New York's Attorney General is disclosing new details about what she says her ongoing investigation into former president Donald Trump's business has uncovered, including information that involves some of Trump's children.
Letitia James said in court filings Tuesday that the investigation found instances where Donald Trump Jr. and Ivanka Trump provided misleading financial representations to institutions. The investigation also uncovered that the former president "had ultimate authority over a wide swath of conduct by the Trump Organization involving misstatements to counterparties, including financial institutions, and the Internal Revenue Service," according to a court filing.
The court filing alleges that "since 2017, Donald Trump, Jr. has had authority over numerous financial statements containing misleading asset valuations." The filing also asserts that "until January 2017, Ms. Trump was a primary contact for the Trump Organization’s largest lender, Deutsche Bank. In connection with this work, Ms. Trump caused misleading financial statements to be submitted to Deutsche Bank and the federal government."
The Trump Organization, in a statement, blasted James in strident terms, saying she had "no case" and even making reference to her recent brief campaign for governor.
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"So, in response to Trump suing her and filing multiple ethical complaints, and on the heels of her failed governor's race, she has no choice but to mislead the public yet again by misrepresenting the facts and ignoring her own inflammatory comments. Her allegations are baseless and will be vigorously defended," the company said in a statement.
The disclosure is in response to Trump's legal efforts to quash a series of subpoenas served against him, his son Donald Jr. and his daughter as part of James' civil investigation, which is separate from a criminal investigation primarily being led by new Manhattan District Attorney Alvin Bragg.
"Light of the pervasive and repeated nature of the misstatements and omissions, it appears that the valuations in the Statements were generally inflated as part of a pattern to suggest that Mr. Trump’s net worth was higher than it otherwise would have appeared," the filing states.
Previously, Trump's legal team said the state attorney general "is engaged in a criminal investigation that has an active grand jury. It cannot issue subpoenas for testimony under the guise of a civil investigation that will immediately become available" to its own criminal investigation, the lawyers argued in their motion to quash the subpoenas.
"The subpoenas are an obvious improper end-run around the rules," they added.
Attorneys for the Trumps also requested the judge postpone the depositions until after the criminal probe if the motion to quash the subpoenas is rejected.
In response to what she called "delay tactics and litigation in an attempt to thwart a legitimate investigation," James said in a press release late Tuesday night that her office "will not be deterred" in the 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. "The Trumps must comply with our lawful subpoenas for documents and testimony because no one in this country can pick and choose if and how the law applies to them."
The attorney general's office said there was "significant evidence" that the Trump Organization used the false or misleading statements in order to get economic benefits, like loans, insurance coverage and tax deductions. James' office said that a final decision regarding whether the evidence merits legal action has not yet been made, but said what has been found thus far gives grounds for continuing the investigation.
The motions filed on Tuesday were done so in order to get testimony and evidence from high-ranking members of the organization, in order to determine who may have been closely involved or had knowledge of the misleading statements and information, James' office said. The attorney general's office said that more than a dozen current and former Trump Organization employees have recently provided sworn testimony, but Trump, Donald Jr. and Ivanka have refused to do so, despite subpoenas and their high-ranking roles.
Some of the alleged misleading statements include:
- Objective facts, like the size of the former president's Trump Tower penthouse
- The process by which Trump or his associates reached valuations, including variations from generally accepted accounting principles in ways that the statements didn't disclose
- Failing to use standard valuation techniques, like discounting future revenues and expenses to their present value, or choosing as “comparables” only similar properties in order to impute valuations from public sales data
- The purported involvement of “outside professionals” in reaching the valuations; and
- Failing to advise that certain valuation amounts were inflated by an undisclosed amount for brand value
One judge has previously sided with James on an earlier request to question another Trump son, Trump Organization executive Eric Trump, who ultimately sat for a deposition but declined to answer some questions.
Last year, the Manhattan district attorney brought tax fraud charges against the Trump Organization and Weisselberg, its longtime chief financial officer.
Weisselberg pleaded not guilty to charges alleging he and the company evaded taxes on lucrative fringe benefits paid to executives.
Both investigations are at least partly related to allegations made in news reports and by Trump’s former personal lawyer, Michael Cohen, that Trump had a history of misrepresenting the value of assets.
The disclosures about the attorney general's investigation came the same day as Trump ally Rudy Giuliani and other members of the legal team that had sought to overturn the results of the 2020 presidential election were subpoenaed by a House committee investigating the U.S. Capitol insurrection.