New York attorney general Letitia James sued Donald Trump, along with family members and employees, on Sept. 21, alleging “numerous acts of fraud and misrepresentation” in the Trump Organization’s annual financial statements from 2011 to 2021.

PEOPLE OF THE STATE OF NEW
YORK, by LETITIA JAMES,
Attorney General of the State of New York,
Plaintiff,
-against-
DONALD J. TRUMP, DONALD TRUMP,
JR., ERIC TRUMP, IVANKA TRUMP,
ALLEN WEISSELBERG, JEFFREY
MCCONNEY, THE DONALD J. TRUMP
REVOCABLE TRUST, THE TRUMP
ORGANIZATION, INC., TRUMP
ORGANIZATION LLC, DJT HOLDINGS
LLC, DJT HOLDINGS MANAGING
MEMBER, TRUMP ENDEAVOR 12 LLC,
401 NORTH WABASH VENTURE LLC,
TRUMP OLD POST OFFICE LLC, 40
WALL STREET LLC, and SEVEN
SPRINGS LLC

Following a comprehensive three-year investigation by the Office of the Attorney General (“OAG”), involving interviews with more than 65 witnesses and review of millions of pages of documents produced by Defendants and others, OAG has determined that Defendants
Donald J. Trump (“Mr. Trump”), Trump Organization LLC and the Trump Organization, Inc. (collectively with the other named entities, the “Trump Organization”), Allen Weisselberg, and the other individuals and entities affiliated with Mr. Trump and his companies named as
Defendants, engaged in numerous acts of fraud and misrepresentation in the preparation of Mr. Trump’s annual statements of financial condition (“Statements of Financial Condition” or “Statements”) covering at least the years 2011 through 2021.

These acts of fraud and misrepresentation were similar in nature, were committed by upper management at the Trump Organization as part of a common endeavor for each annual Statement, and were approved at the highest levels of the Trump Organization—including by Mr. Trump himself. Indeed, Mr. Trump made known through Mr. Weisselberg that he wanted
his net worth on the Statements to increase—a desire Mr. Weisselberg and others carried out year after year in their fraudulent preparation of the Statements.

These acts of fraud and misrepresentation grossly inflated Mr. Trump’s personal
net worth as reported in the Statements by billions of dollars and conveyed false and misleading
impressions to financial counter-parties about how the Statements were prepared. Mr. Trump and
the Trump Organization used these false and misleading Statements repeatedly and persistently
to induce banks to lend money to the Trump Organization on more favorable terms than would 2
otherwise have been available to the company, to satisfy continuing loan covenants, and to
induce insurers to provide insurance coverage for higher limits and at lower premiums.

All of this conduct was in violation of New York Executive Law § 63(12)’s
prohibition of persistent and repeated business fraud, which embraces any conduct that “has the
capacity or tendency to deceive, or creates an atmosphere conductive to fraud.” People v.
Northern Leasing Systems, Inc., 193 A.D.3d 67, 75 (1st Dep’t 2021).

These misrepresentations also violated a host of state criminal laws, constituting
repeated and persistent illegality in violation of Executive Law § 63(12). Among other laws,
Defendants repeatedly and persistently violated the following: New York Penal Law § 175.10
(Falsifying Business Records); Penal Law § 175.45 (Issuing a False Financial Statement); and
Penal Law § 176.05 (Insurance Fraud).1

Each Statement from 2011 to 2021 provides Mr. Trump’s personal net worth as of
June 30 of the year it covers, was compiled by Trump Organization executives, and was issued
as a compilation report by Mr. Trump’s accounting firm. Each Statement provides on its face
that its preparation was the responsibility of Mr. Trump, or starting in 2016, the trustees of his
revocable trust, Donald Trump, Jr. and Allen Weisselberg. Each Statement was personally 3
certified as accurate by Mr. Trump, by one of his trustees, or in 2021 by Eric Trump, when
submitting the Statement to financial institutions with the purpose and intent that the information
contained in the Statement would be relied upon by those institutions..

Each year from 2011 to 2016, Mr. Trump and Mr. Weisselberg would meet to
review and approve the final Statement. When asked questions about those meetings under oath,
both men invoked their Fifth Amendment privilege against self-incrimination and refused to
answer. When asked under oath if he continued to review and approve the Statements after
becoming President of the United States in 2017, Mr. Trump invoked his Fifth Amendment
privilege and refused to answer.

