Donald Trump, his company and 3 of his children sued over fraud allegations

Donald Trump
Photo credit Getty Images

The New York Attorney General's office has filed a lawsuit against former President Donald Trump, his three eldest children and the Trump Organization, alleging business fraud.

The fraud involves some of the company's most prized assets, including properties in Manhattan, Chicago and Washington, D.C., according to the Associated Press.

The lawsuit, filed Wednesday in state court in New York, is the culmination of Democrat Attorney General Letitia James' three-year civil investigation of Trump and the Trump Organization.

"For too long, powerful, wealthy people in this country have operated as if the rules do not apply to them. Donald Trump stands out as among the most egregious examples of this misconduct," James said in a statement. "With the help of his children and senior executives at the Trump Organization, Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and cheat the system."

Three of Trump's children, Donald Jr., Ivanka and Eric Trump, are named as defendants, along with two longtime company executives, Allen Weisselberg and Jeffrey McConney.

The 214-page complaint alleges that Trump, with the help of his children and senior executives, falsely inflated his net worth by billions of dollars to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company, to satisfy continuing loan covenants, to induce insurers to provide insurance coverage for higher limits and at lower premiums, and to gain tax benefits, among other things, according to the AG's office.

From 2011-2021, Trump and his company "knowingly and intentionally created more than 200 false and misleading valuations of assets on his annual Statements of Financial Condition to defraud financial institutions," the lawsuit states. The alleged conduct violates New York Executive Law.

The complaint includes examples of alleged fraudulent conduct across more than 23 different properties and other assets owned by the former president and the Trump Organization.

For instance, the suit says Trump valued his Mar-a-Lago club property in Palm Beach, Florida as high as $739 million based on the false premise that it was unrestricted property and could be developed and sold for residential use.  In reality, the club generated annual revenues of less than $25 million and should have been valued at closer to $75 million, according to the lawsuit.

James is seeking to permanently bar the Trump family from being in the office of any New York-based company, and from entering into any New York real estate acquisitions for five years. She's also seeking a total of $250 million in penalties.

James has also referred the matter to the U.S. Attorney's Office for the Southern District of New York and the Internal Revenue Service for criminal investigation.

In a statement to several outlets, Trump lawyer Alina Habba said the lawsuit "is neither focused on the facts nor the law – rather, it is solely focused on advancing the Attorney General’s political agenda."

"It is abundantly clear that the Attorney General’s Office has exceeded its statutory authority by prying into transactions where absolutely no wrongdoing has taken place," Habba continued. "We are confident that our judicial system will not stand for this unchecked abuse of authority, and we look forward to defending our client against each and every one of the Attorney General’s meritless claims."

Trump issued a response on Truth Social, lashing out against James.

"Another Witch Hunt by a racist Attorney General, Letitia James," he wrote. "I never thought this case would be brought - until I saw 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 went on to call James "a failed A.G. whose lack of talent in the fight against crime is causing record numbers of people and companies to flee New York."

Trump did not directly address the lawsuit or its claims in his postings.

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