- Bernd Debusmann Jr and Kayla Epstein
Donald Trump and three of his children have been sued for fraud after an investigation in New York concluded into their family business, the Trump Organization.
They are accused of having lied “for billions” about the value of real estate to obtain loans and pay less taxes.
Prosecutors say the Trump Organization committed numerous acts of fraud between 2011 and 2021.
Trump has dismissed the suit as “another witch hunt.”
Two Trump Organization executives, Allen Weisselberg and Jeffrey McConney, were indicted along with the former president and his eldest children, Donald Jr, Ivanka and Eric Trump.
The lawsuit has been filed by New York Attorney General Letitia James, who is the state’s top lawyer, after conducting a three-year civil investigation.
His office does not have the power to file criminal charges, but does refer reports of criminal wrongdoing to federal prosecutors and the Internal Revenue Service (IRS).
“With the help of his children and top executives in the Trump Organization, Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and cheat the system,” James said in a statement.
He also claimed that Trump’s apartment in the building that bears his last name, Trump Tower, which was valued at $327 million, is one of the properties whose values were allegedly misrepresented.
“No apartment in New York City has ever sold for anywhere near that amount,” James added.
“White-collar financial crimes are not victimless crimes,” the attorney general said.
“When well-connected people break the law to get more money than they’re entitled to, it reduces the resources available to workers, ordinary people, small businesses and all taxpayers.”
Prosecutor James is seeking to recover an estimated $250 million, which she said was the result of fraud, calling the situation “the art of theft.”
James is asking a court to bar the former president and his children from serving as officers or directors in any New York company.
It also seeks to bar the Trump Organization from engaging in real estate transactions there for five years.
The announcement comes after James, a Democrat running for re-election in November, turned down at least one offer to settle the long-running civil investigation into the company’s business practices.
In a reaction against the lawsuit on his Truth Social website, Trump called James, who is black, a racist.
“Another witch hunt by a racist attorney general, Letitia James, who failed to run for governor and garnered almost no public support,” she wrote.
On Twitter, Donald Trump Jr accused DA James of “using her office as a weapon to go after her political opponents.”
In August, Trump declined to answer questions during an interview at the attorney general’s office related to this civil investigation. James said the former president repeatedly invoked his Fifth Amendment right not to incriminate himself, confirming only his name.
The prosecutor also said that Eric Trump did the same thing more than 500 times in a 2020 statement.
Origin of demand
This lawsuit dates back to Michael Cohen, a former attorney for former President Trump, and his dramatic testimony before Congress in 2019.
Cohen described Trump as a “con man” who repeatedly exaggerated his wealth in financial documents in order to receive favorable loans from banks and insurance coverage.
That caught the attention of prosecutor Letitia James, who said Wednesday that her investigation began only after Cohen shed light on the alleged misconduct.
Former President Trump fought her throughout in court, but his attempts to ignore her subpoenas and block her investigation entirely were unsuccessful.
When he sat for a four-hour, court-ordered deposition earlier this year, he invoked his Fifth Amendment right against self-incrimination more than 400 times.
What awaits Trump
Although Trump cannot go to criminal trial for these accusations, he can do it civilly. Perhaps seeing what was coming, his legal team tried to reach a settlement, but was rebuffed.
He has a long legal battle ahead of him and now he also has to worry about whether this will turn into a criminal proceeding.
Tristan Snell, a lawyer and former prosecutor who worked on another case against Trump University, told the BBC the lawsuit could take a year to go to trial.
But the potential for such a trial could severely restrict Trump’s ability to do business in New York and profit from his significant real estate holdings there. It could trigger a series of financial consequences that would make it difficult for you to raise capital and maintain credit, Snell said.
“It could definitely be the ruin of him”he concluded.
The lawsuit is one of several legal issues facing the former president.
On August 8, the FBI executed a search warrant at his home in Mar-a-Lago, Florida, as part of an investigation into his handling of classified records. He is also being investigated in Georgia in relation to his efforts to overturn the results of the 2020 presidential election.
Trump has denied wrongdoing in those investigations.
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