New York state Attorney General Letitia James this week laid out what she described as "significant evidence" of fraudulent activity by former President Donald Trump and his company — but a decision on whether to take legal action could be months away.
In papers filed Tuesday with the New York Supreme Court, James' office detailed some of the evidence unearthed in its ongoing civil probe into the former president and the Trump Organization in a bid to get a judge to enforce subpoenas against Trump and two of his children, Ivanka Trump and Donald Trump Jr. All three have worked as top executives at the company.
But pushing the multiyear investigation forward may require substantially more evidence.
James said the company has been slow to turn over documents involving Trump, even though he "personally executed documents central to the issues under investigation." Among the items the AG wants to review are "file cabinets at the Trump Organization holding Mr. Trump's files," as well as "Post-It notes" that he used "to communicate with his employees," Tuesday's court filing said.
The Trump Organization has turned over "more than 930,000 documents" to date and "approximately a dozen current and former Trump Organization employees" have testified in the investigation, James said, but investigators will need information from the three Trumps before deciding whether to pursue a civil case against the company and others.
"The knowledge and actions of Mr. Trump’s agents and attorneys can be imputed to Mr. Trump himself. But Mr. Trump’s actual knowledge of—and intention to make—the numerous misstatements and omissions made by him or on his behalf are essential components to resolving" the investigation, James wrote.
Danny Cevallos, a defense lawyer and NBC News legal analyst, said the allegations against the Trump Organization could lead to criminal problems for the company as well. “Generally, lying to a bank to obtain a loan can be a crime," Cevallos said.
James, in a statement Tuesday, said, "Thus far in our investigation, we have uncovered significant evidence that suggests Donald J. Trump and the Trump Organization falsely and fraudulently valued multiple assets and misrepresented those values to financial institutions for economic benefit."
Her office added that it "has not yet reached a final decision regarding whether this evidence merits legal action."
The Trump Organization did not immediately respond to a request for comment Thursday. Responding to James' filing earlier this week, a company spokesperson said that "the allegations are baseless and will be vigorously defended.”
The court filing from the state attorney general said investigators have already deposed Trump's son Eric Trump, who was also a top executive at the company, but suggested he wasn't very helpful. He "invoked his Fifth Amendment right against self-incrimination in response to more than 500 questions over six hours," the filing said.
Now-former Chief Financial Officer Allen Weisselberg also took the fifth over 500 times during more than five hours of testimony, James said.
Attorneys for Eric Trump and Weisselberg did not immediately respond to requests for comment.
The Trump Organization and Weisselberg were charged last year with tax fraud involving off-the-books payments amid a joint investigation by the Manhattan district attorney and James' office. Both have pleaded not guilty, and the investigation is ongoing.
In the civil probe, James is zeroing in on the former president.
The "focus of the subpoena, and the investigation, is Mr. Trump's statement of financial condition," James' investigators said in a letter to the Trump Organization cited in Tuesday's court filing.
The annual statements, which James said Trump personally signed off on, were used to secure over $300 million in loans, the filing said, and "were generally inflated as part of a pattern to suggest that Mr. Trump’s net worth was higher than it otherwise would have appeared."
The statements wildly overvalued some Trump properties, according to James. Trump's triplex apartment in Trump Tower in Manhattan was valued at $327 million, a figure that was reached by multiplying the number of square feet times the price by square foot, James said. Trump had claimed the apartment was 30,000 square feet, while building records showed the apartment was 10,000 square feet, the court filing said.
The valuation was reduced in later filings after Forbes reported on the size discrepancy. Weisselberg, in his testimony to the AG, "admitted that this amounted to an overstatement of 'give or take' $200 million," the filing said.
Cevallos said the apartment valuation is a particular problem for Trump. "The Trump side will argue that some of these things have amorphous value," but “I’m not sure how they get around misstating square footage in a building,” Cevallos said.
The court filing said one of the rationales the company used for the higher values was the prestige of the Trump name — even though the documents explicitly noted that while Trump’s name “enhances the value of the properties reflected in this statement,” that value “has not been reflected in the preparation of this financial statement.”
It's unclear how long it will take the judge presiding over the case, Arthur Engoron, to decide whether to enforce or toss the subpoenas issued by James' office.
Trump's lawyers argue the investigation is politically motivated, and have sued to stop the probe. That case in federal court is pending. The lawyers also argue that the subpoenas should be thrown out because of the ongoing criminal investigation by the Manhattan district attorney and state attorney general.
Dennis Vacco, a former New York attorney general, said he thought James' filing was "somewhat misaligned" with the Trumps' arguments for quashing the subpoenas.
"The legal crux of the Trump motion to quash is the fact that the attorney general is playing fast and loose with her civil authority given the fact there's an active, ongoing criminal investigation that the AG has announced she's involved with," Vacco said.
While James' filing outlined why depositions from the Trumps would be important for the investigation, she largely sidestepped arguments that it would violate their right to due process if they were forced to testify about matters that are the subject of a criminal investigation.
James' filing contends that the criminal probe shouldn't be a point of conflict for the Trumps because they're aware of the investigation. Vacco, however, said that awareness "doesn't mean they surrender any of their constitutional rights," including their right to due process and against self-incrimination.
While claiming Fifth Amendment protections can't be used against a defendant in a criminal case, Vacco said taking the Fifth in a civil case in New York can be used for "an adverse inference" against a witness.
But the broader issue, he said, is that James' investigators likely have more work to do.
"When you strip all the rhetoric away, they're saying they don't know if they have enough to bring a case yet," Vacco said.
