The final curtain? New York state investigation could bring the Trumps down

Penalties being sought in the civil fraud suit brought last week by the New York state attorney general’s office against Donald Trump and three of his adult children could result in the end of the Trump Organization, his real estate empire, in its current form.

The former US president, as well as Donald Trump Jr, Ivanka Trump and Eric Trump, were named as defendants in a sprawling 214page complaint filed by New York attorney general Letitia James for allegedly falsely inflating his net worth by billions to enrich himself and secure favourable loans.

The restrictions being sought by James include permanent bans on Trump and his three children from serving as executives in any company in New York, a move that would tear the Trump Organization away from his personal control.

The other penalties would prevent Trump from attempting to circumvent that principal restriction to establish his business under a different guise: James is also seeking to bar Trump from acquiring commercial real estate and applying for loans in New York for five years.

Trump could also lose two loyal executives – Trump Organization’s chief financial officer, Allen Weisselberg, and its controller, Jeffrey McConney – with James asking the New York state supreme court to bar them from serving in top business roles in New York.

James confirmed that her office had made a criminal referral to justice department prosecutors with the southern district of New York and the Internal Revenue Service to investigate what she believed to be violations of federal statutes – marking additional, unforeseen legal peril for the former president and his three adult children.

The former president and his attorneys castigated James’s investigation as a politically motivated witch-hunt.

In the complaint, James outlined an extensive record of alleged wrongdoing, such as inflating the value of 23 Trump-owned properties, including his Mar-a-Lago resort, Trump Tower in New York and what was previously the Trump International Hotel in DC.

Among more than 200 examples of false or misleading valuations knowingly used on financial statements detailed in the suit, the state alleged the former president falsely inflated the square footage of his triplex apartment in Trump Tower from 10,996 to just under 30,000, which allowed him to claim it was worth $327m. But, James said, “that price was absurd given the fact that at that point, only one apartment in New York City had ever sold for even $100m … In the 30-year-old Trump Tower, the record sale at that time was a mere $16.5m.”

The suit also alleged that Trump’s Mar-a-Lago resort was valued at $739m on the false premise that it was unrestricted property that could be developed for residential use, even though Trump had himself signed deeds donating those rights, meaning it should have been valued closer to $75m.