The Trumps and their company are accused in a 221-page civil complaint filed Wednesday of participating in a year-long scheme to enrich themselves by inflating the values of a wide variety of properties, spanning 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 inaccurate methods with the intent and purpose of falsely and fraudulently inflating Mr. obtain financial terms from lenders and insurers.”
“The number of highly inflated asset values is staggering, affecting most if not all real estate holdings in any given year,” the office of New York State Attorney General Letitia James wrote in his complaint. James said the valuations helped inflate Trump’s wealth “by billions of dollars.”
What were some of the “grossly inflated asset values”?
The state claims that Trump’s own triplex apartment in Manhattan was appraised based on the claim that it was 30,000 square feet in size. But it’s actually 10,996 square feet. The former president reported in his 2015 and 2016 financial statements that the Trump Tower apartment was worth $327 million, based on its 30,000 square feet. Allen Weisselberg, CFO of the Trump Organization, admitted to the attorney general that the value had been overestimated by $200 million, “give or take.”
The New York Attorney General’s office also questions the valuation of Mar-a-Lago, the former president’s Florida home. It was valued at $739 million, the state said in its lawsuit, based on the idea that the property was unrestricted and could be developed for residential use. However, Trump signed deeds “granting his residential development rights, sharply restricting changes to the property, and restricting the permitted use of the property to a social club.”
The state lawsuit notes that Trump has signed an agreement with Palm Beach that says “that”[t]the use of the land will be for a private social club’ and that ‘[t]The land, as described herein, shall be deemed to be one (1) parcel of land and no portion thereof may be sold, transferred, designed or assigned, except in its entirety, voluntarily or involuntarily, by operation of law or otherwise.'”
Further, according to the attorney general’s office, the golf club’s revenues were less than $25 million a year, and the state claims Mar-a-Lago’s correct valuation was nearly 10 times less,” closer to $75. million.”
The state also alleges that Trump’s company said a dozen rent-stabilized apartments on Trump Park Avenue, also in Manhattan, were listed on company records as worth more than $49.5 million. In fact, the suit says, they were valued at a combined $750,000.
Why are Donald Trump Jr., Ivanka Trump and Eric Trump named in the lawsuit?
The complaint alleges that the three Trump children “knew, were responsible for, and used” fraudulent statements about financial terms to benefit the company. It claims they oversaw many of the deals that were central to the lawsuit.
How Much Does New York Claim Compensation (aka Disgorgement)?
James’s office is demanding $250 million to be donated to the New York treasury. The complaint describes that figure as an estimate of the company’s benefits from the alleged scheme.
What other penalties does New York want to impose on Trump and his company?
James’ office is asking a judge to revoke the Trump Organization’s corporate certificate, effectively barring it from doing business in New York.
Her office is trying to find Trump, Donald Trump Jr. and permanently ban Ivanka Trump from serving as officers or directors of any New York company, including the family business.
The state is also asking for a five-year ban on Trump and the company from acquiring New York real estate or applying for loans from a New York-based company.
Can’t the company just be re-established outside of New York?
When asked during a news conference on Wednesday, James replied that it would not affect her office’s lawsuit, which was filed while New York was at the center of 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 that he is still dealing with the great state of New York.”
Can Trump or others go to jail for this?
No, at least not directly from Wednesday’s action. James’ office has filed a lawsuit seeking only civil penalties. However, she said at her press conference that the investigation revealed “criminal behavior,” which her office refers to federal law enforcement in the Southern District of New York and the Internal Revenue Service.
Has Trump responded?
On his social media site, Trump called James a “failed” attorney general and accused her of driving companies out of New York. “Goodbye,” he wrote.
Alina Habba, an attorney for Donald Trump, said in a statement to CBS News that “Today’s filing is not focused on the facts or the law — rather, it is solely focused on advancing the attorney general’s political agenda. ”
“It is abundantly clear that the Attorney General has exceeded his legal authority by entering into transactions where absolutely no wrongdoing has occurred,” Habba said. “We are confident that our legal system will not withstand this unchecked abuse of power, and we look forward to defending our client against any of the Attorney General’s baseless claims.”