New York Attorney General Letitia James slapped former President Donald Trump, three of his children and The Trump Organization with a massive financial fraud suit Wednesday.
The suit – filed in state court – was the culmination of a three-year investigation by James’ office into the business practices of Trump and his company over the past decade. It alleges the former president misrepresented his income, inflating it by billions of dollars, to get more favorable bank loans, better insurance rates and tax benefits for the Trump Organization.
The suit alleges Trump did this with the help of his children – Ivanka Trump, Donald Trump Jr. and Eric Trump – as well as other top Trump Organization honchos including Chief Financial Officer Allen Weisselberg and Comptroller Jeffrey McConney.
“The complaint demonstrates that Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and to cheat the system, thereby cheating all of us,” James told reporters at her lower Manhattan office Wednesday.
“Mr. Trump and The Trump Organization repeatedly and persistently manipulated the value of assets to induce banks to lend money to the Trump Organization at more favorable terms than would otherwise have been available to the company to pay lower taxes to satisfy continuing loan agreements and to induce insurance companies to provide insurance coverage for higher limits and at lower premiums,” she added.
James said Trump and his company’s alleged conduct violated New York Executive Law 63(12), which gives the state AG broad authority to hold those who commit repeated and consistent fraud accountable. In this case, Trump’s illegal conduct includes submitting false financial statements, falsifying business records and committing insurance fraud.
James’ office has also referred the findings of its investigation to the U.S. Attorney’s Office for the Southern District of New York and the federal Internal Revenue Service. She said this move isn’t about forcing the hands of the federal government to open criminal investigations into Trump but rather to present the findings her office uncovered.
“It’s a question of presenting to them evidence, which we believe suggests illegality and suggests that he was engaging in a number of schemes to benefit himself, his corporation and his family,” James said.
The suit is asking the court to permanently block Trump and his three children, who were named in the legal action, from serving as a director or officer in any corporation or similar business licensed in New York. James is also seeking to prevent Trump and his company from acquiring real estate or applying for loans from any institution in the state for five years.
On top of that, James said, the suit seeks to compel Trump and his company to pay back the estimated $250 million accrued through the alleged illegal activity. And to appoint an independent monitor to oversee the Trump Organization’s business practices for five years.
“This is an attempt to seek redress for the taxpayers. of the great state of New York for individuals in the great state of New York,” James said. “And he could reconstruct, reorganize a number of these corporations. But the relief that we are seeking from this judge is again for him to reform his practices in the state of New York and to prohibit him from engaging in any real estate commercial transactions in the state of New York going forward.”
None of the actions the suit is seeking will need to be ordered by a judge in order to go into effect, James said.
Team Trump was quick to label the lawsuit as politically motivated. In a pair of tweets, Donald Trump Jr. called the suit a continuation of a “witch hunt” and wrote James is bringing the legal action to benefit the Democratic Party.
“Letitia James doesn’t care about the law,” he wrote. “She’s a Dem activist, who only cares about politics.”
Trump’s attorney, Alina Habba, echoed the idea that James’ investigation is baseless and politically motivated.
“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 each and every one of the Attorney General’s meritless claims.”
Updated at 2:47 p.m. on Sept. 21, 2022.