Trump inflated his net worth by $2.2 billion, according to N.Y. AG's new filing

Legal experts on Letitia James' claim that Trump "grossly inflated" property values to "defraud banks and insurers"

By Areeba Shah

Staff Writer

Published September 1, 2023 5:45AM (EDT)

Former U.S. President Donald Trump gives a thumbs up as he arrives at Atlanta Hartsfield-Jackson International Airport on August 24, 2023 in Atlanta, Georgia. (Joe Raedle/Getty Images)
Former U.S. President Donald Trump gives a thumbs up as he arrives at Atlanta Hartsfield-Jackson International Airport on August 24, 2023 in Atlanta, Georgia. (Joe Raedle/Getty Images)

Attorneys from the New York attorney general's office claimed that Donald Trump has routinely inflated his net worth, by between $812 million to $2.2 billion depending on the year, according to court documents filed on Wednesday.

The allegation came as part of New York Attorney General Letitia James' civil fraud lawsuit filed in September 2022 against the former president, his two children and the Trump Organization, alleging at least a decade of fraud. 

"Based on the undisputed evidence, no trial is required for the court to determine that defendants presented grossly and materially inflated asset values" in their statements of financial condition "and then used those SFCs repeatedly in business transactions to defraud banks and insurers," the filing stated.

The $250 million lawsuit filed by James accuses the Trumps and their real estate company of "grossly" inflating the values of more than a dozen assets by hundreds of millions of dollars between 2011 and 2021 and then using those fake values to defraud banks and insurers to obtain more favorable loan or insurance terms. The suit is also seeking to ban Trump, along with his adult sons Donald Jr. and Eric and the Trump Organization, from doing business in New York.

Trump's legal team, in a separate motion, has argued that the entire case be dismissed, claiming that many of its allegations are barred by the statute of limitations. Trump's lawyers have also asserted that James lacks the legal standing to bring a lawsuit because the entities that Trump allegedly defrauded have never raised complaints and have instead "profited from their business dealings" with him, according to The Associated Press.

But Temidayo Aganga-Williams, a white-collar partner at Selendy Gay Elsberg and former senior investigative counsel for the House select committee that investigated the Jan. 6, 2021, Capitol attack, told Salon that the attorney general's case is premised on New York Executive Law § 63, which gives her the power to bring an action against any person or entity that engages in "repeated fraudulent or illegal acts" or "otherwise demonstrate[s] persistent fraud or illegality in the carrying on ... or transaction of business." 

"Importantly, unlike common law fraud, the statute does not require proof of scienter [i.e., wrongful intent], reliance on the false statements or damages," Aganga-Williams said. "In other words, Trump's defense that the banks were not harmed is no defense at all."

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Trump is already facing four separate criminal indictments as he seeks a second term in the White House — two of which pertain to his efforts to overturn the 2020 election results. Some or all of his criminal trials are likely to overlap with his 2024 election campaign schedule.

The former president has denied wrongdoing in all of the cases so far. In response to the New York lawsuit, he has testified that he only had the financial statements made so he could compile a list of his different properties. 

He said he "never felt that these statements would be taken very seriously," and that some of the values listed were based on "guesstimates," according to The AP. 

In her lawsuit, James disputes the value of some of Trump's most well-known properties, including his triplex apartment at Trump Tower in Manhattan, his Mar-a-Lago resort in Palm Beach, Florida, and his golf course in Aberdeen, Scotland.

Trump has said he "never felt that these [financial] statements would be taken very seriously," and that some of the values listed for his real estate properties were based on "guesstimates."

James, in her new filing, wrote that "given the way that the worth of Trump Tower was calculated in 2018, it was overvalued by nearly $175 million. The following year, she said, the value of the building was falsely boosted by nearly $323 million," according to The New York Times

"Trump's ongoing civil trial, especially Tish James' case, may certainly take some of Trump's focus at a time when he is facing the prospect of imprisonment while also on the campaign trail," Aganga-Williams said. "The New York case only makes that harder."

During a closed-door deposition in April, Trump was subjected to hours of questioning about his real estate holdings and appeared to express exasperation that his contributions to the New York skyline were not appreciated.

"So many things I did for this city ... and now I have to come and justify myself to you," Trump said in the seven-hour testimony.

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Unlike his deposition from last year, in which Trump invoked his Fifth Amendment protection against self-incrimination more than 400 times, on this occasion he spoke at length about his financial statements. He claimed that Mar-a-Lago is worth $1.5 billion and a golf course he owns near Miami is worth $2 billion to $2.5 billion, The AP reported.

"We have properties that make money, but you can sell for many, many times because of the quality of the property, like a Turnberry in Scotland," Trump said, according to the transcript. "I could sell that. That's like selling a painting. A painting on a wall that sells for $250 million and doesn't make income. It just sits on a wall, but it sells for numbers."

Former federal prosecutor Neama Rahmani told Salon that he doesn't expect Trump to testify or even appear at his civil trial since there is no requirement that he do so.

"Testifying would be a huge risk when he is under indictment in four different jurisdictions," Rahmani continued. "This is what we saw happen in the [E. Jean] Carroll defamation case. The outcome of the civil case has no legal effect on the criminal prosecutions because the standard in a civil case is lower."

The New York civil trial is scheduled to begin in New York in October, well before any of his criminal prosecutions reach the courtroom. As Rahmani noted, Trump is unlikely to testify in court, but video recordings of Trump's depositions could be played before a jury.

By Areeba Shah

Areeba Shah is a staff writer at Salon covering news and politics. Previously, she was a research associate at Citizens for Responsibility and Ethics in Washington and a reporting fellow for the Pulitzer Center, where she covered how COVID-19 impacted migrant farmworkers in the Midwest.

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Donald Trump Fraud Lawsuit Letitia James New York Reporting Trump Business Trump Organization Wealth