New York attorney general Letitia James sued Donald Trump, along with family members and employees, on Sept. 21, alleging “numerous acts of fraud and misrepresentation” in the Trump Organization’s annual financial statements from 2011 to 2021.
In the lawsuit (pdf) filed in New York state court, James brought civil charges and recommended the US Department of Justice bring criminal charges against Trump and his associates. James alleges Trump “grossly inflated” his net worth by billions of dollars each year to get loans for his business and more favorable insurance policies. Trump’s children—Ivanka, Eric, and Donald Jr.—are all named as co-defendants along with Trump Organization finance chief Allen Weisselberg and controller Jeffrey McConney. Trump’s attorney Alina Habba said the lawsuit is “neither focused on the facts nor the law” but rather “advancing the Attorney General’s political agenda.”
In suing, James wants to collect $250 million in civil damages and essentially bar Trump and the Trump Organization from doing business in New York.
Here are the most egregious allegations levied against Trump in the lawsuit:
In 2011, Trump allegedly valued his triplex apartment in Trump Tower at $80 million, but four years later he reported a 400% increase in valuation to $327 million. “That price was absurd given the fact that at that point only one apartment in New York City had ever sold for even $100 million, at a price per square foot of less than $10,000,” the lawsuit says. This valuation estimated the apartment’s value at $29,738 per square foot. The property was also listed at more than 30,000 square feet when it was really about 11,000 square feet. Trump only lowered his size and valuation estimates of the triplex when Forbes published a 2017 article titled, “Donald Trump Has Been Lying About The Size Of His Penthouse.”
Trump’s Mar-a-Lago estate in Palm Beach, Florida, is restricted for development under a conservation easement Trump made in the 1990s. Conservation easements are tax breaks in exchange for limitations on how the land can be developed and used. Under the agreement, the property can only be used a social club, but the Trump Organization valued it like it could be sold to a single homeowner, which raised its estimated price. The New York Times previously reported that conservation easements for multiple Trump properties have netted the former president about $100 million in tax breaks. But the government alleges that on financial statements Trump did not value the property based on the conservation easement’s development restrictions, and that he also lied about its price-per-acre valuation.
On financial statements valuing one of his golf courses in Westchester County, New York, Trump accounted for 67 unsold memberships that would go for a $200,000 initiation fee—an anticipated $13 million windfall—even though Trump was regularly waiving and reducing such initiation fees to boost membership at the course.
This was one tactic Trump allegedly used to inflate the value of his golf courses and resorts.
Deutsche Bank is the Trump Organization’s single largest financier and the complaint says that, as of May 2022, the organization owes the bank $340 million and regularly pays tens of millions each year toward that debt.
James claims that Trump and the Trump Organization fraudulently inflated the value of their assets in order to guarantee and secure loans to buy the Old Post Office building in Washington, D.C. (a $170 million loan); a resort in Doral, Florida (a $125 million loan); and a hotel in Chicago (a $45 million loan).
Deutsche Bank offered Donald Trump and Donald Trump Jr. “unparalleled rates” on loans since they were personally guaranteed by Trump. “It doesn’t get better than this,” Ivanka Trump wrote in an email after viewing the terms of a loan.
The government alleges that the Trump Organization saved between $85 and $150 million because of these favorable interest rates. James also revealed today that Deutsche Bank has cooperated with her office during the investigation.