Investigation against Trump in New York: State Attorney General released details of the case

New York State Attorney General Letitia James on January 18 accused the Donald J. Trump family business of repeatedly misrepresenting the value of its assets to boost profits. In court documents, she said the company engaged in "fraudulent or misleading" practices. New York Times.

The application was filed in response to Trump's recent attempt to thwart James interrogate him and his two adult children under oath as part of a civil investigation into his business, the Trump Organization. James's investigation into Trump and the company is ongoing, and it's unclear if her lawyers will eventually file a lawsuit against them.

However, the filing was the first time that the Attorney General's Office had made such specific allegations against the former president's company. Her fuse increases the pressure on Trump, who is trying to stop her investigation. He called the investigation a witch hunt. Letitia James is a Democrat.

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In the document, lawyers set out what James's office called misleading claims about the value of six Trump properties, as well as the "Trump brand." Properties included golf clubs in Westchester County, New York, and Scotland, flagship buildings such as 40 Wall Street in Manhattan, and Trump's own penthouse at Trump Tower.

Detailed summary from Attorney James

James's statement alleged that the company misreported the value of the property to lenders, insurers and tax service. The statement claimed that many of the claims were "generally exaggerated as part of a template to suggest that Trump's net worth was higher than it might otherwise appear."

James went into detail about how she said the company inflated valuations: a $150 entry fee to Trump Golf Club in Westchester that the company never received. Mansions that have not yet been built on one of his private estates; and 000 square meters in his triplex Trump Tower, which did not exist.

It is unusual for such specific and serious allegations to appear in court documents filed less than an hour before the midnight deadline to respond to Trump's attempt to avoid interrogation, rather than in a formal complaint. Lawyers for James said that releasing the details would not interfere with their investigation. They added that the office is also looking into other actions not mentioned in the documents.

Lawyers for Trump and his company did not respond to requests for comment.

Separate James office investigation

Because James's investigation is a civil one, she can sue Trump and his company, but she can't bring criminal charges. Her investigation is running in parallel with a criminal investigation led by Manhattan District Attorney Alvin Bragg, who is investigating some of these activities. Office James is involved in a separate investigation that is ongoing. Bragg, also a Democrat, took over the investigation from his predecessor upon taking office Jan. 1.

In early December, James sent a subpoena for Trump, as well as for Donald Trump Jr. and Ivanka Trump. It was an attempt to interrogate them as part of his civil investigation. James had already interrogated another Trump son, Eric Trump, in October 2020. He exercised his Fifth Amendment right against testifying against himself in response to more than 500 questions, a new court document says.

After receiving the subpoena, Trump's lawyers filed a federal lawsuit demanding that the civil investigation of James be stopped and that her office be barred from participating in the district attorney's criminal investigation. The lawsuit accused James of violating Trump's constitutional rights. It has also been claimed that her investigation was politically motivated and a long list of her public attacks on Trump has been cited.

James accuses Trump of multiple misrepresentations

This month, Trump's lawyers also filed paperwork in a court in New York State in an attempt to prevent James from being subpoenaed, prompting her to file on Jan. 18.

James, who is running for re-election this year, argued in court documents that while her office has collected evidence of possible fraud by Trump's company, investigators need to question Trump to determine who is responsible for "the numerous misrepresentations and omissions made by him or on his behalf” — and whether they were intentional.

Guilt can be difficult to prove. Property valuations are often subjective, and Trump's lawyers are likely to note that his lenders and insurers — sophisticated financial institutions that profited from their relationship with the Trumps — did not rely on the company's valuations.

James has been investigating Trump's business practices since March 2019. In previous papers, she described some of the properties that she carefully studied. She said her investigators are looking into whether Trump inflated the cost to secure loans and obtain economic and tax breaks.

In a January 18 statement, she went even further, citing examples in which she said the former president's business misrepresented the value of some of its properties. James showed how these claims benefited the company, allowing for soft loans, insurance coverage, and tax breaks.

The allegations focus on Trump's financial statements, annual statements of his assets and liabilities that he has turned over to creditors and insurers.

Trump's lawyers are likely to point to caveats in these claims that the data has not been verified or authenticated. But James's office said he was "personally involved in reviewing and approving the financial statements prior to their release."

Property valuations were intentionally inflated

For example, in 2015, while trying to refinance a loan for his tower at 40 Wall Street in Lower Manhattan, Trump estimated the value of the property at $735 million in a statement of financial position. However, one lender concluded that it was worth only $257 million.

A year earlier, Trump valued his Aberdeenshire Golf Club in Scotland at $435 million. But that estimate was inflated, according to James, thanks in large part to the Trump Organization's mistaken assumption that it could build 2500 luxury homes on the site. In fact, she had permission to build less than 1500 "vacation apartments", residences and golf villas.

And for years, the statement claimed, the Trump company included the value of Trump's personal brand in some of its golf club estimates, despite claiming it wasn't.

Although James hasn't demonstrated that the company has benefited from every valuation. Her filings alleged that the company had grossly inflated its assets, which may have provided creditors with an overly rosy picture of Trump's finances.

Lawyers for James also alleged that Trump submitted at least two misleading statements to the IRS. According to them, he significantly inflated the value of the land at both his Seven Springs estate in Westchester County and his golf club in Los Angeles. The value of Seven Springs, according to James, was boosted by counting the cost of seven defunct mansions said to be worth $61 million. Trump received millions of dollars in tax credits for both properties.

Blame the Trump Organization

Investigators accused the Trump Organization of calculating the cost of the Trump Tower by falsely inflating the size of Trump's longtime home. Although Trump has said since 2012 that his three-story penthouse in the building is 2800 square meters, he has signed documents that say it measures 1020 square meters.

The extra square footage allowed the company to post a value of $327 million on its financial statements. James said that Allen H. Weisselberg, the Trump Organization's longtime CFO, said during interrogation by James investigators that the apartment had been inflated, give or take, by $200 million.

The lawsuit alleges that Weisselberg also falsely told one of Trump's insurance companies that the property's valuation was based on estimates from professional appraisers, when that was not the case. In fact, "Estimates were prepared by Trump Organization staff," the statement said.

Trump's companies have already been indicted in Manhattan. In July, former Manhattan District Attorney Cyrus R. Vance, Jr. accused the company and Weisselberg of running a 15-year scheme to give informal perks to certain executives. This case is due to go to trial at the end of this year.