New York Attorney General Letitia James filed a lawsuit Wednesday that accuses former President Donald Trump and his adult children of manipulating the value of his business assets to borrow money on more favorable terms, pay lower insurance premiums and face lower taxes.
Ms. James, a Democrat, said Mr. Trump, his family and his business submitted false documents and that she believes it violated state and federal laws. She said she is referring the cases to state and federal prosecutors. The lawsuit, filed in state court in New York, is the culmination of Ms. James‘ three-year civil investigation of Trump and the Trump Organization.
A criminal probe that ran parallel to Ms. James‘ long-running inquiry ran into hiccups months ago, when Manhattan District Attorney Alvin Bragg allowed a grand jury to expire instead of pursuing an indictment against the former president.
Ms. James said the Trump family, aided by Trump chief financial officer Allen Weisselberg, knowingly reviewed and approved financial statements that were fraudulent. Weisselberg recently pleaded guilty in a separate tax fraud case led by the Manhattan District Attorney’s office against the Trump Organization. That trial is set to begin in October.
“Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and cheat the system, thereby cheating all of us,” Ms. James said. “He did this with the help of his other defendants, his children.”
Ms. James said in one instance of “deliberate fraud,” Mr. Trump inflated the value of his apartment by listing it as 30,000 square feet instead of its actual size of 11,000 square feet.
“Something that Mr. Trump was well aware of,” Ms. James said.
She said the false size resulted in an evaluation of the apartment of $327 million, even though no apartment in the city has ever sold for that amount.
Ms. James said her 280-page lawsuit includes “astounding” violations of the law involving nearly two dozen holdings.
“It includes examples from 23 assets that were grossly and fraudulently inflated,” Ms. James said.
Ms. James said Mr. Trump and his children — Donald Trump Jr., Eric Trump and Ivanka Trump — should be suspended from certain corporate activity in New York and from seeking new loans from any New York-registered financial institution for five years.
The lawsuit also seeks to recover more than $250 million in what Ms. James says are ill-gotten gains earned through deceptive business practices.
The lawsuit is not a criminal prosecution, but Ms. James said she referred potential violations of federal law to the Justice Department and IRS.
Alina Habba, a lawyer for Trump, said the lawsuit is solely focused on advancing Ms. James’ political agenda and not the facts or the law.
“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,” she 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.”
Mr. Trump was less tactful, calling Ms. James “a racist” and taunting her failed gubernatorial bid.
“I never thought this case would be brought – until I saw her really bad poll numbers. She is a fraud who campaigned on a ‘get Trump‘ platform, despite the fact that the city is one of the crime and murder disasters of the world under her watch!,” he posted on his Truth Social platform.
The suit follows Ms. James’ inquiry into the former president and his business practices. She said the probe involved 65 witnesses and millions of documents and noted that Mr. Trump invoked his Fifth Amendment privilege when pressed about the accusations.
Her probe involved a lengthy back-and-forth court battle with Mr. Trump and his adult children over depositions and documents.
His son, Donald Trump Jr., on Twitter dismissed the probe as a “bulls— Dem witch-hunt.”
Liberal groups hailed Ms. James’ strong action against Mr. Trump, saying it was long overdue.
“Donald Trump and his family have run a corrupt enterprise for years. Even before his presidency, Trump apparently did everything in his power to profit from the Trump Organization while keeping those he went to for loans and insurance in the dark about his company’s true financial position,” said Noah Bookbinder, president of Citizens for Responsibility and Ethics in Washington. “If his co-opting of the federal government as essentially a subsidiary of the Trump Organization was not bad enough, Trump appears to have committed repeated fraudulent acts, illegally inflating the value of his company to benefit the company and himself.”
Some of Trump‘s GOP allies stepped up to defend the former president. Rep. Andy Biggs, Arizona Republican, accused Ms. James of “weaponizing” her office to take down political opponents.
Ms. James announced a run for governor in the fall of 2021 but dropped out of the race two months later, deciding instead to seek another term as state attorney general.
Mr. Trump faces other legal headaches, including a federal probe into his actions following the 2020 election and the run-up to the Jan. 6, 2021, attack on the Capitol by his supporters. Prosecutors are reportedly interested in an attempt to put forth so-called fake electors that would have given swing-state votes to Mr. Trump instead of President Biden.
Federal investigators and Mr. Trump‘s attorneys also are sparring over the nature of documents found at the former president’s Florida estate.
A special master is charged with poring over the documents and their classification, as the Department of Justice presses an appeals court to let it resume its probe into possible violations of the Espionage Act and obstruction of justice.