NEW YORK – Late Tuesday, the New York Attorney General’s office told the court that its investigators had found evidence that former President Donald Trump’s company used “fraudulent or misleading” asset valuations to obtain loans and tax benefits.
The court file said state authorities have not yet decided whether to file a civil case over the allegations, but investigators should question Trump and his two eldest children as part of the investigation.
Trump and his lawyers say the investigation is politically motivated.
In court documents, the Office of Attorney General Letitia James presented its most detailed accounts to date of a long-running investigation into allegations that the Trump Corporation overvalued assets to obtain favorable loan terms, or miscalculated the value of land to lower its tax burden. .
She said the Trump Organization exaggerated the value of land donations made in New York and California on papers submitted to the IRS to justify several million dollars in tax deductions.
The company misreported the size of Trump’s Manhattan penthouse, saying it was nearly three times its actual size — a difference in value of about $200 million, James’ office said, citing testimony from Trump’s longtime chief financial officer Allen Weissberg, who it directed charges last year. With tax fraud in a parallel criminal investigation.
James’ office detailed its findings in a court order to compel Trump, his daughter Ivanka Trump and son Donald Trump Jr to comply with subpoenas asking to testify.
The court papers said investigators “developed significant additional evidence indicating that the Trump Organization used fraudulent or misleading asset assessments to obtain a range of economic benefits, including loans, insurance coverage and tax deductions.”
Letters seeking comment have been left with Trump’s attorney.
Trump’s legal team sought to block the subpoenas, calling them an “unprecedented and unconstitutional maneuver.” They say James is improperly trying to obtain testimony that can be used in the parallel criminal investigation, which is being overseen by Manhattan District Attorney Alvin Bragg.
Trump sued James in federal court last month, seeking to end her investigation. In the lawsuit, his attorneys claimed that the attorney general, who is a Democrat, had violated the Republican’s constitutional rights in a “disguised attempt to publicly harm Trump and his associates.”
In the past, the former Republican president has denounced the James investigation and the Prague investigation as part of a “witch hunt”.
In a statement issued late Tuesday, James’ office said it had not decided whether to pursue legal proceedings, but said the evidence gathered so far showed that the investigation should continue unimpeded.
“For more than two years, the Trump Organization has used delay and litigation tactics in an attempt to thwart a legitimate investigation into its financial dealings,” James said. “So far in our investigation, we have discovered significant evidence indicating that Donald J. Trump and the Trump Organization have falsely and fraudulently valued multiple assets and misrepresented these values to financial institutions for economic benefit.”
Although James’ civil investigation is separate from the criminal investigation, her office was involved in both, sending several attorneys to work alongside prosecutors from the Manhattan office.
James’s office said that under state law, he could seek a “broad range of remedies” against companies found to have committed business fraud, “including revocation of their license to conduct business within the state, moving to remove an official or director from the board of directors, and responding illicit gain and its offset.”
In court papers, James’s office said evidence shows that Trump’s company:
He listed his Seven Springs estate in northern New York City as being worth $291 million, based on the questionable assumption that he could make $161 million building nine luxury homes.
A “brand premium” of 15% to 30% has been added to the value of some properties because they bear Trump’s name, despite the financial statements expressly stating that it does not include the brand value.
Inflating the value of a golf club in a suburb of New York by millions of dollars by counting membership fees that were never sold or never paid.
The Park Avenue condominium is valued at about $350 million, based on the revenue it could make on unsold units, although many of these apartments were likely to be sold at a lower price because they were covered by rent-fixing laws.
The value of the apartment being rented to Ivanka Trump is estimated at up to $25 million, although she has the option to purchase it for $8.5 million.
– She said in the documents that her stake in Office 40 Wall Street was worth $525 million to $602 million — two to three times the estimate made by appraisers working for lender Capital One.
A judge previously sided with James in an earlier request to question Trump’s other son, Eric Trump, the executive director of the Trump Organization, who eventually sat down to testify but declined to answer some questions.
Last year, the Manhattan attorney general brought 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 fringe benefits paid to executives.
Both investigations are linked at least in part to allegations in news reports and Trump’s former personal attorney, Michael Cohen, that Trump has a history of misrepresenting the value of assets.
The revelation of the attorney general’s investigation came on the same day that a House committee investigating the US Capitol rebellion summoned Trump ally Rudy Giuliani and other members of the legal team that sought to overturn the results of the 2020 presidential election.
Written by Michael R. Sisak