Trump, 3 of his children sued for fraud

Former US president Donald Trump, three of his grown children and executives at his family business lied to banks and insurers for more than a decade about property valuations to pad his net worth by billions of dollars and to reduce their tax liability, according to a lawsuit filed Wednesday.

The 222-page civil complaint filed by Democratic New York Attorney General Letitia James alleges fraud and misrepresentations that gave false impressions to banks and insurers about how Trump's financial statements were prepared.

It seeks to recover more than $250 million in what James' office says are ill-gotten gains received through alleged deceptive practices. The lawsuit itself isn't a criminal prosecution, but James said she has referred possible violations of federal law to the Justice Department and the Internal Revenue Service.

"This investigation revealed that Donald Trump engaged in years of illegal conduct to inflate his net worth, to deceive banks and the people of the great state of New York," James said at a news conference. "Claiming you have money that you do not have does not amount to the art of the deal. It's the art of the steal."

The Art of the Deal is a 1987 book credited to Trump and a journalist that is part memoir and part business-advice.

James' lawsuit, filed in state court in New York, is the culmination of a three-year civil investigation of Trump and the Trump Organization. Trump's three eldest children, Donald Jr, Ivanka and Eric Trump, were also named as defendants, along with two longtime company executives, Allen Weisselberg and Jeffrey McConney.

James said her office filed the case — which is civil, not criminal in nature — after rejecting settlement offers made by lawyers for the defendants.

The alleged scheme was intended to burnish Trump's billionaire image and the value of his properties when doing so gave him an advantage, such as in obtaining favorable loan terms, while playing down the value of assets at other times for tax purposes, James' office said.

The suit asks the New York Supreme Court to bar Trump and his three children from serving as executives at any company in New York and to bar the Trump Organization from acquiring any commercial real estate or receiving loans from any New York-registered financial institution for five years.

The lawsuit comes just weeks after the former president refused to answer hundreds of questions under oath in a deposition with James's office.

James, who campaigned for office as a Trump critic and watchdog, is seeking re-election.

In a statement posted to his Truth Social platform, Trump called the lawsuit "another Witch Hunt by a racist attorney general" and called James, who is black, "a fraud who campaigned on a 'get Trump' platform, despite the fact that the city is one of the crime and murder disasters of the world under her watch!"

Trump lawyer Alina Habba said the lawsuit "is neither focused on the facts nor the law — rather, it is solely focused on advancing the attorney general's political agenda", accusing James of abusing her authority "by prying into transactions where absolutely no wrongdoing has taken place". He said the allegations in the lawsuit are "meritless".

On Twitter, Donald Trump Jr wrote that James was "Weaponizing her office to go after her political opponents!"

"A joke," Eric Trump posted.

James started scrutinizing Trump's business practices in March 2019 after his former personal lawyer Michael Cohen testified to Congress that Trump exaggerated on financial statements provided to Deutsche Bank when he was trying to obtain financing to buy the National Football League's Buffalo Bills.

Since then, James' office and Trump's lawyers have repeatedly sparred over the direction of the investigation and Trump's unwillingness to comply with subpoenas for his testimony and records.

In May, Trump paid $110,000 in fines after he was held in contempt of court for being slow to respond to a subpoena James' office issued seeking documents and other evidence. The contempt finding was lifted in June after Trump and his lawyers submitted paperwork showing they had made a good faith effort to find relevant documents.

Agencies contributed to this story.