New York Attorney General Letitia James unveiled a civil fraud lawsuit against Donald Trump and his three adult children on Wednesday, marking the latest escalation of the yearslong investigation into the former president’s financial dealings in the state.
In her lawsuit, James is seeking a minimum punishment of $250 million for Trump’s alleged fraudulent business practices, pointing to evidence her office has uncovered that proves the Trump Organization violated several state laws by manipulating its asset valuations.
"This investigation revealed that Donald Trump engaged in years of illegal conduct to inflate his net worth ... to deceive banks and the people of the great state of New York,” James said Wednesday. “Claiming you have money that you do not have does not amount to the art of the deal. It’s the art of the steal.”
Here’s what the lawsuit says:
Trump embellished worth of ‘most if not all’ properties in more than 200 instances
During its yearslong investigation, the New York Attorney General’s Office uncovered evidence of Trump manipulating his company’s asset valuations in more than 200 instances over a 10-year period, according to James.
These fraudulent bank statements were given to banks and other financial entities considering entering into business with the company and included values that were purposely falsified, according to the suit. However, these documents were "personally certified as accurate by Mr. Trump or by one of his trustees,” James said.
"The pattern of fraud and deception that was used by Mr. Trump and the Trump Organization for their own financial benefit is astounding," James said.
In some cases, the Trump Organization allegedly relied on using two sets of bookkeeping records: one that was accurate but kept internally and one that listed the company’s assets as considerably higher than they actually were. These misrepresentations were used on multiple of Trump’s properties “in any given year, including several of Trump’s highest-profile business ventures,” James said.
Financial statements also misleading in ‘presentation’
Not only was the content of Trump’s financial statements factually inaccurate, but the company also allegedly falsely claimed its reports were compiled in collaboration with outside professionals.
Despite claiming the reports were completed with third parties, James said her office’s investigation uncovered that Trump repeatedly ignored advice from external entities. For example, the Trump Organization listed a commercial property on 40 Wall Street as being valued at $524 million in a 2011 statement, despite bank appraisals pegging its value at $200 million in August 2010.
“To the extent Mr. Trump and the Trump Organization received any advice from outside professionals that had any bearing on how to approach valuing the assets, they routinely ignored or contradicted such advice,” the lawsuit stated.
Trump’s adult children also played a role
James’s lawsuit also names Trump’s three adult children — Donald Jr., Eric, and Ivanka Trump — as the three have each been high-ranking executives in the company at some point.
The lawsuit specifically points to actions by all three, noting the Trump Organization’s fraudulent dealings “required” their “participation.” For Donald Trump Jr., he’s accused of preparing the company’s financial statements every year from 2016 until the present, certifying the accuracy of such reports in 2017, 2018, and 2019.
Ivanka Trump was accused of also compiling financial reports to create presentations for the General Services Administration in 2011 as well as “to facilitate loans from Deutsche Bank in 2012 and 2013,” according to the lawsuit. Eric Trump also took part in certifying financial statements that were “false in almost every particular,” the lawsuit stated.
What punishments Trump could face
If successful, James’s lawsuit would force the Trump Organization to cease its operations in New York and be barred from "entering into any New York State commercial real estate acquisition or from applying for loans" in New York for the next five years.
The lawsuit would also bar Trump and his three adult children from holding a position as an officer or director “in any corporation” in the state. Additionally, the suit would replace the trustees of the Donald J. Trump Revocable Trust and instead appoint an outside counsel to oversee the company’s financial dealings over the next five years.
James’s lawsuit was filed in civil court, meaning he won’t face criminal charges — at least not yet.
However, the New York attorney general outlined a number of state criminal laws she accuses the former president of violating that could lead to further investigations.
However, the process is expected to take months, if not years, to go through New York’s legal system before it reaches trial. The former president could still reach a settlement in the case, although previous attempts to reach a settlement over the last several months have been unsuccessful.