Trump opposes watchdog for financial statements sought by New York Attorney General James in sweeping fraud lawsuit

Real Estate

Former U.S. President Donald Trump throws caps as he attends a rally in Warren, Michigan, U.S., October 1, 2022.
Dieu-nalio Chery | Reutersm

Former President Donald Trump and related defendants are opposing New York Attorney General Letitia James’ call for an independent monitor to oversee the Trump Organization’s submission of financial statements to third parties as part of a bombshell fraud lawsuit, according to a new court filing.

James has asked a judge to name a watchdog who would review financial information that the company and defendants give lenders, insurers and accountants pending the outcome of the lawsuit.

The attorney general’s office requested the watchdog as part of a sweeping September lawsuit accusing Trump, three of his adult children, their company and others of a decadelong fraud related to financial statements.

In their court filing Wednesday, Trump’s lawyers said James’ request for an outside monitor for the company is “a politically motivated attempt to nationalize a highly successful private enterprise.” The lawyers argued that it “is precluded under our Constitution and must and should therefore be rejected.”

James’ suit in Manhattan Supreme Court accuses the former president and the Trump Organization of repeatedly misstating the value of various real estate assets and his net worth on financial statements that were used to obtain loans, insurance policies and tax benefits.

She claims Trump overstated his net worth by billions of dollars, and has asked federal prosecutors in Manhattan and the IRS to investigate him for possible federal crimes. James said evidence obtained during her three-year civil probe of Trump indicated possible crimes of bank fraud and making false statements to financial institutions.

James’ suit seeks about $250 million in penalties.

The Trump defense filing Wednesday flatly rejects her allegations of fraud.

“Even the excerpted and selected transcripts and documents fail to show the Trump Parties have ever even been late on so much as one loan payment over the past decade much less engaged in any actual fraud,” the filing said.

Trump’s lawyers accuse the attorney general of manufacturing “a bill of grievances based on nothing more than a misapplication of standard accounting principles and gross exaggeration of routine valuation differences between counter parties to complex commercial lending transactions,” according to the filing.

The filing said the monitor she requests would possess “staggeringly overbroad” powers because the person would have access to “all of the Trump Parties’ financial records, compelling the Trump Parties to make onerous informational disclosures to the monitor, and grant the monitor operational oversight over the financial affairs of private businesses.”

James’ request “would effectively allow the NYAG to nationalize the Trump business empire,” the lawyers claimed.

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