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Donald Trump's business empire is in jeopardy by widespread New York fraud lawsuit

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New York Attorney General Letitia James sued Donald Trump and his three adult children on Wednesday.

James is seeking penalties that, if imposed, could effectively end the former president’s real estate career and jeopardize the very Trump Organization started by his father in Queens in the 1920s. .

These include banning Trump and his children Donald Jr., Ivanka and Eric from working again as officers of companies registered in New York.

The attorney general is asking the court to compel the Trumps to repay at least $250 million in what she claims is ill-gotten income. James also said her office will submit evidence to the Justice Department for potential criminal charges, including bank fraud.

Citing his 1987 memoir, James said, “Trump thought he could get away with the art of stealing, but today the act is over.” Art of the Deal It helped polish Trump’s image as a real estate mogul with a touch of Midas. .

The lawsuit represents an unusual case against a former US president who remains the most powerful figure in the Republican Party and is considering re-running for the White House.

It was the culmination of an almost three-year investigation that has marked violent clashes between the Attorney General and the Trumps and their attorneys. Trump has repeatedly accused James, a Democrat, of conducting a “witch hunt” to destroy his own political career.

A spokesperson for the Trump Organization on Wednesday called the lawsuit “political harassment” and denied claims that any group was victimized by the family.

“Not only were none of the banks harmed, in fact, they made hundreds of millions of dollars in interest and fees and never had a problem with the loans in question,” the spokesperson said. .

Many of the details of James’ lawsuit were previewed in January’s legal papers. ‘s statement of financial position.

According to James, Trump claimed the number was rising every year. To achieve that, Trump routinely inflated the value of assets such as office towers, golf clubs and even former president Mar-a-Lago’s estate, she said. We were able to secure financial benefits, including access to financing.

Then, she argued, Trump would minimize the value of those same assets and pay less taxes. was included.

“With the help of Donald Jr., Eric, Ivanka, and other defendants, Trump has used a variety of methods to increase his net worth in the billions to obtain and pay off loans, receive insurance benefits, and reduce taxes. We inflated and deflated,” said James.

Among the many examples in the over 200-page complaint was Trump’s own penthouse apartment. He valued it at $327 million in 2015 — more than $100 million for an apartment in the city. It was never sold for The Trumps justified this by nearly tripling the square footage estimate for the apartment.

Another case involved 40 Wall Street, an office tower in Lower Manhattan. According to James, Trump reduced it to $524 million in 2011, even though another client’s valuation put the same building at about $200 million by real estate services firm Cushman & Wakefield. was evaluated as

Former President James claimed he added a 30% brand premium to any property just by bearing Trump’s name.

In addition to the Trumps, the lawsuit also includes the Trump Organization’s longtime chief financial officer, Allen Weisselberg, and its administrator, Jeffrey McConney. In August, Weisselberg pleaded guilty to 15 counts stemming from criminal tax fraud in dealing with prosecutors, who are expected to face five months in prison.

James’ prosecution of Trump has been a protracted affair, with repeated legal delays and questions about the strength of her evidence and the merits and consequences of indicting the former president.

A parallel criminal investigation by Manhattan District Attorney Alvin Bragg appeared to have stalled this year after the two prosecutors overseeing it suddenly resigned. Bragg said in a statement Wednesday that his investigation was “active and ongoing.”

One challenge that has plagued prosecutors is that the parties Trump dealt with were major lenders such as Deutsche Bank. These banks should be expected to perform their own due diligence, regardless of the family’s allegations, especially given Trump’s reputation for hyperbole and bragging.

Additionally, Trump’s annual financial statements, which were prepared with the assistance of his former accountant, Mathers, were not formally audited by the company. He cut it off and said he could no longer vouch for his 10-year financial statements.

Trump, on the other hand, is known not to keep detailed written records. Prosecutors wanted Weisselberg to help them, but he refused to testify against his superiors.

In a criminal case, the prosecutor must persuade the jury beyond reasonable doubt. The civil lawsuit filed by James has a low burden of proof.

Meanwhile, the Trump Organization could face more complex issues, according to McLaughlin & Stern attorney Daniel Horwitz. “Anyone accused of fraud will inevitably face some resistance from financial institutions,” he said.

While the attorney general filed a complaint in Manhattan, one of the former president’s longtime allies, Tom Barack, was on trial in Brooklyn on charges of illegal lobbying on behalf of the United Arab Emirates. rice field.

On the first day of the trial, prosecutors rolled out allegations that Barack “acted as the eyes, ears and voice of the United Arab Emirates” for two years when he allegedly tried to insert points into Trump’s speeches. Regarding classified information to Abu Dhabi.

His attorney, Michael Schacter, dismissed these allegations as “absurd,” saying private equity investors actually sided with Qatar on Trump and put the gas-rich emirate on a regional embargo. He claimed that he had appealed to neighboring countries, including the UAE, to oppose the imposition of

“Tom helped Qatar, the UAE’s enemy,” Schacter said. He described Barrack as “his own man” and dismissed the idea that the founder and chairman of the $40 billion investment business could have been hired at foreign direction. He did it because he believed in it.”

Additional reporting by Mark Vandevelde, New York

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