MICHAEL R. SISAK
NEW YORK (AP) — The New York Attorney General says her investigators have uncovered evidence that former President Donald Trump’s company used “fraudulent or misleading” estimates of its golf clubs, skyscrapers and other properties to obtain loans and tax benefits.
In a court hearing filed late Tuesday night, attorneys for Attorney General Letitia James told the judge they have not yet decided whether to file a lawsuit over the allegations, but that investigators should be allowed to question Trump and his two older children under oath as part of a civil investigation.
On Wednesday, the Trump organization released a statement calling the investigation “baseless” and politically motivated.
Court documents contain the attorney general’s most detailed account of a lengthy investigation into allegations that Trump’s company exaggerated the value of its assets to impress creditors or misrepresented the value of land to reduce its tax burden.
The Trump Organization, James’s office said, inflated the value of land donations made in New York and California in filings with the IRS to justify several million dollars in tax deductions.
When giving estimates of Trump’s fortune, the company misrepresented the size of his Manhattan penthouse, saying it was nearly three times its actual size – a difference in value of about $200 million, James’s office said, citing testimony from longtime Trump CFO Allen. Weisselberg, who was charged last year with tax fraud in a parallel criminal investigation.
James’s office detailed its findings in a court motion to compel Trump, his daughter Ivanka Trump, and his son Donald Trump Jr. to execute subpoenas to obtain their testimony.
Court documents say investigators “gathered significant additional evidence indicating that the Trump Organization used fraudulent or misleading asset valuations to obtain a variety of economic benefits, including loans, insurance coverage, and tax deductions.”
In a statement, the Trump organization said “the only one misleading the public is Letitia James.”
“She deceived the people of New York by running her candidacy on a promise to woo Trump at all costs, without seeing the slightest bit of evidence, and violating every conceivable ethical rule,” they wrote. “Three years later, she’s faced with the harsh reality that she doesn’t have a case.”
Donald Trump Jr. tweeted that the investigation “is nothing short of political retaliation on her part on behalf of the entire Democratic Party. She should be stripped of her status!”
The disclosure comes as Trump was laying the groundwork for a potential campaign to return to the presidency in 2024. This past weekend in Arizona, he held his first rally of the new year, where he lashed out at “monsters who use law enforcement for political retribution at the local, state and federal levels” and aired an anti-James video highlighting her past statements against Trump.
Trump’s legal team tried to block the subpoenas and last month asked a federal court to end the James investigation. This lawsuit is pending. His lawyers say James is illegally trying to obtain evidence in her civil investigation that could be used in a parallel criminal investigation supervised by Manhattan District Attorney Alvin Bragg.
In a statement late Tuesday evening, James’s office said evidence gathered shows her investigation should continue unhindered.
“For more than two years now, the Trump Organization has been using delaying tactics and litigation in an attempt to interfere with legitimate investigations into its financial transactions,” James said. “At this point in our investigation, we have found substantial evidence that Donald J. Trump and the Trump Organization falsely and fraudulently valued several assets and presented those values to financial institutions for economic gain.”
Although the James investigation is separate from the criminal investigation, her office has been involved in both, sending several attorneys to work side by side with prosecutors from the Manhattan District Attorney’s office.
James’s office said it can seek “a wide range of remedies” under state law against companies found to be commercially fraudulent, including revocation of state business licenses, removal of company officials or claiming restitution, and “seizure of property dishonest way.”
In court documents, James’s office said the evidence shows that Trump’s company:
– Mentioned his $291 million estate, Seven Springs, north of New York, based on the dubious assumption that it could raise $161 million from building nine luxury homes.
– Added a “brand premium” of 15% to 30% to the value of some properties because they bore Trump’s name, despite the financial statements explicitly saying they do not include brand value.
– Increased the value of a golf club in suburban New York by millions of dollars by counting membership fees that were never sold or never paid.
– Valuated the Park Avenue condominium skyscraper at $350 million based on the revenue it could make from unsold units, even though many of those units are likely to sell for less because they are subject to laws about rent stabilization.
Valued Ivanka Trump’s apartment for $25 million even though she had an option to buy it for $8.5 million.
“The documents say his stake in the 40 Wall Street office building was worth between $525 million and $602 million—two to three times what appraisers working for lender Capital One had estimated.
One judge had previously sided with James in an earlier request to question Trump’s other son, Trump Organization chief executive Eric Trump, who ended up testifying under oath 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 fringe benefits paid to executives.
The disclosure of the Attorney General’s investigation comes on the same day that Trump ally Rudy Giuliani and other members of the legal team trying to overturn the results of the 2020 presidential election were subpoenaed by a House committee investigating the U.S. Capitol uprising.