New York State’s attorney general filed a sweeping lawsuit Wednesday against former President Donald Trump, three of his grown children and the Trump Organization, alleging their involvement in a sprawling fraud that spanned more than a decade that the former president used to enrich himself.
In the more than 200-page lawsuit, Attorney General Letitia James, a Democrat, alleges that the fraud touched every aspect of the Trump business, including his properties and golf courses. According to the lawsuit, the Trump Organization defrauded lenders, insurers and tax authorities by inflating the value of its assets using misleading appraisals.
“These acts of fraud and misrepresentation were of a similar nature, as part of a joint effort by senior management of the Trump Organization for each annual Statement, and were approved at the highest levels of the Trump Organization, including Mr. Trump himself,” the lawsuit says.
Trump and his children, Donald Trump Jr., Eric Trump and Ivanka Trump, have been named as defendants. Allen Weisselberg, the former chief financial officer of the Trump Organization, and Jeff McConney, another longtime company executive, are also named.
James said he believed state and criminal laws were violated and referred the matter to the U.S. attorney’s office for the Southern District of New York and the Internal Revenue Service.
James is seeking $250 million in allegedly ill-gotten funds and to permanently bar Trump and the children named in the suit from being directors of a business registered in New York State. It seeks to revoke the Trump Organization’s corporate certification, which, if granted by a judge, could force the company to cease operations in New York state.
Trump called James a “renegade prosecutor” and said he is conducting a “vindictive, self-serving fishing expedition.” The Trump Organization called his previous accusations “baseless” and denied wrongdoing.
In response to Wednesday’s announcement, Trump’s attorney Alina Habba said in a statement to CNN: “Today’s filing is focused on neither the facts nor the law, but is focused solely on advancing the attorney general’s political agenda. It is clear that the attorney general has exceeded his statutory authority to do nothing wrong. entering into transactions”.
Weisselberg’s lawyer, Nicholas Gravant, declined to comment.
As the civil case comes under increasing legal pressure from Trump, prosecutors are taking investigative steps closer to his inner circle.
Trump faces multiple criminal investigations by federal and state prosecutors into the accuracy of his company’s financial statements, meddling in the 2020 presidential election and his handling of classified documents after leaving office. Trump has denied wrongdoing.
James says the former president and his company made “numerous fraudulent, false and misleading statements” over a 10-year period, according to the lawsuit, which specifically highlighted what he called “200 false and misleading valuations” of Trump’s assets.
“The mentioned financial statements were made every year; each contained a significant amount of fraudulent, false and misleading representations about many assets of the Trump Organization; and most of them had a role in particular transactions with financial institutions,” the lawsuit alleges.
According to James, Trump’s businesses prepared statements of financial condition to be submitted annually to banks and other financial institutions. The statements showed the financial health of Trump’s businesses, James said, and were relied upon if the Trump Organization wanted to apply for loans.
Each statement was personally verified by Donald Trump, Donald Trump Jr. or Weisselberg, James said at a news conference in New York on Wednesday.
Trump “made it known” that he “wanted his net worth to be reflected in those statements,” James said, “a desire that Mr. Weisselberg and others have carried out year after year in the fraudulent preparation of those statements.”
“When asked about these meetings under oath as part of our deposition, both men, Mr. Trump and Mr. Weisselberg, asserted their Fifth Amendment privilege against self-incrimination and declined to answer,” James added.
“When asked under oath whether Mr. Trump continued to review and approve the statements after he became President of the United States in 2017, Mr. Trump again invoked his Fifth Amendment privilege and refused to answer,” James said.
The announcement is the latest development in a three-year investigation led by James into the Trump Organization’s finances.
In January, James’ office said it had found “significant” evidence that the Trump Organization used false or misleading asset valuations in financial statements to obtain loans, insurance and tax benefits. The following month, Trump’s longtime accounting firm resigned.
James’ investigation was launched in 2019 after Trump’s former fixer and personal lawyer, Michael Cohen, testified before Congress that Trump inflated the value of some assets to obtain loans and insurance and understated others to obtain tax benefits.
In addition to the new fraud case, the Trump Organization is on trial next month for its involvement in a 15-year tax fraud scheme and its longtime chief financial officer has agreed to testify against the company.
Weisselberg, who served as the Trump Organization’s chief financial officer for decades, pleaded guilty in August to his role in a 15-year tax avoidance scheme and agreed to testify against Trump’s real estate company as part of the deal. in the trial
In recent weeks, the Trump Organization offered to settle the case to drop it, although it denied wrongdoing, but James’ office made it clear it was not interested in a settlement, people familiar with the matter said.
In April, after a long battle to enforce subpoenas for statements from Trump and his adult children, lawyers in James’ office said they were nearing the end of their investigation and needed the Trumps’ testimony before making a decision.
Last month, Trump refused to answer questions and asserted his Fifth Amendment right against self-incrimination when the attorney general’s office withdrew it. Eric Trump, who runs the business on a day-to-day basis, also invoked his Fifth Amendment right in 2020, answering more than 500 questions.
Because Trump and Eric Trump have refused to answer questions, if the case goes to trial, a jury could draw an “adverse inference” against them for not answering questions. This could result in a larger lawsuit against them or the company if they are found liable.
Ivanka Trump and Trump Jr. answered questions during the more than seven-hour conversation, sources told CNN.
This story has been updated with additional details.