New York state is going after Donald Trump on allegations he inflated the value of his real estate empire by billions of dollars.
In a 200-plus-page lawsuit filed on Wednesday, state Attorney General Letitia James, a Democrat running for reelection, accused the former president and three of his adult children of perpetrating a massive fraud.
The lawsuit seeks to remove Trump and his singled-out children from running the Trump Organization, prevent them from overseeing future businesses in the state, and require them to repay $250 million that was allegedly received illegally.
James is also attempting to prevent Trump and the Trump Organization from purchasing any property in New York state for five years, and to prevent the company from operating at all in the state.
Trump called the suit “another witch hunt” on his Truth Social platform. He called James a “failed A.G. whose lack of talent in the fight against crime is causing record numbers of people and companies to flee New York.”
The lawsuit alleges that Trump, along with his children Donald Trump Jr., Ivanka Trump, and Eric Trump, and senior leadership at the Trump Organization were untruthful about the worth of 23 properties and other assets used to persuade banks to loan money and to receive tax benefits and insurance coverage at more favorable terms.
The attorney general’s office maintains the former president and the Trump Organization knowingly created more than 200 incorrect valuations of Donald Trump’s assets from 2011 through 2021.
“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,” Alina Habba, a Trump attorney, told news outlets. “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.”
Some of the allegations were referred to federal authorities and the IRS to potentially pursue criminal charges.
“For too long, powerful, wealthy people in this country have operated as if the rules do not apply to them. Donald Trump stands out as among the most egregious examples of this misconduct,” James said in a statement. “There are not two sets of laws for people in this country; we must hold former presidents to the same standards as everyday Americans.”
One of the properties included in the lawsuit was the Trump Tower triplex in Manhattan, the former president’s previous primary residence. The penthouse apartment was assessed as encompassing 30,000 square feet—instead of the 11,000 square feet it actually spanned, according to the attorney general’s office. The embellished square footage meant the apartment could be valued at a much higher price, $327 million, more than three times the price of any New York City apartment ever sold up to that point.
“It’s somewhat surprising to miss that,” says national real estate appraiser Jonathan Miller of the square footage.
Another property singled out was Trump Park Avenue, where unsold residential units were alleged to have been valued much higher in official documents than the Trump Organization’s own estimations. These valuations also failed to take into account that many of these units were rent-stabilized, so were worth much less than market values.
Trump’s clubs also came under scrutiny, including Mar-a-Lago, Trump’s current home. The Palm Beach, FL, resort was allegedly valued at $739 million based on the premise that it could be used for residential purposes. However, Trump signed deeds that limited the use of the property to predominantly a social club—which would put the value closer to $75 million, according to the attorney general’s office.
Eric Trump refuted those claims.
“Mar-A-Lago is arguably one of the most valuable properties in the United States. This assertion is absolutely asinine,” he tweeted in response to the allegations.
Many other properties were mentioned in the lawsuit. However, the charges won’t be easy to prove, especially as real estate appraisals often vary.
“It’s harder to price a high-end property because it’s not a generic property,” says real estate appraiser Miller. Sometimes it can be difficult to find similar real estate for comparison. “It’s harder for a seller to price accurately.”
However, fudging the worth of real estate, while not common, happens more than most people realize, says Miller. He did not comment on the lawsuit.
“In any profession, there is a small percentage of people who are morally flexible. That damages the reputation of the entire industry, and it’s a shame,” says Miller. “When you’re valuing real estate assets, the size of some of these assets can be off by millions of dollars.”
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