New York AG Tish James Sues To End All Trump Business Like A Common Trump Charity
This morning New York Attorney General Letitia James announced that her office is suing Donald Trump, his three eldest children, and the Trump Organization for falsifying business records, issuing false financial statements, conspiracy to falsify financial statements, and insurance fraud.
In essence, she alleges, they lied every day for decades about how much money they had, employing an army of compliant lawyers and appraisers to dummy up financial statements to suit any occasion.
Take the Trump Vegas, for which Eric Trump supervised an effort in 2015 to contest the tax assessment by magicking up an appraisal valuing the property at $25 million. That was the same year that Trump's financial statement valued the hotel at $108 million. It was also the year the company engaged in this spectacular feat of fuckery to get a $734 million valuation for 40 Wall Street, which had appraised at just $220 million in 2012.
\u201cThis description of Ladder Capital and Cushman Wakefield massaging the appraisal of 40 Wall Street is spectacular.\u201d— Liz Dye (@Liz Dye) 1663777071
Team Trump engaged in that particular exercise in mathematical fabulism to secure a loan from Ladder Capital, where the son of now-indicted Trump Org CFO Allen Weisselberg worked. But they had endless accounting tricks to massage the books.
A favorite play was the conservation easement, whereby they "gave up" the right to develop land that no one was ever going to let them develop in the first place. Prime examples include the Seven Springs estate in New York, which they spent two decades trying to subdivide for development. The entire parcel had a tax assessment of $19 million including the mansion and extensive grounds. Nevertheless, they claimed a $21 million easement after agreeing not to develop the unimproved portion, while keeping the mansion and grounds for themselves.
Or take the Trump golf course in Los Angeles, where a 1999 landslide pulled the 18th hole into the ocean. That didn't stop Trump from taking a conservation easement in exchange for forswearing to develop the land, which was for all intents and purposes uninhabitable due to geologic instability. After some extremely aggressive massaging by Trump's pals at Cushman Wakefield, they came up with a valuation of $21 million to compensate Trump for agreeing to continue to use the property as ... a golf course.
And lest we forget: Mar-a-Lago, where Trump signed a conservation easement in 2002 incident to converting the property from a private home to a commercial club, but which he continued to value for the purposes of his financial statements as a personal residence with the potential to subdivide for future development — something he'd expressly given up the right to do.
Sometimes they lied about Trump's wealth just to prop up the old man's ego: "Mr. Trump made known through Mr. Weisselberg that he wanted his net worth on the Statements to increase — a desire Mr. Weisselberg and others carried out year after year in their fraudulent preparation of the Statements."
In short, they lied for every and reason and no reason. From valuing golf courses based on future member initiation fees at a time when Trump was waiving initiation for new members, to claiming his apartment was the most expensive in New York by saying it was 30,000 square feet — a mere 200 percent exaggeration! — and using a preposterous value per square foot, there was no lie too big or too small. And most of these lies were memorialized in Trump's annual financial statements, which he used to secure loans and insurance.
Mr. Trump’s Statements of Financial Condition for the period 2011 through 2021 were fraudulent and misleading in both their composition and presentation. The number of grossly inflated asset values is staggering, affecting most if not all of the real estate holdings in any given year. All told, Mr. Trump, the Trump Organization, and the other Defendants, as part of a repeated pattern and common scheme, derived more than 200 false and misleading valuations of assets included in the 11 Statements covering 2011 through 2021.
As the complaint lays out, these financial statements were more or less all documentation Trump needed to get funding from Deutsche Bank after Jared hooked him up with their private wealth management department, which was happy to give him whatever he wanted as long as he promised that he was worth $2.5 billion (LOL) and agreed to personally guarantee the loans.
Starting in 2011 the relationship with Deutsche Bank was revitalized when Mr. Trump and the Trump Organization initiated a relationship with bankers in the Private Wealth Management (“PWM”) division of Deutsche Bank, which enabled them to obtain more favorable terms than they could have received through the CRE division by having Mr. Trump personally guarantee the loans based on his net worth as reflected in his Statements of Financial Condition.
And they were still at it while Trump was in the White House! "In July 2020, the Trump Organization received an appraisal with a value of $84.5 million but on the 2020 Statement the Trump Organization valued Trump Park Avenue at $135.8 million."
This filing is 222 pages, with 24 exhibits, and it makes District Attorney Alvin Bragg's decision not to prosecute Trump look atrocious. AG James will be referring the matter to the IRS and the US Attorney's Office in the Southern District of New York, of course. But mostly she's looking to put the family out of business in her state with penalties including canceling the Trump Organization's business license and appointing an independent monitor to oversee its operations, replacing the Trump kids as trustees of the Donald J. Trump Revocable Trust, forcing Trump to prepare true and accurate financial statements for all his lenders, and barring Trump and his company from entering into real estate deals or loans for five years. Plus she'd like to ban Trump, Donald Trump Jr., Ivanka Trump, and Eric Trump from serving as an officer or director in any New York corporation or similar business entity for life, after they kick up $250 million in ill-gotten gains.
In, short, this is a big fuckin' deal, and there's a reason they fought this investigation tooth and nail for four straight years. All hail Letitia James. It's her world, and we're all just living in it.
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Liz Dye lives in Baltimore with her wonderful husband and a houseful of teenagers. When she isn't being mad about a thing on the internet, she's hiding in plain sight in the carpool line. She's the one wearing yoga pants glaring at her phone.