New York attorney general sues Trump

Eric Trump, Ivanka Trump and Donald Trump Jr. “knowingly participated” in the fraudulent schemes alleged by New York Attorney General Letitia, her complaint said, pointing to how the three Trump children “were intimately involved in the operation of the Trump Organization’s business.”

The scheme “required the participation of Mr. Trump and his children,” the lawsuit said, adding that the children were “aware of the true financial performance of the company.”

The children are mentioned in connection with several of the episodes laid out in the lawsuit in which the New York attorney general alleges Trump and his businesses made false statements about their finances.

The lawsuit, for instance, alleges that Eric Trump was involved in an approach to appraising properties in Las Vegas in a way that lowered their value for tax purposes while inflating their value on Trump financial statements.

The lawsuit also quotes testimony from Donald Trump Jr. as it describes how the value of Trump Park Avenue was allegedly inflated on Trump financial statements. An appraisal of the property by an outside firm in 2010 for a loan took into account how some of the units were rent-stabilized, lowering their value, according to James’ complaint. Yet, Trump financial statements put a value on the units roughly six times higher than what the appraiser had concluded, the lawsuit said.

“The Trump Organization was well aware of the rent-stabilized nature of many units at the property, as any landlord would be. Indeed, Donald Trump, Jr. testified that the rent-stabilized tenants at the building were, ‘the bane of [his] existence for quite some time,’” the lawsuit said.

The lawsuit pointed to Ivanka’s involvement in securing a loan for purchasing the Doral golf course in Florida and Chicago properties in 2012 – loans that James claims were extended partly because of financial statements allegedly containing misrepresentations.

"On each of those transactions with Deutsche Bank, Ms. Trump was aware that the transactions included a personal guaranty from Mr. Trump that required him to provide annual Statements of Financial Condition and certifications,” the lawsuit says. 

Former President Donald Trump lashed out against New York attorney General Letitia James in a pair of Truth Social posts Wednesday, claiming she has caused "record numbers of people and companies to flee New York." 

Trump accused James, who he's spent years deriding, of filing the wide-ranging lawsuit to reverse "her really bad poll numbers." 

"She is a fraud who campaigned on a 'get Trump' platform, despite the fact that the city is one of the crime and murder disasters of the world under her watch," he wrote. 

Alina Habba, an attorney for the former President, responded separately, earlier Wednesday. 

New York Attorney General Letitia James said Wednesday that her office is “in conversations” with Deutsche Bank, one of the financial institutions who lent money to the Trump Organization. 

The German bank was a major source of loans to Trump’s golf courses and hotels but cut off all business with the former President in Jan. 2021.

While CNN previously reported Deutsche Bank didn’t lose money on the deals, James’ lawsuit alleges the bank was among those defrauded by Trump. James subpoenaed the bank, and it complied in 2019.   

James also said that Mazars, an accounting firm that has worked with the Trump Organization, had indicated on the financial statements that they did not certify or audit the information. She added that there is an “ongoing investigation” of Cushman & Wakefield, a commercial real estate firm that worked with the Trump organization. 

Cushman & Wakefield has previously said it stands by its appraisers and work.

In the lawsuit filed today against former President Donald Trump and his organization, New York Attorney General Letitia James said tax records found in the FBI’s raid of Trump’s Mar-a-Lago residence were not produced during her investigation. 

The lawsuit notes that litigation over the search warrant for Trump’s Florida residence in early August revealed that the FBI seized accounting information as well as communication regarding taxes.

Those documents have not been publicly revealed as the Justice Department’s investigation — and a special master review of the seized documents — are ongoing.  

According to the lawsuit, Trump’s counsel said they had “diligently searched each and every room of Respondent’s private residence located at Mar-a-Lago, including all desks, drawers, nightstands, dressers, closets, etc.” but did not find anything relevant to James’s subpoenas. 

The lawsuit alleges that Trump repeatedly failed to produce documents required by the New York attorney general’s subpoena over the past several years in an attempt to conceal acts of fraud.

The lawsuit from New York Attorney General Letitia James accuses former President Donald Trump of using allegedly doctored financial statements in his and Ivanka Trump's personal pursuit to open a luxury hotel in Washington, DC, in the years before he ran for the presidency.

The statements were “critical to the overall success of the investment in the Old Post Office property in Washington, DC," which became the Trump International Hotel, James' lawsuit says.

James alleges Ivanka Trump and her father pitched to the General Services Administration his financial capability – including by sending the agency financial statements that included misrepresentations – in order to secure the lease for the hotel.

James says the father-daughter duo also gave an in-person presentation to the agency, which ultimately awarded them the lease of the federal government-owned building beginning in 2013.

While Trump was in office, the hotel, which is less than a mile from the White House, became a gathering place for his supporters and close contacts, and bookings grew because of the connection to the sitting president.

James also alleges the Trump Organization secured a $170 million loan from Deutsche Bank, partly based on false pretenses, according to James, to develop the hotel inside the historic Old Post Office building.

