Former U.S. President Donald Trump, his global family business and three of his adult children were accused Wednesday by the New York state attorney general of engaging in a "staggering" fraud for more than a decade by overvaluing their assets by billions of dollars to enrich themselves.
In a 220-page lawsuit filed in New York State Supreme Court, the state attorney general, Letitia James, accused the former U.S. leader of routinely lying on his financial net worth statements, wildly inflating the value of his real estate holdings "to obtain beneficial financial terms" on bank loans and insurance premiums while cutting the values on other documents to reduce taxation.
James said Trump was able to obtain $250 million in ill-gotten gains, money that she now wants his company, the Trump Organization, to forfeit.
The case James filed against Trump, his company and his three oldest children, Donald Jr., Ivanka and Eric, all of whom played key roles at the family business, is a civil complaint. But after a two-year investigation, James told reporters she concluded that Trump and the family business violated several state criminal laws and "plausibly" federal criminal laws as well.
James referred her findings to federal prosecutors in New York City, although it was not immediately known whether they would pursue a criminal case against Trump and his business. She is also seeking to bar the Trumps from ever again operating a business in the state.
Trump's lawyer, Alina Habba, characterized the lawsuit as "an abuse of authority," saying, "We look forward to defending our client against each and every one of the attorney general's meritless claims."
The Trump Organization said the company's lenders "profited handsomely - to the tune of hundreds of millions of dollars in interest and fees" from their transactions with the company.
It attributed James's filing of the lawsuit to "politics, pure and simple," contending that she "put her own political ambitions ahead of the safety of New Yorkers," calling it "an abhorrent abuse of power, waste of valuable resources and tens of millions of taxpayer dollars."
James, a Democrat, is running for reelection in November, while Trump has broadly hinted that he will seek the 2024 Republican presidential nomination to try to reclaim the White House.
The New York case is one of numerous investigations Trump is facing, with most of the others directly related to his four-year presidency that ended in January 2021.
Federal and state prosecutors are investigating whether he illegally attempted to block Congress from certifying that Democrat Joe Biden had won the 2020 election, fomented a riot at the U.S. Capitol on January 6 last year and sought the help of election officials in the southern state of Georgia to "find" him enough votes to upend Biden's victory in the state.
In addition, federal prosecutors are deep into an investigation of why Trump took hundreds of highly classified national security documents with him to his oceanside Mar-a-Lago estate when he left office rather than turning them over to the National Archives as required by U.S. law.
The New York lawsuit claimed that "the number of grossly inflated asset values is staggering, affecting most if not all of the (Trump) real estate holdings in any given year." The suit said that 11 of Trump's annual financial statements included more than 200 false and misleading asset valuations.
Trump has long called himself a billionaire and boasted of his financial acumen, although over the years many of his businesses have gone bankrupt, including an airline, casinos along the Atlantic coastline in New Jersey and a commercial educational venture he called Trump University.
Trump long fought to avoid testifying in James's investigation, but eventually was forced to by an adverse court ruling. But when he appeared at her office in July, he invoked his constitutional right against self-incrimination and refused to answer more than 400 questions.
James said Trump should be held to the same legal standards as everyday Americans, adding that it is illegal to lie to banks to secure loans.
"Claiming 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, mocking the title of Trump's 1987 book. 'There cannot be different rules for different people in this country or in this state."