As further evidence of their scheme to inflate the value of Mr. Trump’s assets
when beneficial to his financial interests, Mr. Trump and the Trump Organization procured
inflated appraisals through fraud and misrepresentations in 2014 and 2015 for the purpose of
granting conservation easements over two of Mr. Trump’s properties. Through these
conservation easements, Mr. Trump and the Trump Organization agreed to forgo their purported
rights to develop areas of the two properties that are the subjects of the easements, which enabled
them to treat as a charitable donation the difference in the value of each property with and
without the relinquished development rights as determined in the appraisals. In the same way
that Mr. Trump and the Trump Organization inflated the valuations of Mr. Trump’s assets for the
Statements, they manipulated the appraisals to inflate the value of the donated development
rights with respect to both conservation easements. A. The Fraudulent Statements of Financial Condition. Each Statement of Financial Condition lists Mr. Trump’s assets and liabilities, and then presents his “net worth” as the difference between the two. On the asset side, each Statement includes five basic categories: (i) “cash and cash equivalents;” (ii) monies held in “escrow” and “reserve deposits;” (iii) interests in “partnerships and joint ventures;” (iv) real estate licensing fees; and (v) by far the largest category – real estate holdings. On the liability side, each Statement lists “accounts payable and accrued expenses,” loans on “real and operating
properties,” and other mortgages and loans.

Mr. Trump’s Statements of Financial Condition for the period 2011 through 2021
were fraudulent and misleading in both their composition and presentation. The number of
grossly inflated asset values is staggering, affecting most if not all of the real estate holdings in
any given year. All told, Mr. Trump, the Trump Organization, and the other Defendants, as part
of a repeated pattern and common scheme, derived more than 200 false and misleading
valuations of assets included in the 11 Statements covering 2011 through 2021.

Nearly every one of the Statements represented that the values were prepared by
Mr. Trump and others at the Trump Organization in “evaluation[s]” done with “outside
professionals,” but that was false and misleading; no outside professionals were retained to
prepare any of the asset valuations presented in the Statements. To the extent Mr. Trump and the
Trump Organization received any advice from outside professionals that had any bearing on how
to approach valuing the assets, they routinely ignored or contradicted such advice. For example,
they received a series of bank-ordered appraisals for the commercial property at 40 Wall Street
that calculated a value for the property at $200 million as of August 1, 2010 and $220 million as
of November 1, 2012. Yet in the 2011 Statement, they listed 40 Wall Street with a value $524
million and increased the valuation to $527 million in the 2012 Statement, and to $530 million in
2013—more than twice the value calculated by the “professionals.” Even more egregiously the
valuation of more than $500 million was attributed to information obtained from the same professional appraiser who prepared both valuations putting the building’s value at or just over
$200 million.

The inflated asset valuations in the Statements cannot be brushed aside or excused
as merely the result of exaggeration or good faith estimation about which reasonable real estate
professionals may differ. Rather, they are the result of the Defendants utilizing objectively false
assumptions and blatantly improper methodologies with the intent and purpose of falsely and
fraudulently inflating Mr. Trump’s net worth to obtain beneficial financial terms from lenders
and insurers.

Nor can the false and fraudulent asset values in the Statements be defended based
on boilerplate disclaimers in the accountant’s compilation report accompanying each Statement.
While the accountants gave notice in the reports that they did not audit or review the Statements
to verify the accuracy or completeness of the information provided by Mr. Trump or the Trump
Organization, they confirmed that their clients were responsible for preparing the Statements in
accordance with generally accepted accounting principles in the United States (“GAAP”). The
disclaimers may relieve the accountants of certain obligations that would otherwise adhere to
their work on a more rigorous audit engagement, but they do not give license to Mr. Trump or
the Trump Organization to submit to their accountants fraudulent and misleading asset valuations
for inclusion in the Statements.

Moreover, Mr. Trump and the Trump Organization have no excuse for issuing
Statements of Financial Condition that repeatedly violated GAAP rules in multiple ways despite
expressly representing in the Statements that they were prepared in accordance with GAAP.
Among the many GAAP rules they violated are: (i) including as “cash” funds that Mr. Trump
could not immediately liquidate because they did not belong to him and may never be distributed

to him; (ii) failing to determine the present value of projected future income when including the
income as part of an asset valuation; (iii) failing to disclose a substantial change in methodology
from the prior year’s statement for how an asset value was derived; (iv) failing to value the
entirety of Mr. Trump’s interest in a partnership, including all limitations and restrictions on his
interest; and (v) including intangibles such as internally-generated brand premiums when
calculating an asset’s value.