New York AG Closing In On Trump Crime Family

The New York Times reports, N.Y. Attorney General Outlines Pattern of Possible Fraud at Trump Business:

New York State attorney general Letitia James accused Donald J. Trump’s family business late 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 Mr. Trump’s recent effort to block Ms. James from questioning him and two of his adult children under oath as part of a civil investigation of his business, the Trump Organization. Ms. James’s inquiry into Mr. Trump and the company is ongoing, and 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.

[T]he filing outlined what Ms. James’s office termed misleading statements about the value of at least 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 Mr. Trump’s own penthouse home in Trump Tower.

Ms. James’s 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 Mr. Trump’s net worth was higher than it otherwise would have appeared.”

Ms. James highlighted details of how she said the company inflated the valuations: $150,000 initiation fees into Mr. 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,” Ms. James said in a statement.

It is unusual for such specific and serious allegations to emerge in court papers — filed less than an hour before a midnight deadline to respond to Mr. Trump’s effort to avoid being questioned — instead of in a formal complaint. Ms. James’s lawyers said that the release of the details would not hamper their investigation, and added that the office was also looking into other conduct not discussed in the filing.

[B]ecause Ms. James’s investigation is civil, she can sue Mr. 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. Ms. James’s office is participating in that separate investigation, which is continuing. Mr. Bragg, also a Democrat, inherited the inquiry from his predecessor after taking office on Jan. 1.

In early December, Ms. James issued a subpoena for Mr. Trump as well as for Donald Trump Jr. and Ivanka Trump, seeking to question them as part of her civil inquiry. Ms. James already questioned another of Mr. 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.

Say what now?  “If you’re innocent, why are you taking the Fifth Amendment,” Trump said as a candidate in 2016.“The mob takes the Fifth,” Trump declared. The Trump crme family is taking the Fifth.

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

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

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

[A] case could be hard to prove. Property valuations are often subjective, and Mr. Trump’s lawyers are likely to note that his lenders and insurers — sophisticated financial institutions that turned a profit off their relationship with the Trumps — did not rely on the company’s estimates.

Ms. James has been investigating Mr. Trump’s business practices since March 2019. In previous filings, she described some of the properties she was scrutinizing and said that her investigators were looking into whether Mr. Trump had inflated values in order to secure loans and obtain economic and tax benefits.

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

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

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

In 2015, for example, while seeking to refinance a loan on his 40 Wall Street tower in Lower Manhattan, Mr. Trump’s statement of financial condition estimated that the property was worth $735 million. Yet one lender concluded it was worth only $257 million.

A year earlier, Mr. Trump valued his Aberdeenshire golf club in Scotland at $435 million. But according to Ms. James’s filing, that estimate was inflated, thanks in large part to the Trump Organization’s erroneous assumption that it could build 2,500 luxury homes on the property when, in fact, it had approval to build fewer than 1,500 “holiday apartments,” residences and golf villas.

And for years, the filing asserted, Mr. Trump’s company included the worth of Mr. Trump’s personal brand in some of its valuations of golf clubs, despite saying that it had not.

While Ms. James did not show that the company benefited from every valuation, her filing contended that the company broadly inflated its assets, which may have provided an overly rosy picture of Mr. Trump’s finances to lenders.

Ms. James’s lawyers also argued that Mr. Trump submitted at least two misleading statements to the Internal Revenue Service, saying that he substantially overstated the value of land at both his Seven Springs Estate in Westchester County and his Los Angeles golf club. The value of Seven Springs, Ms. James said, had been boosted by counting the value of seven nonexistent mansions, said to be worth $61 million. Mr. Trump received tax deductions worth millions of dollars on both properties.

Investigators accused the Trump Organization of calculating the value of Trump Tower by falsely inflating the size of Mr. Trump’s longtime home: While Mr. Trump had claimed since 2012 that his triplex penthouse apartment in the building was 30,000 square feet, he had signed documents stating its size as 10,996 square feet.

The additional square footage allowed the company to claim a $327 million value for the apartment in statements of financial condition. Ms. James said that Allen H. Weisselberg, the Trump Organization’s longtime chief financial officer, had said during questioning by Ms. James’s investigators that the apartment was overvalued by “give or take” $200 million.

Puffery, i.e., exaggeration, is legally defensible if it is within a reasonably acceptable range. “Give or take” $200 million is in no way a reasonably acceptable range.

Mr. Weisselberg, the filing contends, also falsely told one of Mr. 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.

This undermines any defense that Trump relied upon the professional advice of attorneys and appraisers. If he cannot actually demonstrate this, the defense fails.

Ms. James’s filing also faulted the work Cushman & Wakefield, a large real estate firm, whose team of appraisers provided property valuations for several Trump Organization properties that were included in statements provided to lenders and the I.R.S.

