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Home LATEST NEWS Trump's New York Lawsuit Is About Overstating His Wealth: Quartz

Trump’s New York Lawsuit Is About Overstating His Wealth: Quartz

New York Attorney General Letitia James sued Donald Trump, along with family members and employees, on September 21, alleging “numerous acts of fraud and misrepresentation” in the Trump Organization’s annual financial statements from 2011 to 2021.

In the demand (pdf) filed in New York state court, James brought civil charges and recommended that the US Department of Justice bring criminal charges against Trump and his associates. James alleges that Trump “vastly inflated” his net worth by billions of dollars each year to obtain loans for his business and more favorable insurance policies from him. Trump’s children Ivanka, Eric and Donald Jr. are named as co-defendants along with Trump Organization finance chief Allen Weisselberg and controller Jeffrey McConney. Trump’s attorney, Alina Habba, said the lawsuit “does not focus on the facts or the law” but instead “advances the attorney general’s political agenda.”

By suing, James wants to collect $250 million in civil damages and essentially bar Trump and the Trump Organization from doing business in New York.

These are the most egregious accusations levied against Trump in the lawsuit:

Trump inflated the value of his Trump Tower apartment

In 2011, Trump reportedly valued his Trump Tower triplex apartment at $80 million, but four years later he reported a 400% increase in valuation to $327 million. “That price was absurd given that at the time only one apartment in New York City had sold for $100 million, at a price per square foot of less than $10,000,” the suit says. This appraisal estimated the value of the apartment at $29,738 per square foot. The property was also listed as over 30,000 square feet when it was actually about 11,000 square feet. Trump only downgraded his estimates of the triplex’s size and valuation when Forbes published a 2017 item titled, “Donald Trump has been lying about the size of his penthouse.”

Trump played both ways with Mar-a-Lago

Trump’s Mar-a-Lago property in Palm Beach, Florida, is restricted from development under a conservation easement that Trump made in the 1990s. The conservation easements are tax breaks in exchange for limitations on how it can be developed. and use the land.. Under the deal, the property can only be used as a social club, but the Trump Organization priced it as if it could be sold to a single owner, raising its estimated price. The New York Times previously reported that conservation easements for multiple Trump properties have given the former president close to $100 million in tax exemptions. But the government alleges that in the financial statements Trump failed to value the property based on the conservation easement’s development restrictions, and that he also lied about his per-acre price assessment.

Trump Song About Golf Club Membership Fees

In financial statements evaluating one of his golf courses in Westchester County, New York, Trump tallied 67 unsold memberships that would cost a $200,000 startup fee, an anticipated windfall of $13 million, even though Trump regularly waived and lowered such startup fees to boost course membership.

This was a tactic Trump allegedly used to inflate the value of his golf courses and resorts.

Trump secured favorable loan terms

Deutsche Bank is the largest individual financier of the Trump Organization and the complaint says that, as of May 2022, the organization owes the bank $340 million and regularly pays tens of millions each year on that debt.

James claims that Trump and the Trump Organization fraudulently inflated the value of his assets to guarantee and obtain loans to purchase the Old Post Office building in Washington, DC ($170 million loan); a resort in Doral, Florida ($125 million loan); and a hotel in Chicago ($45 million loan).

Deutsche Bank offered Donald Trump and Donald Trump Jr. “unbeatable rates” on the loans, as Trump personally guaranteed them. “It doesn’t get any better than this,” Ivanka Trump wrote in an email after seeing the terms of a loan.

The government alleges that the Trump Organization saved between $85 million and $150 million because of these favorable interest rates. James also revealed today that Deutsche Bank has cooperated with your office during the investigation.


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