May 22, 2022

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Fine Art Of Business

4 Takeaways From NY Attorney General Filings on the Trump Organization

6 min read
  • The New York attorney general is investigating the Trump Organization’s financial dealings.
  • New court filings detail the AG office’s accusations against the company, including improperly inflated property values.
  • The docs also highlight the extent to which the Trump Organization and family have gone to avoid cooperating.

New York Attorney General Letitia James took legal action Tuesday to compel former President Donald Trump and two of his children to testify under oath in her office’s investigation into the Trump Organization’s financial dealings.

In a Tuesday press release, James announced the action to enforce subpoenas that were issued to Trump, Donald Trump Jr., and Ivanka Trump in December. The release included relevant court filings of more than one hundred pages detailing some of the accusations against the Trump organization.

The years-long fraud investigation is examining if Trump’s real estate company artificially inflated or deflated the values of its properties for loan and tax advantages. The recent filings include the most specific accusations James has made against the Trump Organization to date.

The civil investigation is also occurring alongside a separate criminal investigation into the Trump Organization conducted by the Manhattan district attorney’s office. James’ office is also cooperating with that separate investigation.

Trump has denied all wrongdoing and accused the probes of being politically motivated.

Here are the four major takeaways from the attorney general’s announcement and the accompanying documents.

The court filings outlined specific accusations of the Trump Organization engaging in ‘fraudulent or misleading’ practices

The attorney general’s office said in a statement it has evidence that indicates “the Trump Organization used fraudulent or misleading asset valuations to obtain a host of economic benefits, including loans, insurance coverage, and tax deductions.”

The statement said the firm submitted financial statements to the IRS, as well as lenders and insurers, that were “inaccurate or misleading when compared with the supporting data and documentation that the Trump Organization submitted to its accounting firm.”

The attorney general accused the Trump Organization of misstating objective facts, mischaracterizing assets, and misstating their valuation process, among other issues.

The statement outlined six properties the attorney general says the organization lied about, including Trump’s Seven Springs property in Bedford, New York; three of his Manhattan properties; and two golf clubs.

In one instance, the attorney general said the Trump Organization claimed an apartment was valued at $25 million but then offered it to Ivanka Trump for $8 million.

Trump’s triplex apartment, located in New York City’s Trump Tower, was valued on financial statements as $327 million, based on it being 30,000 square feet, the filings said. However the apartment is only a third of that size — about 10,996 square feet.

The attorney general also said the Trump Organization added a “brand premium” of 15 to 30% to boost the valuation of some Trump-branded properties, a practice she called unusual and wrong.

James’ office said the evidence they gathered makes it clear the investigation should continue, but they have not yet determined if there are grounds for legal action.

Eric Trump, Ivanka Trump, Donald Trump, and Donald Trump Jr. pictured at Trump Tower

President-elect Donald Trump, Eric Trump, left, Ivanka Trump, and Donald Trump Jr., listen during a press conference at Trump Tower in New York, NY on Wednesday, Jan. 11, 2017.


Jabin Botsford/The Washington Post via Getty Images



Trump’s children could also be implicated in the fraud

James’ attempts to compel Trump, Donald Trump Jr., and Ivanka Trump to appear for sworn testimony suggest the attorney general’s investigation has become a family affair.

In the Tuesday press release, James said the documents released this week made it clear that all three individuals were “directly involved in one or more transactions under review.” 

The filing alleges both Donald Trump Jr. and Ivanka Trump were involved in providing misleading financial information to institutions, while the former president had “ultimate authority over a wide swath of conduct by the Trump Organization involving misstatements to counterparties, including financial institutions and the Internal Revenue Service.”

Donald Trump Jr. oversaw multiple financial statements that contained misleading valuations since 2017, according to court documents. And until 2017, Ivanka Trump served as the organization’s primary contact for its largest lender, Deutsche Bank, to which Ivanka “caused misleading financial statements to be submitted to” as well as to the federal government, the filing said.

Trump’s other adult son, Eric Trump, who serves as vice president of the company, was already subpoenaed in the investigation in late 2020 but invoked the Fifth Amendment right more than 500 times when they were deposed in 2020, James’ office said, according to Tuesday’s court documents.

The Trump Organization and members of the Trump family have been largely uncooperative with the probe thus far

The late-night document release on Tuesday was in part prompted by Trump’s recent attempts to block the attorney general from questioning him and his two children, James’ office said. But the trove of new records suggest the former president’s efforts to spurn the investigation have been ongoing since the start. 

“For more than two years, the Trump Organization has used delay tactics and litigation in an attempt to thwart a legitimate investigation into its financial dealings,” James said in the press release.

According to the Tuesday filings, the Trump Organization avoided handing over documents to James’ office for more than a year, citing “email migrations” as an excuse to delay testimony from an executive in charge of overseeing conflict-of-interest rules. 

In a letter filed to the court and made public in Tuesday’s court documents, the Trump Organization claimed email migrations from 2019 were responsible for unsent attachments in Chief Compliance Counsel Jill Martin’s emails related to the valuation of a Trump golf club in Los Angeles.

But the company’s evasion goes beyond email snafus, according to court documents.

Of the five million documents the Trump Organization has handed over to James’ office in the two years since the attorney general’s office issued a subpoena, only three were actually produced by Trump himself, who ran the operation for decades before his presidential inauguration in January 2017.

The three letters were produced in July 2021, weeks after the Manhattan District Attorney’s Office indicted the organization on tax evasion charges. The company has not produced any documents from Trump since then, according to court filings.

A taxi passes by Trump Tower, the headquarters of the Trump Organization, in New York City on Wednesday, July 14, 2021

A taxi passes by Trump Tower, the headquarters of the Trump Organization, in New York City on Wednesday, July 14, 2021

AP Photo/Ted Shaffrey


The Trump Organization is firing back 

Following Tuesday’s legal action, the Trump Organization responded Wednesday with a strongly-worded statement that echoed several of the former president’s previous attacks against the attorney general.

“The only one misleading the public is Letitia James,” a company spokesperson said in the statement. “She defrauded New Yorkers by basing her entire candidacy on a promise to get Trump at all costs without having seen a shred of evidence and in violation of every conceivable ethical rule.”

The response comes one month after Trump filed his own lawsuit against James, accusing her of trying to “harass” him with investigations. During a rally in Arizona last weekend, the former president played a supercut mocking James, calling her an “unhinged liberal,” while also claiming he did not know who she was. 

“Three years later she is now faced with the stark reality that she has no case,” the Trump Organization continued in the Wednesday statement. “So, in response to Trump suing her and filing multiple ethical complaints, and on the heels of her failed governor’s race, she has no choice but to mislead the public yet again by misrepresenting the facts and ignoring her own inflammatory comments.”

The spokesperson added: “Her allegations are baseless and will be vigorously defended.”

On Wednesday, Eric Trump tweeted a video montage of James going after Trump when she was campaigning to become New York attorney general in 2018. Other Democrats in the race also campaigned on prosecuting Trump.

“Letitia you can not escape your own words,” he wrote on Twitter. “This is all window dressing for your abuse of office and ethical misconduct (which we are prosecuting you for).”

There is no evidence to suggest James has broken any state ethics laws during the investigation.


https://www.businessinsider.com/takeaways-new-york-attorney-general-filings-on-trump-organization-2022-1

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