PALM BEACH, Fla. – A lawsuit by New York’s attorney general claims former President Donald Trump overvalued his $75 million Mar-a-Lago estate in Palm Beach County at $739 million to lie about his net worth.
Attorney General Letitia James announced the New York state civil court’s $250 million lawsuit on Wednesday alleging a fraudulent scheme to deceive lenders, insurers, and tax authorities.
“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,” James said referring to Trump’s book published in 1987.
Trump released a statement referring to the civil case as “Another Witch Hunt” and to James, who is Black and a Democrat, as ”racist.”
Donald Jr., Ivanka, and Eric Trump, and Trump Organization executives Allen Weisselberg and Jeffrey McConney are also defendants in the lawsuit.
James accused the defendants of excluding the limitation that the Mar-a-Lago property was only to be used as a club and other factors when assessing the property from 2011 to 2021.
“All of the valuations of this property were false and misleading,” James wrote adding that in a filing to local authorities Trump had described the estate as a “white elephant” that was “impossible to sell” as a private residence and needed to be “preserved” by club members.
James alleged Trump also wanted an income tax benefit for “historic preservation” with limitations to changes without the approval of the National Trust for Historic Preservation.
James said the fraudulent valuation of the property considered it an “unrestricted residential plot of land,” added to its alleged value as a Trump-brand club, “falsified the price-per-acreage figure” and used “asking prices” instead of “actual sales.”
James alleged Trump used the false financial condition statements to obtain a Deutsche Bank’s extension of a $125 million loan or combination of loans, in connection with the purchase of Trump National Doral in Miami-Dade County.
The lawsuit accused Ivanka Trump of using this information to negotiate the loan on the Trump Organization’s property in Doral. Initially, in 2011, the bank described the Doral property as a “tough asset,” according to the lawsuit.
The loan for the Doral property closed in 2012 and it was outstanding until May when the Trump Organization refinanced it through Axis Bank, according to the lawsuit.
James said Trump also used the Doral property for the alleged “deal between affiliates” scheme to “substantially inflate” Trump Organization values to provide “false and misleading statements of financial condition.”
Related social media
“If you’re interested in selling Mar a Lago for $75mm I’m first in line 😂🤣😂”— Eric Trump (@EricTrump) September 21, 2022
Mar-A-Lago is arguably one of the most valuable properties in the United States. This assertion is absolutely asinine
This is all about politics. Weaponizing her office to go after her political opponents! https://t.co/HENkA84jjh— Donald Trump Jr. (@DonaldJTrumpJr) September 21, 2022
Read the statements
Mar-a-Lago property was valued as high as $739 million based on the false premise that it was unrestricted property and could be developed and sold for residential use, even though Mr. Trump himself signed deeds donating his residential development rights, sharply restricting changes to the property, and limiting the permissible use of the property to a social club. In reality, the club generated annual revenues of less than $25 million and should have been valued at closer to $75 million.
The Trump Organization executed a $150 million purchase and sale agreement for Trump National Doral in 2011. Mr. Trump’s statements were used to secure a $125 million loan from Deutsche Bank and were regularly submitted to the bank to fulfill the financial reporting requirements of Mr. Trump as guarantor on the loan. In multiple instances, the loan agreement required that Mr. Trump certify the truth and accuracy of his statements as a condition of the guaranty and the continuing loan covenants.