New York Seeks Injunction Against Trump To Stop Alleged Ongoing Fraud

Topline

New York Attorney General Letitia James asked a state court Thursday to bar the Trump Organization from continuing activities that allegedly constitute fraud while her lawsuit against the company moves forward, which would impose consequences on former President Donald Trump and his business more quickly than waiting for a final judgment in the case.

Former U.S. President Donald Trump leaves Trump Tower to meet with New York Attorney General Letitia … [+] James for a civil investigation on August 10 in New York City.

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Key Facts

James asked the court to issue an injunction that would prohibit the Trump Organization from submitting statements of financial condition or other asset disclosures to lenders or insurance companies, unless they “adequately disclose” how those assets were valued, after the AG accused Trump and his company of fraudulently inflating assets’ values on financial documents.

The injunction also asks the court to stop the Trump Organization from transferring or disposing of any material assets without court approval—citing the likelihood he could transfer his assets out of state—and for an independent monitor to be appointed to oversee the company’s activities.

James sued the Trump Organization, Trump himself, his children and business associates in September following a years-long civil investigation, accusing the former president and his company of “repeated and persistent” fraudulent activity in order to “injustly enrich” Trump and obtain more favorable business deals.

The AG argued the court should issue the injunction “to prevent the continuation of the fraudulent valuation scheme,” alleging the company “has continued using practices they knew to be improper or fraudulent” and restructured its business by creating a new Delaware-based company after James’ lawsuit was filed to “avoid existing responsibilities under New York law.”

James argued the court should also grant the injunction because she believes the state is likely to ultimately succeed in the case, alleging the evidence of fraud “is overwhelming.”

The Trump Organization has not yet responded to a request for comment, but Trump’s attorney Alina Habba said in a statement the filing was “simply another stunt” and the ex-president’s attorneys “have repeatedly provided assurance, in writing, that the Trump Organization has no intention of doing anything improper.”

Crucial Quote

“There is every reason to believe that the Defendants will continue to engage in similar fraudulent conduct [as alleged in the lawsuit] right up to trial unless checked by order of this Court,” James argued in her injunction request.

Chief Critic

Trump and the Trump Organization have strongly opposed James’ lawsuit, which the company described in a statement as “the culmination of nearly three years of persistent, targeted, unethical political harassment” by the AG and “about politics, pure and simple.” The former president slammed the lawsuit on Truth Social as “another Witch Hunt by a racist Attorney General.”

Big Number

$250 million. That’s approximately how much James is asking Trump and the other defendants to pay in fines as part of the state’s lawsuit.

What To Watch For

Legal experts predicted to Insider it may take years for James’ lawsuit against Trump to play out, which explains why the AG wants the court to impose some consequences now rather than waiting for the litigation to wrap up. In addition to the financial penalties, New York’s lawsuit asks the court to ultimately impose a broad array of consequences against Trump, his family and the Trump Organization, including canceling certificates for Trump’s businesses, imposing more oversight on the company, barring Trump from engaging in any commercial real estate acquisitions for five years and blocking him and his children from serving as officers or directors in any New York business.

Key Background

James sued Trump and his company in September after initially opening a civil investigation into the Trump Organization in March 2019, after ex-Trump attorney Michael Cohen testified to Congress the then-president had fraudulently changed the value of his assets on financial statements for personal gain. The lawsuit accuses the Trump Organization of “more than 200 false and misleading valuations of assets” on financial documents from between 2011 and 2021, including for such properties as Trump’s Mar-A-Lago estate in Florida and his apartment at Trump Tower. The complaint personally implicates Trump, alleging the fraudulent documents were used to inflate Trump’s own net worth and “were approved at the highest levels of the Trump Organization—including by Mr. Trump himself.” James’ investigation included interviews with more than 65 witnesses, according to the AG’s office, including Eric Trump, Donald Trump, Jr., Ivanka Trump and the former president, who was deposed in August but refused to answer questions and invoked his Fifth Amendment rights.