Trump Organization continues ‘fraudulent’ practices after lawsuit, New York AG says

New York Attorney General Letitia James is seeking a preliminary injunction as part of her $250 million civil suit against former President Donald Trump to end what she says is his continued fraudulent conduct.

On the same day last month that James filed a lawsuit accusing Trump, his three eldest children and two business executives of ‘staggering’ fraud which she says ‘grossly inflated’ Trump’s net worth, the Trump Organization quietly registered a new entity, the Trump Organization. II, according to a new court filing Thursday.

Investigators suspect Trump may be transferring assets from his family real estate business to the new entity in an effort to escape liability posed by the lawsuit, according to the attorney general’s motion for a preliminary injunction.

“[T]The Trump Organization now appears to be taking steps to restructure its operations to avoid existing liabilities under New York law,” the filing said.

Thursday’s filing also made it clear that James was concerned that Trump and the other defendants could use the same alleged “fraud and misrepresentation” when preparing Trump’s financial statements for the current year. For example, the filing claims that Trump’s current valuation for his Mar-a-Lago estate still does not account for property use restrictions, and that Trump continues to process $93 million held in partnership with Vornado. Realty Trust as its own treasury.

“Indeed, in many areas, the Trump Organization continued to use practices it knew were inappropriate or fraudulent,” the motion reads.

Trump’s attorney, Alina Habba, called the filing “nothing more than a thinly veiled attempt to keep this case with Judge Engoron rather than transfer it to the business division where she belongs.”

Former President Donald Trump acknowledges his supporters during a rally, Sunday, Oct. 9, 2022, in Mesa, Arizona.

Matt York/AP, FILE

“We have repeatedly assured in writing that the Trump Organization has no intention of doing anything improper,” Habba said in a statement. “It’s just another stunt that Ms James hopes will help her in her failed political campaign.”

James also seeks the appointment of an independent monitor to oversee the Trump Organization’s submission of financial information to accountants, lenders and insurers, “to prohibit defendants from transferring to non-party affiliates or otherwise disposing of assets without court approval,” the filing said. .

“Our investigation has revealed the fact that Donald Trump and the Trump Organization engaged in a significant fraud to inflate his personal net worth by billions of dollars in order to enrich himself illegally and cheat the system,” James said in a statement. Thursday. “Since we filed this sweeping lawsuit last month, Donald Trump and the Trump Organization have continued these same fraudulent practices and taken action to evade accountability. Today, we call for an immediate halt to these actions because Mr. Trump should not play by different rules.”

The Trump Organization did not immediately respond to James’ latest filing. Trump denied any wrongdoing and called James’ investigation a politically motivated “witch hunt” by an attorney general he called “racist.”

James, who is black, rejected a settlement offer from the Trump Organization last month to address the issue, sources told ABC News.

The lawsuit accused them of engaging in “numerous acts of fraud and misrepresentation in the preparation of Mr. Trump’s annual financial statements” that overstated the value of nearly every major property in the Trump portfolio by at least a period of ten years.

“These acts of fraud and misrepresentation grossly inflated Mr. Trump’s personal net worth, as disclosed in the statements, by billions of dollars and conveyed false and misleading impressions to financial counterparties about how the statements were made. prepared,” the lawsuit said.

“Mr. Trump and the Trump Organization have repeatedly and persistently used these false and misleading statements to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available. for the business, to meet ongoing loan commitments and to induce insurers to provide insurance coverage for higher limits and at lower premiums,” the lawsuit said.

In Thursday’s motion, James said that nearly a month after filing his lawsuit, the former president and his son Eric have refused to accept service of the lawsuit. She requested leave to serve them electronically.

The motion also requested a judicial conference to set a trial date for early October 2023.

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