A banker there "at the urging of Ivanka Trump — kept close tabs on the bank’s consideration of the request," James' team wrote. As part of the financing, "Mr. Trump, as guarantor, would be required to provide his annual statement of financial condition to the bank," the lawsuit says.

Trump personally guaranteed the loan. James’ lawsuit says he was supposed to verify the accuracy of his finances to the bank.

Some more context: House Democrats have sought for years to unearth details of Trump finances, with a top aim being understanding the Trump Hotel books. They were largely unsuccessful.

The Trump Organization sold the hotel in May 2022, enabling the company to repay the loan and earn a profit. The DC hotel property now operates as a Waldorf Astoria.

The lawsuit from New York Attorney General Letitia James says Trump and his associates “padded” their numbers and “cherry-picked” data points to massively inflate the value of their assets.

Investigators claim Trump’s family and business partners tried to “exploit” the process by which assets are evaluated to falsely “pump up” the value of their holdings.

The lawsuit also says Trump’s company used “deceptive strategies” to pull off these schemes, and lied to its own accounting firm, which subsequently prepared financial statements containing bad information.

To “cover up” parts of these allegedly fraudulent schemes, Trump personally instructed some of his employees at times that they should not put their communications in writing, according to the lawsuit. 

“To cover up this scheme, Mr. Trump and his agents sought to avoid creating a documentary record,” the lawsuit said. “Mr. Trump advised his employee handling his real estate affairs in the Lower Hudson Valley, which included Seven Springs, that he did not want communications between them put in writing.”

Donald Trump’s longtime accountant testified that he was “shocked by the size of the discrepancy” regarding the valuation of Trump Park Avenue, according to the New York attorney general’s lawsuit.

The property in question – Trump Park Avenue – was appraised in 2010 to be worth approximately $72.5 million, according to the lawsuit. But Trump’s company claimed in subsequent financial statements that the property was worth roughly $292 million, according to the lawsuit. The property near Central Park includes high-end residential units, commercial spaces and storage spaces.

According to the lawsuit, longtime Trump accountant Donald Bender testified to investigators that he was “shocked by the size of the discrepancy” between the appraised value and the value that was claimed in Trump’s financial statements, specifically regarding the rent-stabilized units at the property.

Bender was involved in preparing the financial statements that are at the heart of New York Attorney General Letitia James’ investigation. The lawsuit further claimed that Bender told investigators that he wouldn’t have issued the financial statements for this property if he knew about the 2010 appraisal.

“The result was a classic ‘two sets of books’ situation: one internal set of records reached one conclusion regarding market value, but the figure presented on Mr. Trump’s Statement was considerably higher,” James said in her lawsuit.

CNN has previously reported that Bender gave grand jury testimony in the Manhattan District Attorney’s criminal investigation into Trump and his company. CNN also has reported that Bender gave an interview to investigators from the attorney general’s office.

New York Attorney General Letitia James spelled out what she argued was a pattern of fraud by former President Donald Trump and his company, where they repeatedly ignored professional appraisals for their properties and instead used highly inflated, self-serving valuations to increase his own profits.

As an example, James highlighted what she says happened with 40 Wall Street, a property known as The Trump Building in New York City’s financial district, which is referenced dozens of times in the lawsuit.

Trump’s company got appraisals for the property in 2010 and 2012, which found that it was worth $200 million and $220 million respectively, according to the lawsuit. But Trump’s company repeatedly claimed that the property was worth a lot more in its official financial statements, according to the lawsuit.

In 2011, Trump’s company said the property was worth $524 million. He said it was worth $527 million in 2012, and $530 million in 2013, according to the lawsuit, which argued that there was not a valid basis for these inflated valuations and that Trump falsely claimed these numbers came from “professionals.”

James said at a news conference Wednesday that the financial statements that Trump and his company submitted over the years were “greatly exaggerated, grossly inflated, objectively false.”

In a news conference announcing the civil fraud lawsuit, New York Attorney General Letitia James said the former President repeatedly pleaded the Fifth Amendment when asked about falsely inflating his net worth during a deposition with her office in August. 

Trump previously said in a statement that he declined to answer questions “under the advice of my counsel.” On Wednesday, James provided details about what questions to which he pleaded the Fifth Amendment.

According to James, Trump’s businesses prepared statements of financial condition every year to submit to banks and other financial institutions. The statements showed the financial position of the Trump businesses, James said, and were relied upon if the Trump Organization wanted to apply for loans.

Each statement was personally certified as accurate by Donald Trump, Donald Trump Jr. or the former CFO Allen Weisselberg, James said.

Trump “made known” that “he wanted his net-worth reflected on those statements to increase,” James said in the press conference, “a desire Mr. Weissenberg and others carried out year after year in their fraudulent preparation of those statements.”

James added, “When asked under oath if he, Mr. Trump, continued to review and approve the statements after becoming president of the United States in 2017, Mr. Trump again invoked his Fifth Amendment privilege and refused to answer."