'Significant evidence' of alleged fraud in Trump business investigation, NY AG says

AG Letitia James made the statement regarding an ongoing civil probe.

January 19, 2022, 8:16 AM

New York Attorney General Letitia James said that her office has uncovered "significant evidence" of fraud in her civil investigation of former President Donald Trump and the Trump Organization.

The unusual statement amid an ongoing investigation came as James' office argued in court papers that Donald J. Trump, Donald Trump, Jr., and Ivanka Trump have not sufficiently responded to subpoenas issued as part of the investigation.

"Thus far in our investigation, we have uncovered significant evidence that suggests Donald J. Trump and the Trump Organization falsely and fraudulently valued multiple assets and misrepresented those values to financial institutions for economic benefit," James said in a release late Tuesday night. "The Trumps must comply with our lawful subpoenas for documents and testimony because no one in this country can pick and choose if and how the law applies to them."

The motion to compel their testimony, filed late Tuesday after the Trumps sought to quash the subpoenas, said each of the individuals was directly involved in one or more transactions under review. The investigation is reviewing whether the Trump Organization used fraudulent or misleading valuations of its holdings in different ways to obtain a host of economic benefits, including loans, insurance coverage, and tax deductions.

A parallel criminal investigation is underway by the Manhattan District Attorney’s office that has already resulted in criminal charges against the company itself and its chief financial officer. Each has pleaded not guilty.

PHOTO: Former President Donald Trump speaks during the Rally To Protect Our Elections conference, July 24, 2021, in Phoenix.
Former President Donald Trump speaks during the Rally To Protect Our Elections conference, July 24, 2021, in Phoenix.
Brandon Bell/Getty Images, FILE

The Trumps have repeatedly denied wrongdoing and attacked the investigations as politically motivated.

"In 160 pages of legal briefing, the Attorney General’s Office deliberately fails to address Ms. James’s repeated threats to target the Trump family and her assertions about her criminal investigation – all which are the essence of our motion to quash the subpoenas or stay them," Trump Organization attorney Alan Futerfas said in a statement. "The Office fails to answer how they can be conducting a criminal investigation and indicting on July 1, 2021, the arraignment of which Ms. James attended arm in arm with Cy Vance and issued press releases and talk show statements about, and yet ignore the NY Constitutional grand jury protections provided to the very people she is investigating.”

The Trumps have “used delay tactics and litigation in an attempt to thwart a legitimate investigation into its financial dealings,” James said in a statement.

The investigation began in March 2019, after Trump’s former lawyer, Michael Cohen, testified before Congress that Trump’s annual financial statements inflated the values of Trump’s assets to obtain favorable terms for loans and insurance coverage, while also deflating the value of other assets to reduce real estate taxes.

According to the filing, investigators have determined that the "Statements of Financial Condition " issued annually to describe Trump's financial condition described the valuation process in broad terms and in ways which were often inaccurate or misleading when compared with the supporting data and documentation that the Trump Organization submitted to its accounting firm.

For instance, the AG's office alleges that the statements misstated facts, like the size of Trump's New York penthouse and alleges that there's evidence the Trump Organization submitted "false or misleading" valuations to the IRS pertaining to a golf course in LA and property in Westchester County, New York.

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