NEW YORK CITY – Former president Donald Trump padded his net worth by billions of dollars and habitually misled banks and others about the value of golf courses, hotels and his Mar-a-Lago estate, New York’s attorney general said Wednesday. The AG’s lawsuit that seeks to permanently disrupt the Republican’s ability to do business in the state.
The AG, Letitia James, dubbed it: “The art of the steal.”
Thesuit, filed in state court in Manhattan, is the culmination of the Democrat’s three-year civil investigation into Trump and the Trump Organization. Trump’s three eldest children, Donald Jr., Ivanka and Eric Trump, were also named as defendants, along with two longtime company executives.
In its 222 pages, the suit detailed dozens of instances of alleged fraud. Many apparently involved claims made on annual financial statements. According to the lawsuit, Trump claimed his Trump Tower apartment – a three-story penthouse replete with gold-plated fixtures – was nearly three times its actual size and valued the property at $327 million. No apartment in New York City has ever sold for close to that amount, James said.
Trump applied similar fuzzy math to his Mar-a-Lago estate in Palm Beach, Florida, the lawsuit alleged, by valuing the private club and residence as high as $739 million – more than 10 times a more reasonable estimate of its worth. Trump’s figure is based on the idea that the property could be developed for residential use, but deed terms prohibit that.
“This investigation revealed that Donald Trump engaged in years of illegal conduct to inflate his net worth, to deceive banks and the people of the great state of New York,” James said at a news conference. “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 referred to the title of Trump’s 1987 memoir, “The Art of the Deal.”
James said the investigation also uncovered evidence of potential criminal violations, including insurance fraud and bank fraud, and her office was referring those findings to outside authorities for further investigation.
Trump, in a post to his Truth Social platform, decried the suit as “Another Witch Hunt” and denounced James as “a fraud who campaigned on a ‘get Trump’ platform.”
Trump’s lawyer, Alina Habba, said the allegations are “meritless” and the suit “is neither focused on the facts nor the law – rather, it is solely focused on advancing the Attorney General’s political agenda.”
In the case, James asked the court to ban Trump and his three eldest children from ever again running a company based in the state.
She is seeking payment of at least $250 million, which she said was the estimated worth of benefits derived from the alleged fraud. And she wants Trump and the Trump Organization from entering into commercial real estate acquisitions for five years, among other sanctions.
The former president also faces an FBI investigation into his handling of classified records.
While James’ lawsuit is being pursued in civil court, Manhattan District Attorney Alvin Bragg has been working with James’ office on a parallel criminal investigation.
Trump cited fear of prosecution in August when he refused to answer questions in a deposition with James.
The odds of a criminal prosecution have been seen as falling in recent months after Bragg allowed a grand jury to disband without bringing charges. Bragg said again Wednesday the criminal investigation is “active and ongoing.”
A criminal prosecution would have a far higher burden of proof than a civil suit.
“Generally in criminal cases you have to prove intent. In civil cases, just negligence or intentional misrepresentation give rise to liability,” said Neama Rahmani, a former federal prosecutor in San Diego who now practices law at a Los Angeles firm.
The U.S. attorney’s office in Manhattan said it was aware of James’ referral of potential criminal violations. The Internal Revenue Service’s criminal investigation division said it “doesn’t confirm the existence of investigations until court documents are publicly available.”
The Trump Organization is set to go on trial in October in a criminal case alleging that it schemed to give untaxed perks to senior executives, including its longtime finance chief Allen Weisselberg.
Weisselberg, 75, pleaded guilty Aug. 18. His plea agreement requires him to testify at the company’s trial before he starts a five-month jail sentence. If convicted, the Trump Organization could face a fine of double the amount of unpaid taxes.
Weisselberg and another Trump Organization executive, Jeffrey McConney, were also named as defendants by James.
Trump’s previous refusal to answer questions in testimony could be held against him if a case ever reaches a jury. In civil cases, courts are allowed to draw negative inference from such Fifth Amendment pleadings.
“If Trump wanted to argue that some accounting decision was harmless instead of malicious, he might have already passed up the opportunity when he decided to stay silent,” said Will Thomas, an assistant professor of business law at the University of Michigan.