NEW YORK -- New York Attorney General Letitia James asked the court to fine former President Trump, his children and his business over $370 million to disgorge profits from a decade of fraudulent business conduct.
James also requested that Trump and his two former deputies at the Trump Organization - Allen Weisselberg and Jeffrey McConney - be barred for life from participating in the New York real estate industry.
Arguing that "virtually every action they took in preparing those (statements of financial condition) was part of a fraudulent scheme," James said the only way to prevent future fraud was to bar Trump from the real estate industry for life. James also alleged that the Trump Organization under Eric and Donald Trump Jr. lacks "lacks effective leadership" and should be placed into court-appointment monitorship for at least five years to ensure it no longer violates the law.
The request for a $370 million fine, plus nine percent annual interest, is a sharp increase from James' initial request for disgorgement totaling roughly $250 million. In today's filing, she justified the increase by arguing that Trump, his sons, and his top deputies knowingly engaged in the fraud and personally benefited from it.
The largest portion of the requested fine stems from the business loans the Trump Organization obtained using allegedly fraudulent financial statements. Based on expert testimony, James argued that Trump cost his lenders $168,040,168, which the banks would have made if Trump was given the appropriate interest rate corresponding to the actual value of his assets.
James also argued that the Trump Organization used fraudulent documents to win their bid to renovate and operate a hotel in the Old Post Office Building in Washington, D.C., which netted a profit of $139,408,146 from its sale. Donald Trump personally profited $139,408,146 from the deal, and his sons reeled in $4,013,024 each.
Last, the profits from the sale of Trump's Ferry Point golf course in New York net the company roughly $60 million in profit.
James argued that Weisselberg and McConney each profited from these deals through their generous severance agreements, which the Trump Organization used to control their former executives through multiple investigations.
"After these illegal acts came to light, Eric Trump and Donald Trump, Jr. allowed Weisselberg and McConney to remain on the payroll and rewarded them with lucrative severance packages that restricted their ability to cooperate with law enforcement investigations, rather than immediately terminating their employment," James wrote.
In their defense filing, Trump's lawyers countered the argument for a hefty fine by describing the Attorney General's theory for disgorgement as "fundamentally flawed." No lenders testified that they would have done anything differently had they known about Trump's misstatements, and James attempted to fill that evidentiary void with expert testimony, according to Trump's lawyers.
Trump's lawyers added that even if the Attorney General proved that some of Trump's profits were ill-gotten, they lack the authority under New York Executive Law 63(12) to request the disgorgement.
"The Court is simply not free to accept the invitation of the NYAG to ignore the actual facts, the unrebutted evidence, and the testimony of the actual transaction participants," Trump's lawyers wrote.