June 10, 2023

  • New York Attorney General Leticia James’ office sued Trump, his children and his businesses.
  • “Trump falsely inflated his wealth by billions of dollars to further enrich himself and cheat the system,” James’ office said.
  • James is seeking to permanently bar Trump from conducting business in New York and fine him $250 million.

New York’s attorney general filed a sweeping civil suit Wednesday against former President Donald Trump, his businesses and his three grown children.

James is seeking to permanently bar Trump from conducting business in New York and fine him $250 million. The state attorney general’s office is seeking to appoint an independent monitor to “oversee compliance, financial reporting, valuation and disclosure to the Enders, Insurance and Tax Authorities of the Trump Organization” for at least five years.

“Trump falsely inflated his net worth by billions of dollars to further enrich himself and cheat the system,” NY AG Leticia James’ office said.

“Mr. Trump and the Trump Organization have repeatedly and consistently manipulated asset prices to induce banks to lend money to the Trump Organization,” James said at a news conference Wednesday announcing the civil action.

He continued: “The fraudulent activity allowed the Trump Organization to obtain more favorable loan terms than would otherwise have been available, pay lower taxes, and induce insurance companies to provide coverage for higher limits at lower premiums.”

James said Wednesday that his office believes the conduct described in the civil suit “violates federal criminal statutes, including making false statements to financial institutions and bank fraud.” He said state investigators will refer the matter to the U.S. Attorney’s Office for the Southern District of New York and the Internal Revenue Service.

The case is the culmination of an aggressive, three-year investigation by James, who campaigned in 2018 in part on a promise to investigate and prosecute Trump and his New York-controlled real estate and golf resort empire.

In April, state Supreme Court Justice Arthur Ngoron held Trump in contempt of court and eventually fined him $110,000 a day for failing to comply with subpoenas for his personal business documents.

Ngoron also advocated for James to comply with his subpoenas for Trump and his two older children to testify. Trump invoked the fifth nearly 400 times when he was ousted by James and lawyers for his office last month.

James on Wednesday accused the Trump Organization of issuing financial statements that were in “clear violation” of accepted accounting principles.

“Despite the representation that these statements were prepared in accordance with these principles, one of the common tricks they used was to represent that Mr. Trump had cash on hand that he did not have,” he said.

Many of the fraud allegations in the lawsuit center on Trump’s statements of financial status over 10 years. These are annual lists of Trump’s individual skyscrapers, hotels, golf resorts, branding deals and the like; Trump has used these allegedly inflated valuations to influence banks and other interests.

The authenticity of these statements — which were either signed by Trump, or, after 2017, by Eric Trump — has been publicly questioned since former presidential fixer-critic Michael Cohen recalled the statements from 2011 to 2013 as part of his testimony. Before Congress in 2019.

James alleged that Cohen’s testimony about the statement was the impetus for his investigation. Even Trump’s now-former accounting firm, Mazars USA, which produced the statements for decades, said in February “the documents should no longer be relied upon.”

Mazars retracted the statement after James’ office repeatedly called it “materially incorrect.”

That information included the size of his Trump Tower penthouse, which Trump claimed was three times the actual square footage.

Trump also overstated his liquidity — the amount of cash on hand — and artificially inflated some of his valuations by an undisclosed flat percentage for “brand” value, even though the statement made clear that brand value was not factored in.

Trump, for his part, insists he has committed no financial wrongdoing and has repeatedly accused the attorney general’s office of conducting a politically motivated “witch hunt.”

This story is developing. Please check back for updates.

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