Donald Trump inflated his net worth by $2.2 billion in a year, prosecutors from the New York attorney general’s office allege as part of a civil fraud lawsuit against the former president, his teenage sons and the Trump Organization.
Over a 10-year period, when the attorney general’s office corrected Trump’s financial statements for misstatements, it “reduced Mr. Trump’s net worth by 17-39% each year, or $812 million to $2.2 billion per year.” A $2.2 billion shortfall came in 2014, the government said.
The new allegations were made in a partial summary judgment motion made public Wednesday by New York Attorney General Letitia James, a Democrat.
A video of Trump’s response to the New York AG’s civil investigation was released
“Based on circumstantial evidence, the court needed no trial to determine that the defendants (financial statements) presented grossly and materially inflated asset values and repeatedly used those SFCs in business transactions to defraud banks and insurers,” the attorney general’s office wrote. “Although the defendants’ panel consists of 13 experts, at the end of the day, this is a documentary case, and there is no doubt that Mr. Trump’s SFCs do not even remotely reflect the ‘estimated present value’ of his assets. They will trade among well-known market participants.
In a newly released deposition from the case, Trump testified that he had “very little” involvement in putting the financial deposits together.
Trump’s lawyers filed a court filing to dismiss the lawsuit, saying the Trump Organization’s financial statements were not misleading.
The Attorney General’s Office stated that their valuation and accounting experts said “Mr. Trump’s net worth in any year between 2011 and 2021 will not exceed $2.6 billion, instead of a net worth of up to $6.1 billion, and his assets would be significantly lower if they were actually valued at a purely professional valuation.”
James’ office is asking the judge that Trump and others made false or misleading financial statements from 2011-2021 and benefited by inflating his assets by getting favorable loan terms and insurance rates.
The judge is not expected to rule on the motions until shortly before the trial.
Trump and others have denied any wrongdoing. Trump’s lawyers argued in court filings that the Trump Organization’s financial statements were not misleading and that it did not default on loans, arguing that the judge should dismiss the attorney general’s fraud case because no party was harmed.
“The [statements of financial condition] Not simply misled on the issue. Therefore, defendants are entitled to summary judgment as a matter of law,” Trump’s lawyers wrote. “His impeccable record, where his companies paid hundreds of millions of dollars on time to their creditors and never defaulted or defaulted on their debts, the NYAG has been trying to investigate for 15+ years. Action.”
Trump lawyers argued there was no intent to defraud lenders or insurers and included caveats explaining the statements were unaudited and deviated from generally accepted accounting principles.
To bolster their case, Trump’s lawyers point to deposition testimony from Rosemary Vrablic, the former head of private wealth management at Deutsche Bank, who lent hundreds of millions of dollars to the Trump Organization over the years. Vrablic testified in the deposition that “to the best of his knowledge” Trump did not submit materially false statements to the lender. According to Trump’s filing, the bank earned $75 million in interest on the loans. Another lender, Ladder Capital, earned $40 million in interest, the filing said.
David Miller, a former executive at Erie Insurance, testified that insurance company Zurich “didn’t rely on the property valuation,” according to Trump’s filing.
Trump said the organization’s financial statements contained a “useless clause” warning creditors and others not to rely on them, and that he had “very little” involvement in putting them together, according to the newly released deposition. In a civil fraud case.
Trump appeared across the table from James in April and answered questions from his top lawyers for nearly seven hours. During the deposition, Trump was asked about appraisals given to Trump Tower, Mar-a-Lago and other properties and his apartment on golf courses.
The deposition has not yet been made public as part of legal challenges to the case, which is set to go to trial in October.
Under oath, Trump recused himself from preparing the financial statements, saying former Trump Organization chief financial officer Alan Weiselberg “primarily” prepared the numbers included in the financial statements, along with others working under him.
“I think he’s exercising good faith. I’m just — you know, you’ll look at a property, I think he’s probably looked at comparables. But I’ve never gone too far into it. I’ve put a lot less faith into it than you might think,” Trump testified.
When asked about his involvement by prosecutors, Trump said he downplayed his role.
“Not much. They had the numbers. I’ll look at it mostly after it’s done, and he’s given me a rundown or in some cases like a report, maybe an outline in some cases,” Trump said. “Don’t forget that you have been talking about many different statements over the years. Since – I say since 2015 because I started campaigning in 2015, you know. I would say I have very little involvement. I’m not too involved.”
Trump put the onus on the hired accountants, who provided the information they needed and were hired to make sure everything was “good.”
The $250 million case is set to go to trial in October, with months of civil and criminal trials against the former president. Trump is not required to attend the fraud trial, which could last up to six weeks, because it is a civil case, but he can testify in his defense.
He and his family have a lot of financial stakes. James is seeking $250 million and to permanently bar Trump and his sons from serving as an officer or director of any business registered in New York State and for five years from engaging in new real estate transactions.
The lawsuit alleges that Trump, his adult sons and the Trump Organization enriched themselves by inflating the value of numerous properties, including Trump’s triplex apartment at Trump Tower, Mar-a-Lago and several golf courses.
This story has been updated with additional updates.