Trump’s company used “fraudulent or misleading” reviews to obtain credit and tax benefits, New York AG says
NEW YORK – New York’s attorney general’s office told a court late Tuesday that its investigators had uncovered evidence that former President Donald Trump’s company used “fraudulent or misleading” asset valuations to obtain loans and tax benefits.
The court filing says state authorities have not yet decided whether to pursue a civil action in connection with the allegations, but that investigators need to question Trump and his two eldest children as part of the investigation.
Trump and his lawyers say the investigation is politically motivated.
in the court documents, said the office of Attorney General Letitia James most detailed accounting to date a long-running investigation into allegations that Trump’s company exaggerated the value of assets to obtain favorable credit terms or misstated the value of land to lower its tax burden.
The Trump Organization overstated the value of land donations in New York and California on documentation submitted to the IRS to justify multimillion-dollar tax deductions.
The company misrepresented the size of Trump’s Manhattan penthouse, saying it was nearly three times the actual size — a difference in value of about $200 million, James’s office said, citing a statement by Trump’s longtime chief financial officer, Allen Weisselberg, who was charged last year with tax evasion in a parallel investigation.
James’ office detailed his findings in a court motion aimed at compelling Trump, his daughter Ivanka Trump and son Donald Trump Jr. to comply with subpoenas asking for their testimony.
Investigators, according to the court filing, had developed “significant additional evidence suggesting that the Trump Organization used fraudulent or misleading asset valuations to obtain a variety of economic benefits, including loans, insurance coverage and tax deductions.”
Messages asking for comment were left with lawyers for the Trumps.
Trump’s legal team has tried to block the subpoenas, calling them an “unprecedented and unconstitutional maneuver.” They say James is improperly attempting to obtain testimony that could be used in the parallel criminal investigation being overseen by Manhattan District Attorney Alvin Bragg.
Trump sued James in federal court last month to end their investigation. In the lawsuit, his attorneys allege that the attorney general, a Democrat, violated the Republican’s constitutional rights in a “thinly veiled attempt to publicly defame Trump and his associates.”
In the past, the Republican ex-president has denounced James and Bragg’s investigations as part of a “witch hunt”.
In a statement late Tuesday, James’ office said it had not yet decided whether to pursue legal action, but that the evidence collected so far shows the investigation should proceed unhindered.
“For more than two years, the Trump Organization has used delaying tactics and litigation to thwart a legitimate investigation into its financial operations,” James said. “To date in our investigation, we have uncovered significant evidence that suggests that Donald J. Trump and the Trump Organization mispriced and fraudulently multiple assets and misrepresented those values to financial institutions for economic gain.”
Although James’ civil investigation is separate from the criminal investigation, her office was involved in both and dispatched several attorneys to work alongside prosecutors from the Manhattan Attorney’s Office.
James’ office said that under state law it could seek “a wide range of remedies” against companies found to have engaged in commercial fraud, “including revocation of a license to conduct business within the state that To seek the removal of an officer or director from the board of directors and the restitution and confiscation of any wrongfully obtained profits.”
In the court filing, James’ office said evidence shows Trump’s company:
— Listed his Seven Springs estate north of New York City at $291 million based on the dubious assumption that it could fetch $161 million by building nine luxury homes.
— Adding a “brand premium” of 15% to 30% to the value of some properties because they bore the Trump name, even though the balance sheets specifically stated that they contained no brand equity.
— Added millions of dollars to the value of a New York suburban golf club by counting membership fees that were not sold or never paid.
— Valued a Park Avenue apartment tower at $350 million based on the proceeds it was able to generate from unsold units, although many of these apartments would likely sell for less because they were covered by rent stabilization laws.
– Valued an apartment rented to Ivanka Trump at up to $25 million, although she had an option to buy it for $8.5 million.
— Said in documents that his interest in an office building, 40 Wall Street, was worth $525 to $602 million — between two to three times the estimate reached by appraisers at lender Capital One.
A judge previously sided with James to question another Trump son, Trump Organization executive Eric Trump, who eventually lobbied for testimony but declined to answer some questions.
Last year, the Manhattan District Attorney filed tax fraud charges against the Trump Organization and Weisselberg, its longtime chief financial officer.
Weisselberg pleaded not guilty to charges that he and the company evaded taxes on lucrative perks paid to executives.
Both investigations are linked, at least in part, to allegations by news reports and by Trump’s former personal attorney, Michael Cohen, that Trump has a history of misrepresenting the value of assets.
The revelations about the attorney general’s investigation came on the same day as Trump ally Rudy Giuliani and other members of the legal team tried to overturn the results of the 2020 presidential election were subpoenaed by a House Committee Investigating the U.S. Capitol Riot.
By Michael R Sisak