a private social club” and “[t]As set forth herein, the Land shall be deemed to be one (1) parcel of land, no part of which may be sold, assigned, designed or transferred, except by law or otherwise, voluntarily or otherwise, in its entirety, voluntarily or involuntarily.
Additionally, the golf club’s annual revenue is less than $25 million, while the state claims Mar-a-Lago’s correct valuation is nearly 10 times lower, “closer to $75 million,” according to the attorney general’s office.
The state also claims that more than a dozen rent-stabilized apartments on Trump Park Avenue, also in Manhattan, are listed in company filings as worth more than $49.5 million, Trump’s company said. In fact, the lawsuit alleges, their total value was $750,000.
Why are Donald Trump Jr., Ivanka Trump and Eric Trump named in the lawsuit?
The complaint alleges that Trump’s three children were “familiar with, responsible for, and exploited” fraudulent representations of their financial situation to benefit the company. It claims they oversaw transactions at the heart of many of the lawsuits.
How much is New York seeking damages (also known as disgorgement)?
James’ office is seeking $250 million in New York state coffers. The complaint describes the figure as an estimate of the company’s earnings from the so-called scheme.
What other punishment does New York want to impose on Trump and his company?
James’ office asked a judge to revoke the Trump Organization’s business credentials, effectively barring it from doing business in New York.
Her office is seeking a permanent ban on Trump, Donald Trump Jr. and Ivanka Trump from serving as officers or directors of any New York business, including their family’s.
The state also asked for a five-year ban on Trump and his companies from buying real estate in New York or applying for loans from any New York-based company.
Can a company re-register outside of New York?
Asked about this at a news conference on Wednesday, James replied that doing so would not affect the lawsuit in her office, which is the center of the company’s operations.
“Mr. Trump, the Trump Organization and his family will still have to deal with this complaint. They have to respond,” James said. “They’re going to have to respond to the allegations in it. If he decides to move to Florida, the reality is that he still has to deal with the great state of New York.”
Will Trump or others go to jail for this?
No, at least not directly from Wednesday’s action. James’ office filed the lawsuit, seeking only civil penalties. However, she said at a news conference that the investigation uncovered “criminal conduct,” referring her office to federal law enforcement in the Southern District of New York and the IRS.
Has Trump responded?
On his social media site, Trump called James a “failed” attorney general and accused her of driving businesses out of New York. “Goodbye,” he wrote.
In a statement to CBS News, Donald Trump’s attorney, Alina Haba, said, “Today’s document focuses neither on the facts nor the law — but only on advancing the Attorney General’s political agenda.”
“It is very clear that the Attorney General’s Office has gone beyond its statutory authority to snoop on transactions where absolutely no wrongdoing has taken place,” Haba said. “We are confident that our judicial system will not tolerate this unchecked. abuse of power, and we look forward to defending our clients against every baseless charge of the Attorney General.”
Trump Jr. tweet“Letitia James doesn’t care about the law. She’s a Democratic activist and only cares about politics.” He added, “That’s politics, that’s all.”