Donald Trump sued for fraud by New York state attorney general

New York's attorney general sued former U.S. president Donald Trump and his company for fraud on Wednesday, alleging they padded his net worth by billions of dollars by manipulating the value of prized assets including golf courses, hotels and his homes at Trump Tower and Mar-a-Lago.

Attorney General Letitia James dubbed it: "The art of the steal."

James's lawsuit, filed in state court in New York, is the culmination of the Democrat's three-year civil investigation of Trump and the Trump Organization. Trump's three eldest children, Donald Jr., Ivanka and Eric Trump, were also named as defendants, along with two longtime company executives, Allen Weisselberg and Jeffrey McConney.

The lawsuit strikes at the core of what made Trump famous, taking a black light to the image of wealth and opulence he's embraced throughout his career first as a real estate developer, then as a reality TV host on The Apprenticeand Celebrity Apprentice,and later as president.

James wants Trump and business to pay $250M

James wants Trump and his business to pay at least $250 million US, which she said was the approximate worth of the benefits it got through fraudulent practices.

James, a Democrat, announced details of the lawsuit at a news conference on Wednesday. She said her office filed the case which is civil, not criminal in nature after rejecting settlement offers made by lawyers for the defendants.

The alleged scheme was intended to burnish Trump's billionaire image and the value of his properties when doing so gave him an advantage, such as in obtaining favourable loan terms, while playing down the value of assets at other times for tax purposes, James's office said.

"This investigation revealed that Donald Trump engaged in years of illegal conduct to inflate his net worth, to deceive banks and the people of the great state of New York," James said at the news conference. "Claiming you have money that you do not have does not amount to the art of the deal. It's the art of the steal."

James said her investigation uncovered potential criminal violations, including falsifying business records, issuing false financial statements, insurance fraud, conspiracy and bank fraud. She said her office is referring those findings to federal prosecutors and the Internal Revenue Service.

Trump responds

In a statement posted to his Truth Social platform, Trump called the lawsuit "another witch hunt by a racist attorney general" and called James, who is Black, "a fraud who campaigned on a 'Get Trump' platform, despite the fact that the city is one of the crime and murder disasters of the world under her watch!"

Alina Habba, a lawyer for Trump, said the lawsuit "is neither focused on the facts nor the law rather, it is solely focused on advancing the attorney general's political agenda."

"It is abundantly clear that the Attorney General's Office has exceeded its statutory authority by prying into transactions where absolutely no wrongdoing has taken place," Habba said. "We are confident that our judicial system will not stand for this unchecked abuse of authority, and we look forward to defending our client against each and every one of the Attorney General's meritless claims."

James is seeking to remove the Trumps from businesses engaged in the alleged fraud and wants an independent monitor appointed for no less than five years to oversee the Trump Organization's compliance, financial reporting, valuations and disclosures to lenders, insurers and tax authorities.

She is seeking to replace the current trustees of Trump's revocable trust, which controls his business interests, with independent trustees, to bar Trump and the Trump Organization from entering into commercial real estate acquisitions for five years, from obtaining loans from banks in New York for five years and permanently bar Trump and three of his adult children from serving as an officer or director in any New York corporation or similar business entity registered and/or licensed in New York state.

She also seeks to permanently bar Weisselberg and McConney from serving in the financial control function of any New York corporation or similar business entity registered and/or licensed in New York state.

WATCH | New York attorney general suit against Trump seeks $250M:

Donald Trump sued for fraud by New York attorney general

2 years ago

Duration 2:04

New Yorks attorney general has filed a lawsuit accusing former U.S. president Donald Trump and his company of repeatedly misleading banks and government departments about the value of properties to pad his net worth.

James's lawsuit comes amid a swirl of unprecedented legal challenges for a former president, including an FBI investigation into Trump's handling of classified records and inquiries into his efforts to overturn the 2020 election.

The Trump Organization is set to go on trial in October in a criminal case alleging that it schemed to give untaxed perks to senior executives, including its longtime finance chief Weisselberg, who alone took more than $1.7 million US in extras.