The New York Attorney General’s Office on Thursday asked a judge to bar former President Donald Trump from moving his businesses to a new holding company amid a pending civil lawsuit accusing him, three of his children, and the Trump Organization of widespread fraud.
That request is spurred by concerns that the AG’s office would have difficulty getting Trump to pay a fine, if he loses the suit, as a result of his assets being held by a company that is not named as a defendant in the case.
On Sept. 21, the same day that Attorney General Letitia James sued Trump and the other defendants, her office saw that the Trump Organization had registered with New York’s secretary of state a new company, called “Trump Organization II LLC.” That new firm is incorporated in Delaware.
James also Thursday asked the Manhattan Supreme Court judge to order Trump not to use a new statement of his business’ financial conditions in dealings with lenders and insurers, either to satisfy existing obligations or to obtain new loans or insurance coverage.
In a court filing, lawyers for James argued that Trump’s 2022 statement of financial condition, which includes claims of valuations for a range of real estate, relies on the same process used to generate the prior financial statements that she has alleged are fraudulent.
James also is seeking the appointment of an independent monitor who would oversee the submission by Trump of financial statements to any accounting firm, as well as their disclosure to lenders and insurers.
“Our investigation uncovered the fact that Donald Trump and the Trump Organization engaged in significant fraud to inflate his personal net worth by billions of dollars to illegally enrich himself and cheat the system,” James said in a statement.
“Since we filed this sweeping lawsuit last month, Donald Trump and the Trump Organization have continued those same fraudulent practices and taken measures to evade responsibility,” James said.
“Today, we are seeking an immediate stop to these actions because Mr. Trump should not get to play by different rules.”
James’s lawsuit accuses Trump of overstating his net worth by billions of dollars in 11 previous annual statements that were provided to banks, insurance companies, and the IRS to obtain financial benefits.
James’ lawsuit seeks at least $250 million in damages, and also asks that the Trump companies named in the complaint be permanently barred from doing business in New York state.
When she announced the suit, James revealed that she had asked federal prosecutors and the IRS to investigate Trump for possible federal crimes, saying her office’s nearly three-year probe had found evidence of potential bank fraud and the crime of making false financial statements.
Trump has called the lawsuit baseless, and “another witch hunt” by James.
He and his lawyer Alina Habba have also said that James’ investigation and suit are politically motivated.
James is a Democrat who campaigned on a promise to investigate Trump when he was president. Trump is a Republican who is considering whether to run again for the White House in 2024.
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