Trumps could face $250m penalty and ban from doing business in New York in fraud suit

Punishments could cripple Trump business empire

Donald Trump and his family business are in serious legal and financial jeopardy, after New York attorney general Letitia James filed a $250m civil lawsuit on Wednesday accusing the Trump Organization of serially lying about the value of its assets to lenders and insurers to obtain financial benefits.

Speaking from her office in New York City on 21 September, Ms James said the twice-impeached ex-president “cheated all of us” by inflating his net worth “to unjustly enrich himself and to cheat the system”.

The suit, the result of an investigation that began in 2018, accuses the former president, his three eldest children, and the Trump Organization of breaking state laws and suggests that the conduct uncovered also goes against federal statues.

If Ms James is successful, the suit could kneecap the Trump business empire in New York and beyond.

The lawsuit seeks to recover $250m in lost state revenue and penalties.

The attorney general is also seeking to appoint an independent monitor to oversee the Trump Organization’s finances, and wants to oust the Trumps from their positions in the organization.

But the suit goes even further than that. The attorney general is asking that Mr Trump as well as his children Donald Trump Jr, Ivanka Trump, and Eric Trump, be barred from serving as officers or directors in a New York company, effectively running them out of the state.

The suit also requests that the Trump Organization be prevented from buying any New York real estate for the next five years, even if it uses legal manoeuvring to reconstitute itself as a new entity.

Perhaps the deepest punishments could come from referrals.

Ms James, who doesn’t have the authority to bring a criminal case against the Trumps, has referred her findings to the Internal Revenue Service, the US Attorney’s Office for the Southern District of New York, and state prosecutors.

The US Attorney’s Office said in a statement on Monday it was aware of the referral and wouldn’t comment further.

Manhattan district attorney Alvin Bragg, meanwhile, whose office would bring state charges against Mr Trump under the referral, told the New York Times, “Our criminal investigation concerning former President Donald J. Trump, the Trump Organization, and its leadership is active and ongoing.”

In a statement, the Trump Organization said the New York AG’s lawsuit was politically motivated and an “an abhorrent abuse of power, waste of valuable resources and tens of millions of taxpayer dollars.”

Mr Trump’s lawyer, Alina Habba, told the Times the claims in the suit are “meritless.”