N.Y. FILING accuses Trumps of misstating assets’ value.

Filing: Value of properties inflated to lenders, insurers, IRS

NEW YORK — The New York state attorney general, Letitia James, accused Donald Trump’s family business Tuesday of repeatedly misrepresenting the value of its assets to bolster its bottom line, saying in court papers that the company had engaged in “fraudulent or misleading” practices.

The filing came in response to Trump’s recent effort to block James from questioning him and two of his adult children under oath as part of a civil investigation of The Trump Organization. James’ inquiry into Trump and the company is ongoing.

It is unclear whether her lawyers will ultimately file a lawsuit against them. Still, the filing marked the first time that the attorney general’s office leveled such specific accusations against the former president’s company.

The filing outlined what James’ office termed misleading statements about the value of six Trump properties, as well as the “Trump brand.” The properties included golf clubs in Westchester County, N.Y., and Scotland; flagship buildings such as 40 Wall Street in Manhattan; and Trump’s penthouse home in Trump Tower.

James’ filing argued that the company misstated the value of the properties to lenders, insurers and the Internal Revenue Service. Many of the statements, the filing argued, were “generally inflated as part of a pattern to suggest that Trump’s net worth was higher than it otherwise would have appeared.”

James highlighted details of how she said the company inflated the valuations: $150,000 initiation fees into Trump’s golf club in Westchester that it never collected; mansions that had not yet been built on one of his private estates; and 20,000 square feet in his Trump Tower triplex that did not exist.

“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 statement.

It is unusual for such specific and serious allegations to emerge in court papers instead of a formal complaint. The papers were filed less than an hour before a midnight deadline to respond to Trump’s effort to avoid being questioned.

James’ lawyers said the release of the details would not hamper their investigation, adding that the office was also looking into other conduct not discussed in the filing.

A spokeswoman for the Trump Organization called the allegations baseless and repeated accusations that James’ inquiry was entirely politically motivated, after she ran for office promising to target Trump.

“Three years later, she is now faced with the stark reality that she has no case,” the spokeswoman said Wednesday.

Because James’ investigation is civil, she can sue Trump and his company but cannot file criminal charges.

Her inquiry is running parallel to a criminal investigation led by the Manhattan district attorney, Alvin Bragg, which is examining some of the same conduct. James’ office is participating in that separate investigation, which is continuing.

Bragg, also a Democrat, inherited the inquiry from his predecessor after taking office Jan. 1.

In early December, James issued a subpoena for Trump as well as for Donald Trump Jr. and Ivanka Trump, seeking to question them as part of her civil inquiry. James already questioned another of Trump’s sons, Eric Trump, in October 2020. He invoked his Fifth Amendment right against incriminating himself in response to more than 500 questions, the new court filing said.

After receiving the subpoenas, lawyers for Trump filed a federal lawsuit seeking to halt James’ civil investigation and to bar her office from participating in the district attorney’s criminal investigation. The lawsuit, which accused James of violating Trump’s constitutional rights, argued that her investigation was politically motivated and cited a long list of her public attacks on Trump.

This month, Trump’s lawyers also filed court papers in New York state seeking to block James’ subpoenas, prompting her filing Tuesday.

James, who is running for reelection this year, argued in the court papers that while her office had compiled evidence that Trump’s company had engaged in possible fraud, investigators needed to question Trump to determine who was responsible for “the numerous misstatements and omissions made by him or on his behalf” — and whether they were intentional.

Alan S. Futerfas, a lawyer for Donald Trump Jr. and Ivanka Trump, said in a statement Wednesday that the attorney general’s court papers did not address the central arguments the family raised in the effort to block the questioning.

“In 160 pages of legal briefing, the Attorney General’s Office deliberately fails to address Ms. James’ 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,” the statement said.

In Tuesday’s filing, she gave examples in which she said the former president’s business had misrepresented the worth of some of its properties and showed how those claims had benefited the company, allowing it to receive favorable loans, insurance coverage and tax benefits.

The accusations center on Trump’s statements of financial condition, the annual record of his assets and liabilities that he gave to lenders and insurers.

Trump’s lawyers are likely to point to disclaimers in these statements that the data had not been audited or authenticated. But James’ office said he “was personally involved in reviewing and approving the statements of financial condition before their issuance.”

James said Allen H. Weisselberg, the Trump Organization’s longtime chief financial officer, had said during questioning by James’ investigators that an apartment was overvalued by “give or take” $200 million.

Weisselberg, the filing contends, also falsely told one of Trump’s insurance companies that the property valuations were based on assessments by professional appraisers, when that was not the case. In reality, “the valuations were prepared by Trump Organization staff,” the filing said.

A lawyer for Weisselberg, Mary E. Mulligan, declined to comment.