New York Attorney General Letitia James has asked a court to freeze the assets of the Trump Organization, the business owned by former President Donald Trump, who faces myriad legal issues since he decisively lost the 2020 election to Democratic President Joe Biden.
James said the action is necessary to stop Donald Trump and the Trump Organization from continuing to engage in the significant fraudulent and illegal business activity outlined in the September 2022 lawsuit that is pending trial.
The former president, his three adult children and the family-owned company allegedly misled investors and tax authorities by lying about property values, inflating them to get investments and subsequently deflating them to get tax benefits.
The former president incorporated a new company called ‘Trump Organization II’ on the same day the New York Attorney General sued the original business entity for fraud and the legal action would prevent Trump from moving assets to that may be subject to forfeit if the state’s lawsuit is successful.
The attorney general’s office is seeking $250 million in financial penalties and asking the court to, among other things, permanently bar Trump and his children — Donald Trump Jr., Ivanka Trump and Eric Trump — from serving as officers or directors in any corporation registered or licensed in the state.
James’ office urged a state judge to appoint an independent party to monitor the Trump Organization’s upcoming financial submissions, suggesting the defendants cannot be trusted to honestly submit the information to its lenders as the fraud lawsuit proceeds.
Trump “falsely inflated his net worth by billions of dollars to unjustly enrich himself and to cheat the system, thereby cheating all of us,” said James.
The court is being asked to stop Trump’s ongoing fraudulent scheme and ensure funds are available to satisfy any disgorgement award, including prohibiting the company from transferring any material assets to another entity without court approval, requiring that any new financial disclosures to banks and insurers contain all supporting and relevant material, and asking for the appointment of an independent monitor to oversee compliance with these measures.
The Attorney General is also seeking the court’s permission to serve President Trump and Eric Trump electronically, as both defendants and their lawyers have refused to accept service of the complaints for almost a month.
“Our investigation uncovered the fact that Donald Trump and the Trump Organization engaged in significant fraud to inflate his personal net worth by billions of dollars to illegally enrich himself and cheat the system,” said James.
“Since we filed this sweeping lawsuit last month, Donald Trump and the Trump Organization have continued those same fraudulent practices and taken measures to evade responsibility,” said James. “Today, we are seeking an immediate stop to these actions because Mr. Trump should not get to play by different rules.”
In September 2022, James filed a lawsuit against Trump, the Trump Organization, senior management including his three children, and involved entities for engaging in years of financial fraud to obtain a host of economic benefits.
The lawsuit alleges that Trump, with the help of his children Donald Trump, Jr.; Ivanka Trump; and Eric Trump; and other senior executives at the Trump Organization; falsely inflated his net worth by billions of dollars to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company, to satisfy continuing loan covenants, to induce insurers to provide insurance coverage for higher limits and at lower premiums, and to gain tax benefits, among other things.
From 2011 to 2021, Trump and his company knowingly and intentionally created more than 200 false and misleading valuations of assets on his annual Statements of Financial Condition to defraud financial institutions.