Does Trump family’s grift add up to fraud?
The Trump family has run-ins with law enforcement almost as frequently as other families go grocery shopping. Those confrontations often produce court filings loaded with salacious details about the clan’s machinations — but whether these facts add up to the crimes prosecutors are trying to prove is less clear.
On Tuesday New York Attorney General Letitia James disclosed some of the evidence her office has gathered in its fraud investigation of the Trump Organization. Among the nuggets: During a six-hour deposition with prosecutors, Eric Trump invoked his Fifth Amendment right not to incriminate himself more than 500 times. For good measure, he also invoked his rights under the First, Fourth, Sixth and 14th amendments.
Eric Trump’s knowledge of constitutional law may be a bit shaky. But he did help the former president manage the properties James is examining, and Donald Trump himself has routinely signed documents that wildly inflated (or deflated, depending on what the situation called for) property valuations. James is scrutinizing the paperwork of at least six of Trump’s holdings to see if it helped his family illegally secure bank loans or lower their tax bills. One of the properties in question is Trump’s storied triplex in Trump Tower; James says Trump signed documents saying it was 30,000 square feet and worth $327 million, when it was actually 11,000 square feet and worth $116.8 million (maybe).
The Trumps appear to have managed their accounting in the metaverse, using values from an alternate reality. When outside advisers such as Cushman & Wakefield PLC appraised Trump’s properties at what James’s office suggests were already inflated valuations, that wasn’t good enough: The Trumps pushed them to add hundreds of millions of dollars of extra value. And so on. The whole episode has a grifty air that is very on brand for the Trumps. But does it amount to fraud? To meet that bar, James will need to show that the three eldest Trump children and their father knew what they were doing was wrong — and did it anyway. That’s why the more mundane disclosures in James’s court filing could also be the more damning.
In several instances, according to the court filing, Trump himself approved documents that were used to arrange financing for his company’s holdings — documents that appear related to properties with inflated values. In one instance, Trump initialed an “OK” on an email about a refinancing that allegedly relied on an exaggerated valuation.
This helps tie Trump to the schemes James is examining, and may be a reason he has resisted sitting for a deposition. In her filing, James also notes that she believes that the Trump Organization may still be withholding documentation involving the former president. It’s also still unclear how much evidence of intent James has gathered involving Trump’s three eldest children; Ivanka and Donald Jr. are also resisting subpoenas to testify.
There are other gaps to be filled. James’s
filing makes much of the cartoonish statements of financial condition the Trumps provided to lenders and the media. But it’s unclear whether the banks actually relied on those documents when they loaned the Trumps money. When Trump unsuccessfully sued me for libel in 2006, my attorneys dug up bank documents from two of Trump’s lenders that indicated they had done their own research — and they discounted his self-proclaimed net worth of $6 billion by 83% to 88%.
Tax authorities, by contrast, usually don’t have the resources or time to do their own due diligence when assessing valuations offered by wealthy filers such as the Trumps. So the Trumps’ obligation to provide accurate records to the government is arguably greater. James still has work to do, but her court filing shows she has already done plenty. That may explain
why the Trumps continue to go to such great lengths to avoid her — and why they continue to cite James’s injudicious flaunting of her animus toward them. In his deposition, Eric Trump said he considered the investigation “a fundamental violation of my rights as a citizen.”
Nobody has a fundamental right to break the law, but that nuance seems to have been lost on the Trumps. And if the Trumps really want to fashion themselves as constitutional scholars, they should realize that there is no provision of the Constitution that protects citizens from a prosecutor with political biases. In the pursuit of justice, a prosecutor should have the freedom — and an obligation — to go wherever the facts may lead her.