Trump and children sued for fraud by NY attorney-general

Values of 23 assets of Trump Organisation were 'grossly and fraudulently inflated'

NEW YORK - Mr Donald Trump, his family business, and three of his adult children were sued on Wednesday by New York's attorney-general, who accused them of overvaluing the former US president's assets and net worth through a decade of lies to banks and insurers.

Attorney-General Letitia James filed her civil lawsuit in a New York state court in Manhattan, accusing the Trump Organisation of "numerous acts of fraud and misrepresentation" in preparing financial statements from 2011 to 2021.

She also said Mr Trump, who has long used his net worth to burnish his image and fame as a successful businessman and politician, inflated his wealth by billions of dollars to help his company obtain favourable financial terms on transactions, including lower interest rates and cheaper insurance coverage.

The 214-page complaint also names Mr Trump's adult children - Mr Donald Trump Jr, Mr Eric Trump and Ms Ivanka Trump - as defendants, as well as long-time company executives including former chief financial officer Allen Weisselberg.

The lawsuit adds to the many legal problems Mr Trump faces.

These include a criminal probe in Georgia over his efforts to undo the 2020 presidential election, and a federal investigation into his handling of presidential records, prompting a search of his Mar-a-Lago estate by the Federal Bureau of Investigation (FBI) on Aug 8.

A federal court ruled on Wednesday that the US Justice Department can resume reviewing classified records seized by the FBI, giving a boost to the criminal investigation into whether the records were mishandled or compromised.

The Trump Organisation manages hotels, golf courses and other real estate around the world, and has been under investigation by Ms James for over three years.

Ms James, a Democrat, said the values of 23 assets have been "grossly and fraudulently inflated", and her office uncovered more than 200 examples of misleading asset valuations.

Those assets included marquee properties such as Mar-a-Lago in Florida and Mr Trump's penthouse apartment atop Manhattan's Trump Tower, Ms James said. The lawsuit seeks to recoup at least US$250 million (S$354 million) of alleged improper gains.

"Claiming that you have money that you do not have does not amount to the 'art of the deal'. It's the art of the steal," Ms James told a news conference, alluding to Mr Trump's 1987 memoir.

She called the "pattern of fraud and deception" used by Mr Trump and the Trump Organisation "astounding".

Mr Trump, in a statement posted on Truth Social, called the lawsuit "Another Witch Hunt by a racist Attorney-General" who is pursuing the case for political gain.

Ms James, who is black and running for re-election in November, wants to remove the Trumps from power at their company, and prohibit Mr Trump and his adult children from serving as corporate officers or directors in New York.

She also wants to install a monitor for the Trump Organisation, and bar the company and Mr Trump from buying commercial real estate in New York or borrowing money from state-chartered banks for five years.

The lawsuit said Mr Trump's scheme was designed to fraudulently induce banks to lend money more cheaply, coax insurers into providing coverage for higher limits at lower premiums, and obtain tax benefits.

Ms James said Mr Trump had pretended that his Trump Tower apartment was 30,000 sq ft, when it was actually just 10,996 sq ft, and that its US$327 million valuation in 2015 was "absurd" because no New York City apartment had sold for US$100 million (or more) at the time.

REUTERS

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A version of this article appeared in the print edition of The Straits Times on September 23, 2022, with the headline Trump and children sued for fraud by NY attorney-general. Subscribe