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Trump Organization under fire again as New York AG alleges fraud

Last year, the Manhattan district attorney charged the Trump Organization with tax fraud. Now Donald Trump鈥檚 records are under scrutiny again after the New York attorney general鈥檚 office found evidence that his company falsely valued assets for economic gain.

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The New York attorney general says her investigators have uncovered evidence that former President Donald Trump鈥檚 company used 鈥渇raudulent or misleading鈥� valuations of its golf clubs, skyscrapers, and other property to get loans and tax benefits.

In a court filing late Tuesday, lawyers for Attorney General Letitia James told a judge they have not decided whether to bring a lawsuit in connection with the allegations, but that investigators should be allowed to question Mr. Trump and his two eldest children under oath as part of the civil probe.

The Trump Organization issued a statement Wednesday calling the civil investigation 鈥渂aseless鈥� and politically motivated.

聽contain the attorney general鈥檚聽most detailed accounting yet聽of a long-running investigation into allegations that Mr. Trump鈥檚 company exaggerated the value of its holdings to impress lenders 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.

When giving estimates of Mr. Trump鈥檚 wealth, the company misreported the size of his Manhattan penthouse, saying it was nearly three times its actual size 鈥� a difference in value of about $200 million, Ms. James鈥� office said, citing deposition testimony from Mr. Trump鈥檚 longtime financial chief Allen Weisselberg, who was charged last year with tax fraud in a parallel criminal investigation.

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

Investigators, the court papers said, had 鈥渄eveloped 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.鈥�

In its statement, the Trump Organization said 鈥渢he only one misleading the public is Letitia James.鈥�

鈥淪he defrauded New Yorkers by basing her entire candidacy on a promise to get Trump at all costs without having seen a shred of evidence and in violation of every conceivable ethical rule,鈥� they wrote. 鈥淭hree years later she is now faced with the stark reality that she has no case.鈥�

Donald Trump Jr. said on Twitter that the investigation 鈥渋s nothing more than political retribution from her on behalf of the entire Dem Party. She should be disbarred!鈥�

The disclosure comes as Mr. Trump has been laying the groundwork for a potential comeback campaign for president in 2024. He held his first rally of the new year last weekend in Arizona, where he slammed the 鈥渕onsters that are using law enforcement for political retribution at the local, state, and federal level鈥� and aired an anti-James video that highlighted her past anti-Trump statements.

Mr. Trump鈥檚 legal team has sought to block the subpoenas, and it asked a federal court last month to put an end to Ms. James鈥� investigation. That lawsuit is pending. His lawyers say Ms. James is improperly attempting to obtain testimony in her civil probe that could be used in a parallel criminal investigation overseen by Manhattan District Attorney Alvin Bragg

In a statement late Tuesday, Ms. James鈥� office said the evidence gathered so far shows that her investigation should proceed unimpeded.

鈥淔or more than two years, the Trump Organization has used delay tactics and litigation in an attempt to thwart a legitimate investigation into its financial dealings,鈥� Ms. James said. 鈥淭hus 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.鈥�

Although Ms. James鈥� investigation is separate from the criminal investigation, her office has been involved in both, dispatching several lawyers to work side by side with prosecutors from the Manhattan D.A.鈥檚 office.

Ms. James鈥� office said that under state law, it can seek 鈥漚 broad range of remedies鈥� against companies found to have committed commercial fraud, including revoking licenses to conduct business in the state, seeking the removal of company officers or seeking restitution, and 鈥渄isgorgement of ill-gotten gains.鈥�

In the court papers, Ms. James鈥� office said evidence shows that Mr. Trump鈥檚 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 鈥渂rand premium鈥� of 15% to 30% to the value of some properties because they carried the Trump name, despite financial statements explicitly stating they didn鈥檛 incorporate brand value.
• Inflated the value of a suburban New York golf club by millions of dollars by counting fees for memberships that weren鈥檛 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 鈥� between two to three times the estimate reached by appraisers working for the lender Capital One.

One judge has previously sided with Ms. James on an earlier request to question another Trump son, Trump Organization executive Eric Trump, who ultimately sat for a deposition but declined to answer some questions.

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

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

Both investigations are at least partly related to allegations made in news reports and by Mr. Trump鈥檚 former personal lawyer, Michael Cohen, that Mr. Trump had a history of misrepresenting the value of assets.

The disclosures about the attorney general鈥檚 investigation came the same day as Mr. Trump鈥檚 ally Rudy Giuliani and other members of the legal team that had sought to overturn the results of the 2020 presidential election were subpoenaed by a House committee investigating the U.S. Capitol insurrection.

This story was reported by The Associated Press.