NY AG says investigation into Trump and his business found ‘significant evidence’ suggesting fraud
New York Attorney General Letitia James disclosed new details Tuesday night about her civil investigation into former President Donald Trump’s business, saying the probe has uncovered evidence suggesting the company put fraudulent values on multiple assets and misrepresented those values to financial institutions for economic benefit.
James, who launched her investigation in 2019, also said in the court filing that the former president “had ultimate authority over a wide swath of conduct by the Trump Organization” that involved fraudulent misstatements to financial institutions, the IRS and other parties.
She specifically mentioned the responsibility of two of the former president’s adult children, Donald Trump Jr. and Ivanka Trump.
“Since 2017, Donald Trump, Jr. has had authority over numerous financial statements containing misleading asset valuations,” James wrote in the court filing.
Ivanka Trump, a former White House adviser, “was a primary contact for the Trump Organization’s largest lender, Deutsche Bank,” James wrote. “In connection with this work, Ms. Trump caused misleading financial statements to be submitted to Deutsche Bank and the federal government.”
James said in a statement Tuesday: “Thus far in our investigation, we have uncovered significant evidence that suggests Donald J. Trump and the Trump Organization falsely and fraudulently valued multiple assets and misrepresented those values to financial institutions for economic benefit. The Trumps must comply with our lawful subpoenas for documents and testimony because no one in this country can pick and choose if and how the law applies to them.”
Her office added that it “has not yet reached a final decision regarding whether this evidence merits legal action.”
James is conducting a civil investigation into whether the Trump Organization committed fraud in reporting the value of certain properties to banks and tax authorities.
Banks and other lenders need to know the precise financial condition of loan applicants before they make loans. If a company overstates its financial condition to get a loan, making its finances seem rosier than they really are, that can be considered fraud. The filing says Trump’s financial statements “were generally inflated as part of a pattern to suggest that Mr. Trump’s net worth was higher than it otherwise would have appeared.”
Tuesday’s filing is in response to legal efforts by the former president to quash a series of subpoenas against him, Donald Trump Jr. and Ivanka Trump. James is seeking an order to compel all three to appear for sworn testimony.
The filing says there have been problems with valuations in statements that have not been explained by the Trump Organization.
In financial statements, the value of the former president’s apartment in Trump Tower in New York City was based on an assertion that the space was 30,000 square feet, when documents show that the apartment was 10,996 square feet, the attorney general’s office said.
Former Trump Organization Chief Financial Officer Allen Weisselberg conceded in a deposition that that resulted in an overstatement of around $200 million, the filing said.
James’ office also said evidence indicates that the value of land donations in Los Angeles and Westchester County, New York, was overstated, resulting in several million dollars in deductions.
In response to the court filing, a spokesperson for the Trump Organization said “the allegations are baseless and will be vigorously defended.”
Alan Futerfas, an attorney speaking on behalf of Donald Trump Jr. and Ivanka Trump, responded in a statement Wednesday saying: “In 160 pages of legal briefing, the Attorney General’s Office deliberately fails to address Ms. James’s repeated threats to target the Trump family and her assertions about her criminal investigation — all which are the essence of our motion to quash the subpoenas or stay them.”
The state attorney general is assisting a separate Manhattan district attorney criminal investigation into allegations of tax fraud schemes at Trump’s company.
Because of that, lawyers for Ivanka Trump, Donald Trump Jr. and their father have opposed the subpoenas from James’ office, arguing they are improper.
The state attorney general “is engaged in a criminal investigation that has an active grand jury. It cannot issue subpoenas for testimony under the guise of a civil investigation that will immediately become available” to its own criminal investigation, the Trumps’ attorneys argued in their motion to quash the subpoenas.
Attorneys for the former president did not immediately respond to requests for comment Wednesday.
Ronald Fischetti, an attorney for Trump, said last month: “They have been investigating this for three years. We are not concerned about it, because he has done nothing wrong.”