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New York AG Requests a Court-Appointed Monitor to Oversee Trump Organization’s Financial Disclosures as Fraud Lawsuit Unfolds

Donald Trump, Letitia James

Donald Trump, Letitia James

New York State Attorney General Letitia James (D) asked a judge on Thursday to appoint a court-appointed monitor to oversee the Trump Organization’s financial disclosures, alleging that the company has “continued those same fraudulent practices” that made her file suit in the first place.

On Sept. 21, James sued former President Donald Trump; his adult children Eric Trump, Donald Trump Jr., and Ivanka Trump; and several other people and entities, alleging a pattern of inflating and deflating assets to obtain tax benefits. The alleged fraud was so pervasive, James said, that Trump and his family members named in the lawsuit should never serve as an officer and director in a corporation again.

On Thursday, James told a judge that Trump has “continued using practices they knew to be improper or fraudulent” — and requested a preliminary injunction designed to block those alleged practices from resuming.

“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 wrote 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. Today, we are seeking an immediate stop to these actions because Mr. Trump should not get to play by different rules.”

James also wants a judge to block Trump from moving his company and assets out of New York to avoid enforcement.

“Beyond just the continuation of its prior fraud, the Trump Organization now appears to be taking steps to restructure its business to avoid existing responsibilities under New York law,” her assistant Kevin C. Wallace wrote in a 26-page memo. “On September 21, 2022, the same day OAG filed this action, the Trump Organization registered a new entity with the New York Secretary of State: Trump Organization II LLC.”

James said that this entity was incorporated was incorporated in Delaware only days earlier.

“When [the Office of the Attorney General] raised its ‘concern that the Trump Organization may be seeking to move assets out of state,’ and asked counsel for ‘some assurance that there will be no change to the status quo ante over the coming months (or that [OAG] will at least have reasonable advance notice of asset transfers),’ the Trump Organization offered no assurances,” the memo continues.

The attorney general’s office says that the evidence that they amassed over their nearly three-year investigation shows that they are likely to succeed.

“The Trump Organization engaged in numerous instances of fraudulent and illegal conduct in the preparation and dissemination of over a decade’s worth of Mr. Trump’s Statements,” the memo states. “Moreover, the Trump Organization (along with the other Defendants) repeatedly inflated the value of Mr. Trump’s assets on his Statements through fraud and misrepresentation, and then submitted those Statements to financial institutions to receive benefits that the company would not otherwise have obtained.”

All told, the attorney general added: “The evidence of the Trump Organization’s fraud in deriving and presenting the asset valuations reflected in the Statements over the course of a decade-plus is overwhelming.”

Trump’s attorney Alina Habba did not immediately respond to an email requesting comment.

Read the memo, here.

This is a developing story.

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Law&Crime's managing editor Adam Klasfeld has spent more than a decade on the legal beat. Previously a reporter for Courthouse News, he has appeared as a guest on NewsNation, NBC, MSNBC, CBS's "Inside Edition," BBC, NPR, PBS, Sky News, and other networks. His reporting on the trial of Ghislaine Maxwell was featured on the Starz and Channel 4 documentary "Who Is Ghislaine Maxwell?" He is the host of Law&Crime podcast "Objections: with Adam Klasfeld."