New York AG lawsuit claims former President Trump used Chicago Trump Tower in business fraud scheme
NEW YORK (CBS) -- Chicago's Trump Tower features prominently into the lawsuit against former President Donald Trump by New York Attorney General Letitia James.
The 222-page complaint issued Wednesday claims that Mr. Trump told two different stories about the value of Trump Tower in Chicago – using one story in which the building was highly valued when he was trying to secure loans against it, while using another story that claimed the tower was "worthless" for massive tax writeoffs.
James sued Mr. Trump on Wednesday for years of alleged financial fraud and inflating his net worth by billions to "enrich himself and cheat the system."
Three of Trump's adult children were also named in the civil suit, which seeks to remove the entire family from their roles in the Trump Organization. She accused them of "staggering fraud."
The lawsuit claims that since 2009, Trump International Hotel & Tower Chicago, at 401 N. Wabash Ave., has been excluded from the balance sheet for the Trump Organization – on the grounds, according to sworn testimony, that Mr. Trump did not want to put information on those statements that would conflict with what he told tax authorities was the tower's value.
An investigation revealed that the tax position Mr. Trump took was that the tower had become worthless, and therefore qualified as a substantial loss under the federal tax code.
Yet, Mr. Trump and the Trump Organization took out bank loans against the Chicago building so they could make other purchases. They closed on a $107 million loan against the building from Deutsche Bank in November 2012, the lawsuit reported.
James said the false statements were also made involving the other Trump Organization properties – including the New York Trump Tower, 40 Wall Street in New York, Mr. Trump's palatial Mar-a-Lago home in Florida, and resort and his various golf clubs, including the Trump Aberdeen in Scotland.
Mar-a-Lago generated annual revenue of $25 million and should have been valued at about $75 million. However, Mar-a-Lago was valued as high as $739 million.
CBS 2 New York Political Reporter Marica Kramer said the Trump has tried every which way to thwart James' investigation. He hasn't succeeded, and now James says that while she has brought civil charges, she is forwarding the findings of her three year probe to the Manhattan U.S. Attorney and the IRS for possible criminal prosecution.
James took particular pains to discuss how he allegedly inflated the value of his triplex in the best-known Trump Tower on Fifth Avenue in Midtown Manhattan.
"Mr. Trump represented the apartment spanned more than 30,000 square feet, which was the basis for evaluating the apartment. In reality, the apartment has an area of less than 11,000 square feet," she said.
James said the alleged financial hijinks allowed Trump to value the apartment in 2015 at $327 million.
"To this date, no apartment in New York City has ever sold for close to that amount. Tripling the size of the apartment valuation was intentional and deliberate fraud," James said.
Several times during her news conference Wednesday, James pointed out that Mr. Trump repeatedly took the Fifth when he was questioned under oath about his business dealings.
"White collar financial crime is not victimless crime. When the well-connected break the law, taking more money than they are entitled to, it reduces resources to working people, to regular people, to small businesses and all taxpayers," James said. "Everyday people cannot lie to a bank about how much money they have in order to get a favorable loan to buy a home or to send their kid to college, and if they did, the government would throw the book at them."
James wants the Trumps barred from serving as officers of any New York state corporation, and the appointment of a special master to run the Trump Organization. She wants at least $250 million in restitution.
In a statement on Truth Social, Trump responded, calling it "another witch hunt by a racist attorney general, Letitia James."