New York AG Says She Has ‘significant evidence’ of Trump Organization Fraud

On Tuesday night, New York Attorney General Letitia James said that former President Donald Trump’s family business misrepresented the value of its assets to obtain loans and other financial benefits, claiming her office had found “significant evidence” of fraud committed by the Trump Organization.

James made the accusations in a filing to compel Trump and his adult children Donald Trump Jr. and Ivanka Trump to testify in her civil probe into the Trump Organization’s financial dealings.

She said in a statement that evidence suggested that Donald Trump and the Trump Organization had misstated the value of six properties, including one on Wall Street and golf clubs in Scotland and Westchester County.

“We are taking legal action to force Donald Trump, Donald Trump Jr. and Ivanka Trump to comply with our investigation into the Trump Organization’s financial dealings. No one in this country can pick and choose if and how the law applies to them,” James tweeted.

“We have uncovered significant evidence indicating that the Trump Organization used fraudulent and misleading asset valuations on multiple properties to obtain economic benefits, including loans, insurance coverage, and tax deductions for years.”

James said the former president and both children “have all been closely involved in the transactions in question, so we won’t tolerate their attempts to evade testifying in this investigation.

“We will not be deterred in our efforts to continue this investigation, uncover the facts, and pursue justice, no matter how many roadblocks Mr. Trump and his family throw in our way. No one is above the law,” James added.

The court filing said state authorities haven’t yet decided whether to bring a civil lawsuit in connection with the allegations, but that investigators need to question Trump and his two eldest children as part of the probe.

Trump and his lawyers say the investigation is politically motivated.

In the court documents, Attorney General Letitia James’ office gave its most detailed accounting yet of a long-running investigation of allegations that Trump’s company exaggerated the value of assets to get favorable loan terms, or misstated what land was worth to slash its tax burden.

The Trump Organization, it said, had overstated the value of land donations made in New York and California on paperwork submitted to the IRS to justify several million dollars in tax deductions.

The company misreported the size of Trump’s Manhattan penthouse, saying it was nearly three times its actual size – a difference in value of about $200 million, James’ office said, citing deposition testimony from Trump’s longtime financial chief Allen Weisselberg, who was charged last year with tax fraud in a parallel criminal investigation.

James’ office detailed its findings in a court motion seeking to force Trump, his daughter Ivanka Trump and his son Donald Trump Jr. to comply with subpoenas seeking their testimony.

Investigators, the court papers said, had “developed significant additional evidence indicating that the Trump Organization used fraudulent or misleading asset valuations to obtain a host of economic benefits, including loans, insurance coverage, and tax deductions.”

In the court papers, James’ office said evidence shows that Trump’s company:

— Listed his Seven Springs estate north of New York City as being worth $291 million, based on the dubious assumption that it could reap $161 million from building nine luxury homes.

— Added a “brand premium” of 15% to 30% to the value of some properties because they carried the Trump name, despite financial statements explicitly stating they didn’t incorporate brand value.

— Inflated the value of a suburban New York golf club by millions of dollars by counting fees for memberships that weren’t sold or were never paid.

— Valued a Park Avenue condominium tower at $350 million, based on proceeds it could reap from unsold units, even though many of those apartments were likely to sell for less because they were covered by rent stabilization laws.

– Valued an apartment being rented to Ivanka Trump at as high as $25 million, even though she had an option to buy it for $8.5 million.

— Said in documents that its stake in an office building, 40 Wall Street, was worth $525 million to $602 million — between two to three times the estimate reached by appraisers working for the lender Capital One.

Last year, the Manhattan district attorney brought tax fraud charges against the Trump Organization and Allen Weisselberg, its longtime chief financial officer.

Weisselberg pleaded not guilty to charges alleging he and the company evaded taxes on lucrative fringe benefits paid to executives.

 

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