Court Battles

Five things to know about the New York AG’s pursuit of Trump

New York Attorney General Letitia James (D) made waves late Tuesday night, detailing preliminary evidence from her office’s investigation into former President Trump’s family business and accusing the company of repeatedly misrepresenting its assets over the years. 

The revelations came in court filings asking a judge to order Trump, his son Donald Trump Jr. and his daughter Ivanka Trump to comply with the attorney general’s subpoenas for their testimony in the probe. 

Here are five things to know about the development and the attorney general’s ongoing investigation: 

 

James’s revelation of the investigation’s focus is highly unusual 

It’s highly unusual for law enforcement to publicly reveal preliminary evidence from an ongoing investigation. In civil and criminal probes, investigators typically stay tight-lipped about anything they have uncovered or are seeking, in part because they worry about damaging a potential court case. 

The attorney general’s office said in its court filings Tuesday that it has taken the extraordinary step of opening the lid on its investigation in order to push back on Donald Trump’s attacks in court and in public that the investigation is politically motivated and being carried out in bad faith. 

“Other than appearing in New York Supreme Court beginning in August 2020 in this proceeding to compel production of necessary documents, and to seek the Court’s intervention regarding the Trump Organization’s documentary subpoena-compliance failures, OAG has largely maintained its investigation out of the public eye,” the filing reads, using an acronym for Office of the Attorney General.  

“However, because the Respondents have questioned whether OAG is pursuing in good faith a civil inquiry that may lead to civil remedial action within OAG’s statutory power, OAG now presents to the Court a showing that reflects the progress of that inquiry.” 

Lawyers with the attorney general’s office added in their brief that they don’t believe the disclosure will hamper the investigation. They also said that they are investigating other issues that were not disclosed in the court papers. 
 

AG’s investigation found the Trump Organization “misrepresented” assets  

“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 statement Tuesday night. 

Her office’s court filings detail findings that indicate Trump’s family business fraudulently manipulated valuations of six properties as well as the Trump brand. Those valuations were included on regular statements of financial condition that were prepared by Trump and company officials and provided to investors, tax collectors and financial institutions in order to obtain financial gain. 

According to the attorney general’s office, the Trump Organization sought to inflate the value of its 212-acre Seven Springs property in Westchester County, N.Y. After assessing the estate to be worth $200 million in 2007 and $291 million in 2012, new appraisals in 2016 estimated the value to be $56 million. The court papers filed Tuesday say that the Trump Organization responded to the new assessments by recategorizing the property in its statement of financial condition in order to disguise the fact that Seven Springs was worth a fraction of what it had been appraised four years prior. 

James’s office detailed similar practices related to five other properties and the Trump brand and said that the efforts helped the company win tax breaks, loans and investors. 

“Virtually all of the benefits from the misleading valuations accrued to Donald J. Trump,” the court papers allege. 

 

What investigators want to know from Trump 

One outstanding question that investigators are seeking to answer by deposing Trump and his two eldest children is their level of responsibility in the alleged scheme.

The answer will likely determine who will be targeted in any civil enforcement action that the attorney general’s office might choose to bring. 

“Here, OAG seeks the testimony of the Respondents to determine, among other things, the nature and extent of their participation in, and knowledge of, the creation of the statements of financial condition, including the procurement of property valuations and to what extent the statements were used to gain favorable loan terms and insurance coverage,” the filings read.  

“Their testimony is directly related to the focus of the investigation and is appropriate for OAG to obtain in order to achieve the public purpose of identifying and deterring acts of fraud and illegality and to determine relevant individuals’ levels of responsibility for misconduct identified in the investigation.” 

 

The AG’s probe is running parallel with a criminal investigation by the Manhattan DA 

The attorney general’s investigation is focusing on civil matters, and it is precluded from bringing criminal charges during the course of the probe. But the state’s top law enforcement office is cooperating with the Manhattan district attorney on a parallel criminal investigation that is among the most prominent looming legal headaches for Trump. 

Last year, the district attorney’s office charged the Trump Organization and its chief financial officer, Allen Weisselberg, with various counts of fraud, alleging a long-running scheme to hide unreported income from the IRS. 

It’s not entirely clear what else the criminal investigation is scrutinizing. The district attorney’s office, which is now led by Alvin Bragg (D), who was sworn in earlier this month, has said in its own court filings that it is looking into “extensive and protracted criminal conduct at the Trump Organization.” 

Under Cy Vance Jr. (D), who retired last year after a decade as Manhattan’s district attorney, the office obtained Trump’s personal tax returns following a long-running legal battle with the former president that twice reached the Supreme Court. 

 
Trump is fighting the investigation in court and seeking to discredit it in public 

Trump and his family have responded to James’s investigation with counterattacks in court and in the public sphere. 

In December, Trump sued James in federal court, seeking an injunction that would halt the probe. His lawyers argue that the state attorney general is carrying out a politically motivated witch hunt that is depriving the former president of his constitutional rights. 

“The investigations commenced by James are in no way connected to legitimate law enforcement goals, but rather, are merely a thinly-veiled effort to publicly malign Trump and his associates,” Trump said in the lawsuit. “Her mission is guided solely by political animus and a desire to harass, intimidate, and retaliate against a private citizen who she views as a political opponent.” 

James, who recently abandoned a campaign for the New York governor’s office, has denied any impropriety in the investigation and has accused Trump and his inner circle of trying to evade accountability. 

Donald Trump Jr. tweeted a video attacking James on Wednesday in response to her court filings.  

“America’s most corrupt AG won’t even directly respond to our motions about her political targeting of my family because she knows her actions are indefensible,” he wrote. “This is nothing more than political retribution from her on behalf of the entire Dem Party. She should be disbarred!” 

Tags Allen Weisselberg Donald Trump Ivanka Trump Jr. Letitia James New York Attorney General Trump Organization

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