In one case in 2012, the appraisers assessed that the value of 40 Wall Street was $220 million, but just three years later determined the value to be $540 million. “The appraisal appears to have used demonstrably incorrect facts and aggressive assumptions,” the filing said.

The Attorney General office’s also said that a Cushman & Wakefield appraisal of the driving range at Trump National Golf Course in Los Angeles, which the firm valued at $25 million, was “substantially overstated.” Mr. Trump submitted that valuation to the I.R.S. to receive a tax benefit, the office said.

On Wednesday, a spokesman for Cushman & Wakefield defended the company’s work, saying that the appraisers provided valuations that were “completed in good faith based upon the material information made available” – from the Trump corporations?

Where is your independent objective professional analysis? You can’t rely on what the client tells you – client’s lie. Especially this client.

Mr. Trump’s company is already under indictment in Manhattan. In July, the former Manhattan district attorney, Cyrus R. Vance Jr., charged the company and Mr. Weisselberg with carrying out a 15-year scheme to dole out off-the-books luxury perks to certain executives. That case is scheduled to head to trial later this year.

Aaron Blake of the Washington Post lays out the 4 big points from the N.Y. attorney general’s Trump allegations:

New York Attorney General Letitia James (D) overnight gave us a significant glimpse of the hand she’s holding in her long-running investigation of former president Donald Trump, his family and their business practices.

In a lengthy 160-page filing arguing that Trump and two of his children should be deposed under oath, James says she has obtained “significant evidence” of fraud and spells out a number of investigative targets. She also points to testimony that includes key figures repeatedly invoking Fifth Amendment protection against self-incrimination, and she links Trump, Ivanka Trump and Donald Trump Jr. to relevant instances of allegedly deceiving lenders, insurers or tax authorities for financial benefit.

[H]ere are some of the more notable sections of the filing:

Eric Trump and Weisselberg invoked the Fifth more than 500 times

James’s office noted that Eric Trump and Trump Organization chief financial officer Allen Weisselberg each invoked the Fifth Amendment more than 500 times.

Eric Trump did so during an Oct. 5, 2020, interview: “Eric Trump then invoked his Fifth Amendment right against self-incrimination in response to more than 500 questions over six hours.”

Weisselberg did so during a Sept. 24, 2020, interview: “At testimony held on September 24, 2020, after answering a number of preliminary questions, Allen Weisselberg invoked his Fifth Amendment right against self-incrimination to more than 500 questions over five-and-a-half hours.”

James’s office argues that these instances show that key figures interviewed in her probe would be well-aware of potential criminal liability if they are deposed in her case. Weisselberg was indicted by the Manhattan district attorney in July, along with the Trump Organization.

Trump’s alleged involvement

While Weisselberg and the Trump Organization have been charged in a 15-year alleged tax scheme by the Manhattan district attorney, there has been some question as to whether the allegations would be tied directly to Trump or members of his family.

James’s filing sheds some light on this — particularly when it comes to Trump personally.

It says that Trump himself signed relevant documents on multiple occasions. In one case, he signed documents stating that his triplex apartment was about 11,000 square feet, the filing says, but Trump’s financial statements listed the property at 30,000 square feet, valuing it at more than $300 million.

The filing also says Weisselberg “testified that it was ‘certainly possible’ Mr. Trump discussed valuations with him and that it was ‘certainly possible’ Mr. Trump reviewed the Statement of Financial Condition for a particular year before it was finalized.”

It says another Trump Organization executive also testified that he understood Trump would review the statements before they were finalized.

In another section, it says Trump personally intervened on the valuations of properties at his golf club in Los Angeles.

Linking his children

The filing links Trump’s children, Ivanka Trump and Donald Trump Jr., to the properties at issue in perhaps less-direct ways.

It says Ivanka Trump rented an apartment at Trump Park Avenue with an option to buy for $8.5 million, but the property was valued at more than $20 million in financial statements for that year and the two following years.

It also links Donald Trump Jr. to the properties at issue, saying there is evidence he “was consulted” on the Statements of Financial Condition.

In none of these cases are they linked directly to the allegedly misleading and incorrect information filed, but the argument is that they could at the very least provide insights on information offered for the properties involved.

“Donald Trump, Donald Trump, Jr., and Ivanka Trump have all been closely involved in the transactions in question, so we won’t tolerate their attempts to evade testifying in this investigation,” James said in a statement Tuesday night.

‘It seems like they are hiding something’

The filing details an alleged effort by Trump to avoid putting things in writing.

It cites one witness self-described as a “direct representative of Donald Trump” for the Lower Hudson Valley who said he seldom corresponded in writing with Trump because Trump said he “did not want things put in writing in communications between us.”

It also describes a “junior appraiser” raising questions about why she could not communicate even about factual matters via email. Intriguingly, the appraiser wrote but never a sent a draft email stating that “it seems like they are hiding something.”

Ya think?