NY AG James Sues Trump For Fraud

Topline
New York Attorney General Letitia James (D) sued former President Donald Trump, the Trump Organization and his children in state court Wednesday, after a years-long civil investigation into the Trump Organization’s financial dealings, alleging Trump and his associates committed “repeated and persistent” acts of fraud and should be barred from leading any companies in New York in the future.

Former U.S. President Donald Trump leaves Trump Tower to meet with New York Attorney General Letitia … [+] James on August 10 in New York City.

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Key Facts

The lawsuit was filed in New York State Supreme Court against Trump, the Trump Organization, Eric Trump, Donald Trump, Jr., Ivanka Trump, the Donald J. Trump Revocable Trust and other Trump businesses and associates.

James alleges Trump and his associates “engaged in numerous acts of fraud and misrepresentation” when they prepared Trump’s financial statements between 2011 and 2021 in order to “injustly enrich himself,” arguing the fraudulent documents “were approved at the highest levels of the Trump Organization—including by Mr. Trump himself.”

Trump and his associates allegedly repeatedly inflated assets to obtain more favorable business deals and to inflate his own net worth, the lawsuit alleges, claiming there were “more than 200 false and misleading valuations of assets” over the course of 10 years, including for his apartment at Trump Tower and his Mar-A-Lago estate in Florida.

James alleges Trump and his associates’ conduct violated both civil and “a host of” criminal state laws related to fraud and issuing false financial statements and business records.

The lawsuit asks the court to cancel certificates for Trump’s businesses, impose more oversight on the Trump Organization, bar Trump from engaging in any commercial real estate acquisitions for five years, block him and his children from serving as officers or directors in any New York business and force the defendants to pay an approximately $250 million fine, among other penalties.

A Trump Organization spokesperson described the lawsuit in a statement to Forbes as “about politics, pure and simple” and setting a “dangerous precedent,” accusing James of “filing this lawsuit at the eleventh hour in a desperate attempt to pander to voters.”

Crucial Quote
“This investigation revealed that 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 Wednesday. “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.”

Chief Critic
Trump slammed the lawsuit Wednesday on Truth Social as “another Witch Hunt by a racist Attorney General,” adding he “never thought this case would be brought – until I saw [James’] really bad poll numbers.” James is “a total crime fighting disaster in New York, is spending all of her time fighting for very powerful and well represented banks and insurance companies, who were fully paid, made a lot of money, and never had a complaint about me, instead of fighting murder and violent crime,” Trump added. Trump has long opposed James’ investigation and sued the AG in federal court last year in an effort to stop it, but the case was dismissed in May.

What To Watch For
In addition to the state laws the AG alleges Trump and his associates violated, the lawsuit also suggests the alleged misconduct may have violated federal laws regarding fraud. James said her office has therefore referred its findings to federal prosecutors and the Internal Revenue Service, suggesting Trump could be criminally prosecuted in federal court as well if they take up the case.

Key Background
James’ office first opened its civil investigation into the Trump Organization in March 2019, after ex-Trump attorney Michael Cohen testified to Congress that Trump had fraudulently inflated or deflated the value of his assets on financial statements for personal gain, and the office expanded its efforts in May 2021 to include a separate criminal probe. James previously alleged in court filings her office had found “significant” evidence of alleged fraud. The investigation has been fraught with conflict as Trump and his children have fought subpoenas to testify in court, and Trump was held in contempt of court and forced to pay $100,000 in fines before ultimately complying with the subpoena. The AG deposed Trump in August, during which he refused to answer questions and invoked his Fifth Amendment rights. In addition to Trump’s deposition, Eric Trump, Donald Trump, Jr., and Ivanka Trump all testified during the investigation, with Donald Jr. and Ivanka reportedly answering investigators’ questions while Eric invoked his Fifth Amendment rights. James had been widely expected to bring her lawsuit against Trump soon after his deposition, and the New York Times reported last week the AG’s office had rejected a settlement offer from Trump’s attorneys, paving the way for her to imminently file suit against him.

Tangent
The Manhattan District Attorney’s office is also investigating the Trump Organization in a criminal probe that started in July 2019. The Manhattan probe has so far not resulted in any charges against Trump himself—and it’s unclear if it will, though James said her office would refer its findings to the DA—but the Trump Organization and its former Chief Financial Officer Allen Weisselberg were indicted for tax fraud in July 2021 in connection with the investigation (Weisselberg was also named as a defendant in James’ suit Wednesday). Weisselberg pleaded guilty to the charges against him and took a plea deal, which will result in a five-month prison sentence, while the case against the Trump Organization will go to trial in October.

Further Viewing

Further Reading
NY AG James May Sue Trump Soon—And His Kids—After Reportedly Rejecting Settlement Offer (Forbes)

Trump Refuses To Answer Questions In Deposition By N.Y. Attorney General (Forbes)

Tracking Trump: A Rundown Of All The Lawsuits And Investigations Involving The Former President (Forbes)

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