Donald Trump inflated his net worth by as much as $2.2 billion in one year, lawyers for the New York attorney general’s office alleged as part of their civil fraud lawsuit against the former president, his adult sons and the Trump Organization.
Over a 10-year period, the attorney general’s office said that when it corrects the Trump financial statements for alleged misvaluations it “reduces Mr. Trump’s net worth by between 17-39% in each year, or between $812 million to $2.2 billion, depending on the year.” The $2.2 billion disparity came in 2014, the state said.
The new allegations were made in a partial summary judgment motion made public Wednesday by New York Attorney General Letitia James, a Democrat.
Video of Trump deposition in New York AG’s civil probe released
“Based on the undisputed evidence, no trial is required for the court to determine that defendants presented grossly and materially inflated asset values in the (statements of financial condition) and then used those SFCs repeatedly in business transactions to defraud banks and insurers,” the attorney general’s office wrote. “Notwithstanding defendants’ horde of 13 experts, at the end of the day, this is a documents case, and the documents leave no shred of doubt that Mr. Trump’s SFCs do not even remotely reflect the ‘estimated current value’ of his assets as they would trade between well-informed market participants.”
In a newly released deposition from the case, Trump testified that he had “very little, if any” involvement in putting the financial depositions together.
Trump’s lawyers responded with a court filing arguing that the case should be dismissed, asserting that the Trump Organization’s financial statements were not misleading.
The attorney general’s office said their valuation and accounting experts determined that “Mr. Trump’s net worth in any year between 2011 and 2021 would be no more than $2.6 billion, rather than the stated net worth of up to $6.1 billion, and likely considerably less if his properties were actually valued in full blown professional appraisals.”
James’ office is asking the judge to find that Trump and others made false or misleading financial statements from 2011-2021 and benefited from inflating his assets by receiving favorable loan terms and insurance rates.
The judge is not expected to rule on the motions until just before the trial.
Trump and others have denied any wrongdoing. Trump’s lawyers said in a court filing that the Trump Organization’s financial statements were not misleading and it never missed a loan payment, arguing the judge should dismiss the attorney general’s fraud lawsuit since no parties were harmed.
“The [statements of financial condition] at issue were simply not misleading. Therefore, the Defendants are entitled to summary judgment as a matter of law,” Trump’s attorneys wrote. “The undisputed record further establishes his companies timely paid hundreds of millions of dollars in interest to their lenders and never defaulted on a loan or even been late on a loan payment during the entire 15+ year time period the NYAG has sought to scrutinize in this action.”
Trump lawyers argued that there was no intent to defraud lenders or insurers and the statements contained caveats explaining that they were unaudited and departed from Generally Accepted Accounting Principles.
To buttress their argument, Trump’s lawyers point to deposition testimony from Rosemary Vrablic, the former head of private wealth management at Deutsche Bank, which has loaned the Trump Organization hundreds of millions of dollars over the years. In the deposition Vrablic testified “to the best of her knowledge” Trump didn’t submit materially misleading statements to the lender. The bank made over $75 million in interest on the loans, according to Trump’s filing. Another lender, Ladder Capital, made $40 million in interest, the filing said.
David Miller, a former executive at Erie Insurance, testified that insurer Zurich “didn’t rely on asset valuations at all,” according to the Trump filing.
Trump said the Trump Organization financial statements had a “worthless clause” in them warning lenders and others that they shouldn’t be relied on and that he had “very little, if any” involvement in putting them together, according to the newly released deposition in the civil fraud lawsuit.
Trump appeared across the table from James in April and answered questioned posed by her top attorneys for nearly seven hours. During the deposition, Trump was asked about the valuations given to his apartment at Trump Tower, Mar-a-Lago and other properties and golf courses – valuations James has alleged were fraudulently inflated to enrich the Trumps by gaining lower rates on loans and insurance.
The deposition has not been made public until now as part of legal challenges to the lawsuit, which is set to go to trial in October.
Under oath, Trump distanced himself from preparing the financial statements, saying the Trump Organization’s former chief financial officer, Allen Weisselberg, “primarily” prepared the numbers included in the financial statements, along with others working under him.
“I think he just uses good faith. I just – you know, you’d see a property and, I think, he looked at comparables perhaps. But I never went into it very much. I paid much less credence to this than you would even think,” Trump testified.
When asked about his involvement by state attorneys, Trump said he minimized his role.
“Not much. They had the numbers. I’d see it mostly after it was completed that, you know, he gave me a rundown or give me in some cases like the statement, maybe an outline in some cases,” Trump said. “Don’t forget you’re talking about a lot of different statements over a lot of different years. From – I would say from 2015 on, because I started campaigning in 2015, as you know. I would say I had very little, if any, involvement. I just didn’t have very much involvement.”
Trump put the onus on the hired accountants, who, he said, provided information they needed and were hired to make sure everything was “good.”
The $250 million lawsuit is set to go to trial in October, kicking off what will be several months of civil and criminal trials for the former president. Trump will not be required to attend the fraud trial, which could last as long as six weeks, because it is a civil case but he could testify in his defense.
The financial stakes are high for him and his family. 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 block them from engaging in any new real estate transactions for five years.
The lawsuit alleges 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 numerous golf courses.
This story has been updated with additional developments.