James said Trump "falsely inflated his wealth by billions of dollars" to enrich himself and his family and the lawsuit seeks to effectively shutter the former president's namesake business, the Trump Organization.
"Mr. Trump thought he could get away with the art of the steal, but today, that conduct ends," James said. "There aren't two sets of laws for people in this nation: former presidents must be held to the same standards as everyday Americans."
James said she has referred some of the allegations to federal authorities, including the Manhattan U.S Attorney's Office and the IRS for possible criminal investigation.
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The extraordinary lawsuit, which also names children Donald Trump Jr., Ivanka Trump and Eric Trump, seeks $250 million in penalties; a permanent ban on the Trumps from running businesses in New York; and the legal action attempts to block Trump and the Trump Organization from purchasing commercial real estate in New York for five years.
James described an "astounding" pattern of fraud that allegedly represented a "violation of the law."
The lawsuit alleges that Trump, with the aid of his children and senior executives at the Trump Organization, falsely inflated his net worth by billions of dollars "to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company."
The false valuations, state officials asserted, also sought to induce insurers to provide coverage at lower premiums. For a decade, Trump and the business "created more than 200 false and misleading valuations of assets on his annual Statements of Financial Condition to defraud financial institutions," the attorney general said.
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The Trump family and political allies fired back Wednesday, accusing the attorney general, a Democrat, of engaging in a politically motivated campaign against the former president and his family.
"New York’s radical Attorney General Letitia James is using her office to attack President Trump just 48 DAYS before her own election. These politically-charged witch hunts will FAIL!" tweeted the Trump War Room, a rapid response arm of the former president's political action committee.
Donald Trump Jr. referred to the legal action as "bull----."
"Dem witch-hunt continues!" he tweeted.
Eric Trump also cast the lawsuit as a political attack, asserting that James was not acting in her role as attorney general but serving as an arm of "the DNC (Democratic National Committee)."
The attorney general's legal action is based largely on annual assessments of Trump's net worth, known as Statements of Financial Condition, compiled by Trump Organization executives and issued by the former president's accounting firm.
"The statements were personally certified as accurate by Mr. Trump or by one of his trustees when being presented to financial institutions with the purpose and intent that the information contained in the statement would be relied upon by those institutions," James said.
Those statements, according state officials, included inflated valuations of properties, ranging from Trump's Manhattan residence at Trump Tower, his golf courses and his Mar-a-Lago estate in Florida.
The Mar-a-Lago property, officials said, was valued as high as $739 million "based on the false premise that it was unrestricted property and could be developed and sold for residential use, even though Mr. Trump himself signed deeds donating his residential development rights, sharply restricting changes to the property, and limiting the permissible use of the property to a social club."
"In reality, the club generated annual revenues of less than $25 million and should have been valued at closer to $75 million," the attorney general said.
The Trump National Golf Club in Jupiter, Florida, according to state officials, was purchased for $5 million, yet was valued a year later on the 2013 financial statement for $62 million.
At Trump Tower, the former president's apartment was allegedly listed in 2015 as triple its actual size of 10,996 square feet, and valued at $327 million.
"That price was absurd given the fact that at that point only one apartment in New York City had ever sold for even $100 million," James said.
Last month, Trump repeatedly invoked the Fifth Amendment during a deposition as part of James' civil fraud investigation into the Trump Organization's finances, including when asked specifically about the alleged valuation discrepancies involving his Trump Tower residence, according to court documents.
Trump's attempt to shield himself from possible criminal jeopardy recalled his remarks during a 2016 campaign stop when he compared those who have invoked their constitutional right against self-incrimination to mobsters: “The mob takes the Fifth. If you’re innocent, why are you taking the Fifth Amendment?”
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James' investigation was launched more than three years ago after former Trump attorney Michael Cohen told federal lawmakers that the former president regularly inflated the value of his properties and net worth to get better insurance and loan rates.
"It was my experience that Mr. Trump inflated his total assets when it served his purposes, such as trying to be listed among the wealthiest people in Forbes, and deflated his assets to reduce his real estate taxes," Cohen told the Oversight and Reform Committee.
In May, the attorney general signaled the inquiry was nearing an end and that investigators had amassed substantial evidence that could support legal action, such as a lawsuit, against Trump, his company or both.
The attorney general's action is related to one of several investigations targeting the former president:
Trump is in the midst of challenging the seizure of tranches of classified documents from his Mar-a-Lago, Florida, estate, as part of a federal inquiry into possible obstruction, the mishandling of government records and violations of the Espionage Act.
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Separately, former Trump administration officials have been called to testify before a federal grand jury investigating attempts to overturn the 2020 election.
And in Atlanta, a local district attorney is conducting a wide-ranging criminal probe that includes Trump's efforts to pressure Georgia officials to reverse President Joe Biden's 2020 election victory there. So far, more than a dozen people, including Trump lawyer Rudy Giuliani, have been notified that they are targets of that investigation.
This article originally appeared on USA TODAY: NY AG Letitia James sues Donald Trump, family; accuses them of fraud