New York Attorney General Letitia James' court filings show road map for probe into Donald Trump's business – The Washington Post

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More than two years after she began investigating the business practices of Donald Trump, New York Attorney General Letitia James (D) submitted a 157-page filing Tuesday detailing much of the evidence her investigators have gathered so far on Trump and his adult children.
James’s civil investigation, which is separate from a criminal probe James is running in tandem with new Manhattan District Attorney Alvin Bragg (D), focuses on Trump’s use of “statements of financial condition” — unaudited estimates of his own wealth — in seeking bank loans and insurance policies.
Trump’s attorneys and his company say James is pursuing Trump for political reasons, arguing that she is unfit to conduct an inquiry because of her previous statements about how Trump was an “illegitimate” president.
Taken as a whole, the Tuesday filing offers the clearest picture yet of the evidence investigators have against Trump and his three eldest children and suggests how they might proceed. A civil case is likely to be filed by James in the upcoming months, while a criminal case on valuation practices remains less certain, although it has not been ruled out, according to a person familiar with the matter who spoke on the condition of anonymity because of the sensitivity of the matter.
Here are the biggest takeaways from the evidence James disclosed:
1. Trump’s tax returns might not have the smoking gun his critics hoped for.
Consider how long the nation has been fighting over Trump’s tax returns. Nearly since he rode down the escalator in Trump Tower almost seven years ago on his path to the White House, his tax returns have been the focus of intense speculation — and later became the subject of a landmark Supreme Court case. An unfathomable number of news stories and television segments covered why Trump decided to become the first modern president to withhold his tax returns and what he might be hiding.
James and her team have now had access to Trump’s “personal federal income tax returns for a series of years,” as she noted Tuesday. But her new court filing rarely mentions the returns. They are mostly used to confirm that he received tax breaks for easements on properties such as his Seven Springs mansion in Westchester County, N.Y.
There certainly remain questions about whether Trump fraudulently avoided paying his taxes, as well as whether he deserved a $72.9 million refund he received from the IRS. It’s possible the contents of Trump’s tax records weigh more heavily on other aspects of James’s investigation that have not been made public, but Tuesday’s filing suggests his returns might play a relatively small role in the case compared with what many critics imagined.
2. The central evidence and allegations against Trump haven’t changed.
The fact that Trump handed out “statements of financial condition” containing unaudited assertions about his properties isn’t new. Journalist Timothy O’Brien referred to them in his 2005 book. Michael Cohen told Congress in early 2019 that Trump had submitted one of the statements to Deutsche Bank in a failed attempt to buy the Buffalo Bills. The Post then chronicled a litany of mischaracterizations in five of his statements. And last October, Democrats on the House Oversight Committee produced additional copies as they investigated the lease for Trump’s D.C. hotel.
James has a more complete set of the statements, ranging from 2004 to 2020. But her basic assertions about them — that they contain misrepresentations that allegedly benefited Trump financially — mirror those that others have been making for years. She does so in more detail, and with much more at stake, but she is largely relying on evidence that has been available for the public to see for years.
In the filing Tuesday, James detailed sometimes brazen manipulation of property values. Trump pegged the value of his triplex apartment at the top of Trump Tower at more than $300 million, using documents that estimated its size to be 30,000 square feet, the court filing said. That’s nearly three times the size of the space in actuality: 11,000 square feet.
In other instances, assets were reported as liquid cash when really they were tied up in partnership deals and could not be accessed easily. Cash assets that Trump didn’t actually control were about a third of the total cash reported in the financial statements in several years that James’s team examined.
Repeatedly, golf resort properties were allegedly inflated in value by tens of millions of dollars based on homes that had not yet been built — and in some cases were unlikely to ever be constructed.
James on Tuesday also took aim at Trump’s three adult children who worked for him, Donald Trump Jr., Ivanka Trump and Eric Trump. In the filing — which was part of a bid to force the former president and two of his children to sit for depositions — she appeared to focus in particular on Ivanka, alleging that she and her father passed inaccurate information to the federal government to land the company’s lease for its D.C. hotel. Democrats on the House Oversight Committee have aired similar claims.
Eric Trump, who took on more responsibility in the family business when his father took office, was allegedly involved in discussions that led to drastic changes in asset values reported to outside parties. Donald Trump Jr. “personally certified on an annual basis the truth and accuracy” of his father’s financial condition statements for several years, according to James.
3. Trump isn’t in the clear.
James’s investigation may echo well-known allegations, but it has gone significantly further in determining how Trump and his company allegedly used financial condition statements to his benefit — potentially wronging banks, insurers or taxpayers in the process.
For the first time, James spelled out how routinely Trump distributed the statements and how others relied on them to make decisions with millions of dollars at stake.
For instance, a loan officer at an unnamed financial institution testified to James that if the inaccuracies on the statements were known, the officer “would not have brought the deal to his financial institution’s commercial lending committee.” James found that Deutsche Bank considered the statements in providing him more than $300 million in loans. Insurer Zurich North America is said to have underwritten bonds for the Trump Organization using the statements.
James also alleged that people working on behalf of Trump may have known they were running afoul of tax rules. In messages obtained by investigators, one of Trump’s tax attorneys warned in writing that getting a tax break for a driving range parcel on his Los Angeles course was “tantamount to the US taxpayers paying Donald Trump to keep his driving range and use it for exactly what he is already using it for …”
“Bottom line — the more publicity this gets, the more we invite scrutiny,” the attorney wrote.
Most alarming for Trump supporters might be the responses of Eric Trump, who runs Trump’s business now, and Trump’s longtime chief financial officer, Allen Weisselberg, who has pleaded not guilty to tax fraud charges in a separate case. Both sat for testimony and invoked the Fifth Amendment right against self-incrimination more than 500 times.
4. James is casting a wide net
James and her office have cast a wide net for people with information about Trump and his properties.
On top of the reams of information she and the district attorney’s office received from Trump’s banks and insurers, the attorney general secured testimony from “approximately a dozen current and former Trump Organization employees.” Outside appraisers, brokers, lawyers, engineers and golf experts, some of them named, some not, provided additional testimony, in which they attempted to recall details from the past 15 years of Trump’s career.
Because Trump rarely uses email, James’s office has been seeking his paperwork, no matter how small, to connect him to the case. In the filing, her office points to a Trump attorney’s testimony that the former president “used Post-it Notes to communicate with employees” but says that 18 months after being subpoenaed, the company “still had not searched for those documents.”
The case now involves legal discovery by Post-it Note, with a former president’s future at stake.
5. Who are the victims?
Two of the most successful legal efforts against Trump in the past had something in common: easily relatable victims.
One was the Trump University case, in which Trump’s online program allegedly defrauded students looking to get a foothold in real estate. The other was Trump Foundation, which was found to be a vehicle for Trump to enrich himself rather than help charities.
Both entities shut down after legal actions brought by New York, with Trump also paying $25 million to settle suits brought by Trump University students.
The nature of James’s current case may not lend itself so easily to victims as relatable as charities or students. Deutsche Bank? Insurance companies? Taxpayers? James’s investigators will need to explain further both in court and in public who was allegedly harmed in this case.
Josh Dawsey contributed to this report.
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