NY AG: Pattern of Possible Fraud at Trump Business

In a typical residential real estate loan closing package, among the forms is one that warns against falsifying applications and financial statements and cites the significant fines and imprisonment that attach to mortgage fraud.  Commercial loans carry similar warnings of falsifying loan applications.  Yet, despite these warnings it is beginning to appear that such mortgage fraud may have been standard operation for the Trump organization - something that should surprise no one given the endless series of lies we have seen Donald Trump and his spawn disseminate.  Indeed, in New York State's investigation of possible mortgage and insurance fraud, Eric Trump invoked the Fith Amendment so as to avoid answering numerous questions.  Obviously, one doesn't take such action if one has nothing to hide. Let's hope the investigation presses forward and tighten the snare around Trump and that it scares off lenders as he faces loans coming due that he personally guaranteed.  The New York Times looks at the investigation:

The New York State attorney general, Letitia James, accused Donald J. Trump’s family business late Tuesday of repeatedly misrepresenting the value of its assets to bolster its bottom line, saying in court papers that the company had engaged in “fraudulent or misleading” practices.

The filing came in response to Mr. Trump’s recent effort to block Ms. James from questioning him and two of his adult children under oath as part of a civil investigation of his business, the Trump Organization. Ms. James’s inquiry into Mr. Trump and the company is ongoing, and it is unclear whether her lawyers will ultimately file a lawsuit against them.

Still, the filing marked the first time that the attorney general’s office leveled such specific accusations against the former president’s company. Her broadside ratchets up the pressure on Mr. Trump as he seeks to shut down her investigation, . . . The filing outlined what Ms. James’s office termed misleading statements about the value of six Trump properties, as well as the “Trump brand.” The properties included golf clubs in Westchester County, N.Y., and Scotland, flagship buildings such as 40 Wall Street in Manhattan and Mr. Trump’s own penthouse home in Trump Tower.

[T]he company misstated the value of the properties to lenders, insurers and the Internal Revenue Service. Many of the statements, the filing argued, were “generally inflated as part of a pattern to suggest that Mr. Trump’s net worth was higher than it otherwise would have appeared.”

Ms. James highlighted details of how she said the company inflated the valuations: $150,000 initiation fees into Mr. Trump’s golf club in Westchester that it never collected; mansions that had not yet been built on one of his private estates; and 20,000 square feet in his Trump Tower triplex that did not exist.

“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,” Ms. James said in a statement.

Lawyers for Mr. Trump and his company did not respond to requests for comment.

Because Ms. James’s investigation is civil, she can sue Mr. Trump and his company but cannot file criminal charges. Her inquiry is running parallel to a criminal investigation led by the Manhattan district attorney, Alvin Bragg, which is examining some of the same conduct. Ms. James’s office is participating in that separate investigation, which is continuing.

In early December, Ms. James issued a subpoena for Mr. Trump as well as for Donald Trump Jr. and Ivanka Trump, seeking to question them as part of her civil inquiry. Ms. James already questioned another of Mr. Trump’s sons, Eric Trump, in October 2020. He invoked his Fifth Amendment right against incriminating himself in response to more than 500 questions, the new court filing said.

Ms. James has been investigating Mr. Trump’s business practices since March 2019. In previous filings, she described some of the properties she was scrutinizing and said that her investigators were looking into whether Mr. Trump had inflated values in order to secure loans and obtain economic and tax benefits.

In Tuesday’s filing, she went further, giving examples in which she said the former president’s business had misrepresented the worth of some of its properties and showing how those claims had benefited the company, allowing it to receive favorable loans, insurance coverage and tax benefits.

The accusations center on Mr. Trump’s statements of financial condition, the annual record of his assets and liabilities that he gave to lenders and insurers.

Mr. Trump’s lawyers are likely to point to disclaimers in these statements that the data had not been audited or authenticated. But Ms. James’s office said that he “was personally involved in reviewing and approving the statements of financial condition before their issuance.”