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Evidence shows Trump Organization misstated asset values for more than a decade, New York AG says

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The New York Attorney General’s Office claimed in a court filing Tuesday that it had “uncovered strong evidence” that the Trump Organization’s financial statements were based on “misleading assessments of its real estate assets” for more than a decade.

According to the lawsuit, the corporation owned by ex-President Donald Trump utilized those possibly deceptive values “and other misrepresentations” to “obtain economic benefits — including loans, insurance coverage, and tax deductions — on terms more favorable than the underlying circumstances merited.”

Attorney General Letitia James made the claims in response to the Trump Organization and Donald Trump’s appeal of a Manhattan state court judge’s order directing Trump and two of his adult children, Donald Trump Jr. and Ivanka Trump, to submit to interviews by James’ investigators, which was issued last month.

According to the document, James issued subpoenas to those three people “to assist in reaching a final determination concerning whether civil fraud has been committed in connection with the asset appraisals” and “who may be accountable for such fraud.”

The Trump Organization’s financial statements from 2010 to 2012 “collectively valued” rent-stabilized apartment units it controlled at $49.59 million, which was “more than sixty-six times the total value the independent appraiser had assigned to these apartments,” according to a footnote in the filing.

The attorney general has stated that she is initiating both a civil and criminal inquiry into the corporation.

“Mr. Trump personally confirmed the veracity of the Statements before to 2016, when his assets were put in a revocable trust,” James said in the petition, “while Donald Jr. was responsible for the Statements from 2016 until 2020.”

According to the lawsuit, from 2012 to 2016, Trump’s triplex apartment at Trump Tower in Manhattan “exceeded 30,000 square and was valued at up to $327 million based on those dimensions” in the company’s financial statements.

However, according to the filing, the company’s statement in 2017 “slashed the apartment’s worth by two-thirds, sizing the residence at just under 11,000 square fees,” which is the size stipulated in the building’s offering plan.

Trump’s first year as president of the United States was also that year.

According to James’ petition, Trump Organization Chief Financial Officer Allen Weisselberg and Controller Jeffrey McConney “had a part in drafting the financial statements at the heart of this investigation.”

Weisselberg and McConney were among more than 40 witnesses interviewed in her office’s civil investigation into the corporation, according to the attorney general.

Weisselberg “agreed that the apartment’s worth had been exaggerated by “give or take” $200 million when questioned about Trump’s personal residence,” according to the lawsuit.

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“So far, the investigation has uncovered significant evidence potentially indicating that these financial statements relied on misleading asset valuations and other misrepresentations for more than a decade,” James wrote in a filing with the First Department Appellate Division of the New York Supreme Court.

Requests for response from Trump’s spokeswomen and the Trump Organization were not immediately returned.

For years, James has been looking into Trump’s business.

Sworn testimony from Trump’s former personal lawyer Michael Cohen launched the investigation.

Cohen said before Congress that the Trump Organization used multiple assessments for the same buildings to get better loan and insurance terms and cut their taxes.

Donald Jr. and his brother Eric Trump, who was previously questioned in the investigation, oversee the Trump Organization.

When Eric Trump and Weisselberg were deposed separately in the probe, they each “repeatedly cited [their] Fifth Amendment privilege against self-incrimination, refusing to answer more than 500 questions apiece,” according to the complaint.

Ivanka Trump previously worked with the company as a senior executive.

According to the complaint, Ivanka had an option to buy the Trump Park Avenue penthouse where she lived for $8.5 million from 2011 to 2013, despite the Trump Organization’s financial filings valuing the same apartment at up to $25 million.

After Ivanka bought an option to buy an even bigger condo for $14.3 million in 2014, “the next year’s Statement decreased the larger flat’s worth from $45 million,” which was its previously assigned value, to the option price that she had actually paid,” according to the petition.

In February, James’ office reported that the Trump Organization’s long-time accounting firm, Mazars, had been sacked as a client after declaring that a decade’s worth of financial statements describing Donald Trump’s financial health “could no longer be relied on.

Last August, the Manhattan District Attorney won a criminal indictment against Weisselberg, the Trump Organization, and a subsidiary of the company, accusing them of a conspiracy that had enabled Weisselberg and other company officials dodge taxes on their compensation since 2005.

In that case, the defendants have pled not guilty.

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