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Donald Trump, Adult Children Sued by New York Attorney General for Fraud

The lawsuit was civil, meaning it did not involve criminal charges. But the attorney general said she was referring allegations of criminal wrongdoing to federal prosecutors in Manhattan and the IRS for investigation.

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New York: Former US President Donald Trump and his adult children were sued on Wednesday for what New York state’s attorney general called numerous acts of fraud and misrepresentation, accused of misstating the values of real estate properties to obtain favourable loans and tax benefits.

The lawsuit, filed in a New York state court in Manhattan, accused the Trump Organization of wrongdoing in preparing Trump’s annual statements of financial condition from 2011 to 2021. It also named as defendants the Trump Organization – a family company that manages hotels, golf courses and other real estate around the world – as well as the former president’s sons Donald Trump Jr. and Eric Trump and his daughter Ivanka Trump.

Attorney General Letitia James, a Democrat, said her office uncovered more than 200 examples of misleading asset valuations, and the complaint mentioned 23 assets that she called “grossly and fraudulently inflated.”

The lawsuit was civil, meaning it did not involve criminal charges. But James said she was referring allegations of criminal wrongdoing to federal prosecutors in Manhattan and the Internal Revenue Service for investigation.

“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 at a news conference.

“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,” James said, referring to the title of a 1987 book written by Trump.

The lawsuit marks one of the biggest legal blows for the Republican businessman-turned-politician since he left office in January 2021.

Trump is considering running again for president in 2024.

The lawsuit accused Trump of inflating his net worth by billions of dollars to induce banks to lend money to his company on more favourable, to satisfy continuing loan terms, to coax insurers to provide coverage for higher limits at lower premiums, to gain tax benefits and other purposes.

James is seeking to permanently bar Trump and his three children named as defendants in the case from serving as an officer or director in any New York corporation, prohibit Trump and the Trump Organization from entering into any New York real estate acquisitions for five years and award disgorgement of all financial benefits gained fraudulently – estimated to total $250 million.

James has been conducting a civil investigation into Trump’s business practices for more than three years.

“The Attorney General’s Office has exceeded its statutory authority by prying into transactions where absolutely no wrongdoing has taken place,” Alina Habba, a lawyer for Trump, said in a statement, calling the accusations “meritless.”

Trump has denied any wrongdoing and described James’ probe as a politically motivated witch hunt.

James said her office rejected settlement offers submitted by the defendants, but said “our doors are always open” for future negotiations.

Wednesday’s lawsuit followed a contentious investigation in which James accused Trump, his company and some family members of using delay tactics to ignore subpoenas and avoid testifying.

Trump on August 10 declined to answer questions in a lengthy, closed-door deposition at the office of the attorney general, invoking his constitutional right against self-incrimination more than 400 times.

Donald Trump Jr. and Ivanka Trump agreed to sit for depositions only after court decisions required it.

Eric Trump invoked the right against self-incrimination more than 500 times in a 2020 deposition.

Trump has been beset with legal troubles since leaving the White House.

The FBI conducted a search of his Mar-a-Lago estate in Florida on August 8 as part of a criminal investigation into his handling of presidential records including classified material.

Trump also faces a criminal investigation in Georgia over his efforts to overturn the 2020 election results.

He has denied wrongdoing in the various probes.

James’ civil probe is separate from a criminal tax fraud probe against the Trump Organization by Manhattan’s district attorney, Alvin Bragg.

The company is scheduled to stand trial in October, accused of paying off-the-books benefits to employees. Its former longtime chief financial officer, Allen Weisselberg, has pleaded guilty and will testify against the company.

James is assisting Bragg in his criminal probe.