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New York state sued former President Trump, his three eldest children and his company alleging business fraud. The civil lawsuit claims they inflated Trump’s net worth by billions of dollars by exaggerating the value of his key real estate properties. New York Attorney General Letitia James announced the lawsuit in Manhattan. John Yang reports on the latest development in Trump’s legal battles.
Judy Woodruff:
As we reported, the attorney general of New York is suing former President Donald Trump and his private company for financial fraud.
Our John Yang has more on the latest development in Mr. Trump’s legal battles.
John Yang:
Judy, New York Attorney General Letitia James’ civil suit alleges that the former president and executives of the Trump Organization, including his three oldest children, lied to bankers and insurers for years by inflating the value of their real estate holdings, in violation of New York state law.
James can’t bring criminal charges in this case, but suggests that federal laws may have been broken as well. She’s referred the case to the U.S. attorney’s office in Manhattan and to the IRS.
We look at two aspects of this with Andrea Bernstein, who covers the former president’s legal issues for NPR, and Jessica Roth, a former federal prosecutor, now a professor at the Cardozo School of Law.
Thanks to you both for joining us.
Andrea, let me begin with you.
You have watched these investigations of the former president closely for a while now. To you, what is the significance of what happened today?
Andrea Bernstein, NPR Contributor:
Well, I think what was really striking was to hear today the New York attorney general say aloud that this had been a pattern and practice of the Trump Organization for, as she put it in her complaint, at least a decade.
That is, take Trump’s apartment in Trump Tower. According to the complaint, the apartment was valued for an apartment three times its size, a $200 million difference, making it valued at the time for — as the most expensive apartment in New York City.
So, according to the attorney general, what the president did is then take this to bankers and say, I have all this money, and get more favorable rates.
Well, this happened, according to the complaint, over 200 times. It was central to Trump’s business model. It was a pattern of fraud that went on and on and on.
John Yang:
Jessica Roth, there is a referral to the U.S. attorney’s office in — for the Southern District of New York. You worked in that office.
What typically happens when a referral comes over like this?
Jessica Roth, Yeshiva University Cardozo School of Law: Well, the U.S. attorney’s office will make an independent assessment of the evidence.
It would also conduct its own investigation, and would make a determination about whether there is enough evidence to proceed with criminal charges. The burden of proof in a criminal case is considerably higher than the burden in a civil case. The burden in the criminal case is proof beyond a reasonable doubt.
And so, even if all the allegations in this complaint are accepted as true, the U.S. attorney would have to be satisfied that he’d be able to persuade a jury unanimously beyond a reasonable doubt of criminal intent by each of the individuals alleged here, not just the corporation.
John Yang:
Andrea Bernstein, we have said that the Trump reaction to this has been — is that this is a political witch-hunt.
The former president did respond on the TRUTH Social media — social media site in a political way. He said: “Attorney General Letitia ‘peekaboo’ James, a total crime fighting disaster in New York, is spending all of her time fighting for very powerful and well-represented banks and insurance companies, who were fully paid, made a lot of money and never had a complaint about me, instead of fighting murder and violent crime, which is killing New York state.”
Now, the attorney general has emerged as sort of the — one of the leading antagonists of the former president. She’s a Democrat. She was talking about running for governor for a while. What role does politics or is politics playing in all of this, in your view?
Andrea Bernstein:
Well, according to the judge in this investigation, it doesn’t matter. This has been a running argument that’s been going on since January in New York state Supreme Court, whether the attorney general was entitled to get information from the former president and his company, or whether she is just trying to get it to embarrass the former president and his company.
And what the judge in the case has ruled is, it doesn’t matter that the New York attorney general is a Democrat. It doesn’t matter that she talked when she was running for office about investigating Trump. What matters are the facts and the law. And this case has already survived several hurdles.
And, in New York, and in a civil case like this, the case is already quite advanced. The attorney general has gotten a lot of information, millions of pages of documents, she said. She, of course, we all remember, interviewed the former president. He took the Fifth Amendment 500 times. She talked about that in her press conference today.
So the case is far along. And the evidence is out there. And a judge has said, politics doesn’t matter. It’s going to be tested in the courts.
John Yang:
And, Andrea, real estate valuations are often subjective. So, how is — what’s being alleged in this civil suit, how out of the ordinary is this for real estate?
Andrea Bernstein:
Right.
So I have covered Trump’s business for a long, long time. And I have covered real estate in New York for a long time. And, certainly, there is a lot of sort of puffery about what the value of a property may be. But what the attorney general was saying is, this was so far out of bounds, hundreds of millions of dollars in individual cases, adding up to more than a billion dollars, that there were actual victims, the taxpayers of New York, who didn’t get the taxes they were entitled to, banks, insurance companies.
And that, she says, is something that, if you are an average person, you lie in a bank application, you could be liable for that. She’s saying it doesn’t matter if you’re the former president. You should be too.
John Yang:
Jessica Roth, Andrea talks about the puffery in real estate.
When you talked to us earlier, you talked about these allegations and claims being objectively verifiable. And you talked about the importance of that. Explain what you meant by that.
Jessica Roth:
Yes.
Because I think that the attorney general anticipated that the defense here was likely to be that these are the kinds of practices that are routinely engaged in, in the real estate industry, I think she was wise to make her allegations as concrete as possible and grounded in representations that were made that could be shown to be objectively false, so, for example, the square footage that Andrea talked about, for example, of the former president’s apartment, that was grossly inflated in some of the statements.
So, that’s an objective fact. What’s the square footage of the apartment? So things like that, or whether or not statements were prepared with the input of outside professionals, that can be verified whether, in fact, outside professionals gave their sanction to the statements.
And according to the allegations in the complaint, some of those outside professionals were interviewed by the attorney general, and they did not provide input of the kind that’s described in the statements or sanction them in any way. So, that’s what I mean, that it’s smart, as a litigation strategy, to stick to facts that can be verified and proven to be false.
John Yang:
And, Jessica Roth, based on the allegations in this suit, what potential federal charges do you see possible here?
Jessica Roth:
Well, they include the charges that are actually mentioned in a footnote in this complaint, including wire fraud and bank fraud.
So those would involve frauds committed upon financial institutions, banks, and use of the wires in furtherance of any other kind of fraud. It could — it includes the bank fraud. It can include insurance fraud. And so anytime interstate wires are used to further a scheme to defraud, that can count as wire fraud under the federal statutes.
So that’s what the U.S. attorney is going to be looking at, in addition to the evidence. What are the federal statutes that may have been violated here?
John Yang:
Former federal prosecutor Jessica Roth, now at Cardozo Law School, and Andrea Bernstein of NPR, thank you very much.
Andrea Bernstein:
Thank you.
Jessica Roth:
Thank you.
John Yang is a correspondent for the PBS NewsHour. He covered the first year of the Trump administration and is currently reporting on major national issues from Washington, DC, and across the country.
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