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New York Attorney General Letitia James sues former President Donald Trump over alleged business fraud

Donald Trump speaks out about lawsuit filed against him by New York AG
Donald Trump speaks out about lawsuit filed against him by New York AG 02:00

NEW YORK -- Former President Donald Trump's legal troubles mounted Wednesday as New York Attorney General Letitia James   sued him for years of alleged financial fraud and inflating his net worth by billions to "enrich himself and cheat the system." 

Three of Trump's adult children were also named in the civil suit, which seeks to remove the entire family from their roles in the Trump Organization. She accused them of "staggering fraud." 

But CBS2's political reporter Marcia Kramer says this could be just the beginning of the former president's legal woes. 

Trump has tried every which way to thwart James' investigation. He hasn't succeeded, and now James says that while she has brought civil charges, she is forwarding the findings of her three year probe to the Manhattan U.S. Attorney and the IRS for possible criminal prosecution. 

N.Y. Attorney General Letitia James sues former President Trump 18:21

"The path of fraud and deception that was used by Trump and the Trump Organization is astounding," James said. "Claiming money that you do not have does amount to the art of the deal. It's the art of the steal." 

James took a pointed swipe at the former president, using the title of his 1987 book against him as she filed a sweeping civil suit against Trump, the Trump Organization, and Donald Jr., Ivanka and Eric Trump. Two longtime Trump Organization executives, Allen Weisselberg and Jeffrey McConney, are also named in the suit.  

James claimed the Trumps participated in a conspiracy to inflate his net worth by billions of dollars to get banks to lend money to the Trump Organization on terms that were more favorable to get better loan rates, better insurance rates, and tax benefits. She said her three year probe covered a 10 year period from 2011 to 2021, and covered years when he was the 45th president. 

"In all, we uncovered more than 200 examples of false and misleading asset valuations that were used on his statements," James said. 

The attorney general said the false statement were made involving the Trump Organization's portfolio of properties including Trump Tower, 40 Wall Street, his palatial Mar-a-Lago home and resort and his various golf clubs, including the Trump Aberdeen in Scotland. 

Mar-a-Lago generated annual revenue of $25 million and should have been valued at about $75 million. However, Mar-a-Lago was valued as high as $739 million. 

She took particular pains to discuss how he allegedly inflated the value of his triplex in Trump Tower on Fifth Avenue. 

"Mr. Trump represented the apartment spanned more than 30,000 square feet, which was the basis for evaluating the apartment. In reality, the apartment has an area of less than 11,000 square feet," she said. 

James said the alleged financial hijinks allowed Trump to value the apartment in 2015 at $327 million. 

"To this date, no apartment in New York City has ever sold for close to that amount. Tripling the size of the apartment valuation was intentional and deliberate fraud," James said. 

Several times during her press conference, she pointed out that Donald Trump repeatedly took the Fifth when he was questioned under oath about his business dealings

"White collar financial crime is not victimless crime. When the well-connected break the law, taking more money than they are entitled to, it reduces resources to working people, to regular people, to small businesses and all taxpayers," James said. "Everyday people cannot lie to a bank about how much money they have in order to get a favorable loan to buy a home or to send their kid to college, and if they did, the government would throw the book at them." 

Watch Marcia Kramer's report

Lawsuit accuses Trump, 3 children of inflating net worth by billions 03:27

"Today's filing is neither focused on the facts advancing the attorney general's political agenda. #witchhunt,"  Trump lawyer Alina Habba wrote on Twitter. 

She called the suit "meritless." 

"It is abundantly clear," Habba said, "that the Attorney General's Office has exceeded its statutory authority by prying into transactions where absolutely no wrongdoing has taken place. We are confident that our judicial system will not stand for this unchecked abuse of authority."  

In a statement on Truth Social, Trump responded, calling it "another witch hunt by a racist attorney general, Letitia James." 

James said her probe began when Trump's former attorney testified before Congress. Wednesday, Cohen talked about why he didn't call Trump out on his financial inflation. 

"You don't tell the emperor that he's naked. Otherwise, you lose your job on the spot," Cohen said. 

Cohen said Trump kept his finger on the pulse of the business. 

"I always say Donald knew everything about everything going on at the Trump Organization," Cohen said. 

Cohen alleged Trump got away with it so long because he fought every attempt to investigate his dealings. 

"The system protects the rich. Donald Trump has always set himself out as someone who is willing to fight, to fight to the death, especially if it has to do with a legal issue," Cohen said. 

Watch Marcia Kramer's report

New York Attorney General sues Donald Trump, 3 eldest children 03:59

Late Wednesday, the former president publicly defended himself in an interview on Fox News.

"This was just a continuation of a witch hunt," Trump said. "She campaigned on it four years ago. It was a vicious campaign, and she just talked about Trump and 'we're going to indict him, we're gonna get him.' She knew nothing about me. I never heard of her."

The interview was filmed at Mar-a-Lago.

"First of all, these are banks that have the best law firms in the world, the biggest and best and most powerful. They do their own work," Trump said.

What New York lawsuit could mean for Trump's future 05:31

As CBS2's Tim McNicholas reports, in the interview, Trump said the banks he worked with received disclaimers about his financial statements.

"What we do is, here's a financial statement, but be careful because it may not be accurate, it may be way off," he said.

James wants Trump and his three eldest children barred from serving as officers of any New York state corporation, and the appointment of a special master to run the Trump Organization. She wants at least $250 million in restitution. 

Meanwhile, Manhattan District Attorney Alvin Bragg issued a statement, saying his probe of the former president and the Trump Organization is "active and ongoing." 

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