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Heather Vogell

Heather Vogell

Sep 22, 2022
16 tweets

I wrote back in 2019 about how the figures Trump used to seek big loans for some buildings didn’t always match the numbers given to local property tax officials. Now @NY AG James has filed suit over financial discrepancies on Trump’s books. Here’s what stands out to me:

Some background: The new lawsuit against former Pres. Donald Trump, his biz and 3 of his kids accuses them of wildly overstating the value of his real estate. The scheme “grossly inflated” Trump’s personal net worth, it said – to the tune of billions $$. Among its claims:
The suit said Trump’s “statements of financial condition,” used to secure loans, contained figures based on literally hundreds of lies. It said 11 of the annual statements over a decade’s time contained more than 200 false and misleading asset valuations…
Trump Org and Trump’s lawyer said James’ claims and 3-year inquiry were politically motivated. A statement emailed by a Trump Org rep said no bank involved was harmed – saying, “they profited handsomely” – and that all the loans in question are either current or paid off.
Alina Habba, Trump’s attorney, said: “It is abundantly clear that the Attorney General’s Office has exceeded its statutory authority by prying into transactions where absolutely no wrongdoing has taken place.” A lawyer for Trump’s kids did not immediately respond.
James’ lawsuit focuses on info Trump and his biz gave lenders and insurance companies. We compared tax and loan filings in our 2019 story, which included the financial district skyscraper, 40 Wall St.…
At 40 Wall St. in 2011, “grossly inflated” numbers pushed the building’s value from $200M in a lender appraisal north of $520M on Trump Org statements, the suit says. The “value” skyrocketed further after that. Trump's lease of the building secured a $160M loan.
Earlier, James revealed one bank was suspicious and did not want to renew his loan. It was his biggest single debt in 2015 - when he launched his campaign for president. So Trump Org then turned to the lender that employed the Trump Org CFO’s son.…
A call to that lender was not immediately returned. The CFO’s son has previously declined to comment.
James’ suit said Trump Org pressured appraisers to use false and misleading information to pump up 40 Wall’s worth. The 2015 appraisal used inflated market rents and understated expenses to reach a value high enough to support favorable loan terms, it said.
But Trump Org wasn’t done. In the statements of financial condition, the biz inflated the building’s value even further – to $735.4 million, the claim said.
We also documented how two accounts of the same 2010 profits at Trump Tower – in old and new loan-related filings – were 21% off. The new, higher numbers helped Trump Org borrow $73 million more.…
At the time, Trump Org’s chief legal officer said: “Not only were the numbers provided to the [loan] servicer accurate, but Trump Tower is considered one of the most underleveraged commercial buildings around.”
But James’ suit said: “The Trump Organization’s conduct in valuing Trump Tower in these [statements] involved a series of coordinated actions designed to artificially push the value higher, rather than reach a reasonable value for the property based on market information.”
James’ claim seeks wide-ranging civil penalties that would cripple the Trumps’ ability to do business in New York State. It seeks to ban the Trumps from running a biz in NY for good and bar Trump and Trump Org from buying commercial property there for 5 years…
…It would also make Trump pay an estimated $250 million. And James is making a criminal referral to federal prosecutors.
Heather Vogell
@ProPublica reporter investigating rental housing. Fmr Trump, Inc. contrib. Tips: DM for Signal/WhatsApp/Telegram/Viber
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