By Luke Cohen
NEW YORK (Reuters) – New York State Attorney General Letitia James said on Tuesday she had found “significant evidence” of fraud by former U.S. President Donald Trump’s family business.
James’ civilian investigation into the Trump Organization, which owns real estate around the world, focuses on https://www.Reuters.com/business/ny-attorney-general-seeks-testimony-trump-his -children-legal-action-over-2022-01-19 on claims, company overstated property valuations to secure bank loans and misled US Internal Revenue Service (IRS) on value of its properties in order to minimize its tax bill.
A spokesperson for the Trump Organization said Wednesday that James’ allegations were “baseless” and misrepresented the facts.
Here are six key claims James made about the activities of the Trump Organization:
THE SIZE OF TRUMP’S APARTMENT IN MANHATTAN
James said Trump’s annual financial statements, which were prepared by the Trump Organization, had since 2012 based a $127 million valuation of an apartment Trump personally owned in Trump Tower on the claim that the he unit was 30,000 square feet (2,787 square meters). .
But the apartment was actually 10,996 square feet, a fact contained in documents Trump himself signed in 2012, according to James.
EXAGGERATING PROPERTY VALUES
Property valuations included in the financial statements have in some cases exceeded the Trump Organization’s own internal estimates, James said Tuesday.
For example, Trump’s 2011 financial statements showed that an apartment in the Trump Park Avenue building that Trump’s daughter, Ivanka Trump, was renting was worth $25 million. But Ivanka Trump had an option to buy that apartment for $8.5 million, James said.
When independent evaluators’ ratings were lower than the company’s own estimates, the Trump Organization did not disclose the findings of outside firms, James said.
For example, in 2012 the company appraised Seven Springs, a 212-acre property it bought in 1995 in New York’s Westchester County, at $291 million, it said.
But in 2016, a professional appraisal valued the property at just $56 million, James said.
The Trump Organization also exaggerated the value of the land donations it made on its properties, which allowed the company to benefit from tax breaks, which resulted in “several million dollars in benefits for Mr. Trump,” James said.
In Seven Springs, the company agreed not to develop 158 acres of the property in 2015. But about half of the lots the Trump Organization agreed not to develop under this so-called conservation easement don’t could not have been developed anyway due to local restrictions, says James.
In many cases, the factors used by the Trump Organization to assess its properties were unrealistic, James said. For example, in 2014, according to James, Trump’s $436 million valuation for a golf club in Aberdeen, Scotland assumed the right to build 2,500 luxury homes on the property, even though he had permission to build less than 1,500 vacation apartments and golf villas. .
And a $68.7 million valuation for a Westchester golf club in 2007 was based in part on the expectation that up to 67 potential new members would pay an initiation fee of $150,000 or more. But many new members paid no fees in 2011, and no members paid such fees in 2012, James said.
ANNOUNCEMENTS TO INSURANCE COMPANIES
To obtain more favorable insurance coverage, James said the Trump Organization has repeatedly told insurers that the valuations in Trump’s personal financial statements were prepared by professional appraisal companies, while in fact they had been prepared by company staff.
(Reporting by Luc Cohen in New York; Editing by Noeleen Walder and Mark Porter)