New York Attorney General files civil lawsuit against Trump family and company

Yahoo Finance reporter Alexis Keenan explains the legal ramifications of NY Attorney General Letitia James's civil lawsuit filed against former President Trump and his family.

Video transcript

[AUDIO LOGO]

DAVID BRIGGS: All right. New York Attorney General Letitia James causing a political earthquake, filing a suit against former President Donald Trump, his three oldest children, and the Trump Organization, accusing them of more than 200 instances of fraud over 10 years. Let's hear what she had to say.

LETITIA JAMES: This conduct can not be brushed aside and dismissed as some sort of good faith mistake. The statements of financial condition were greatly exaggerated, grossly inflated, objectively false, and therefore fraudulent and illegal. And as a result of that, we are seeking relief. And he-- and Mr. Trump, the Trump Organization, his family, they should all be held accountable.

DAVID BRIGGS: The New York AG there. Alexis Keenan here with more. Alexis, we've almost become numb to legal peril from the former president, but this is a big deal.

ALEXIS KEENAN: It's a big deal. And at this stage, it's a civil complaint, but there are trappings and some criminal allegations that AG James have put into this complaint. Now, it's 200 and some pages. I haven't been through all of them yet, but I'll tell you what I know

So there are seven counts in there, this mixed bag of criminal accusation-- criminal accusations and civil. It's a fraud and business misrepresentation case so far. What the AG alleges is that Donald Trump, along with his three children who work at the Trump Organization, also Allen Weisselberg, the CFO who just pled guilty to some criminal fraud charges, and also Jeffrey McConney, who is the second in command to Weisselberg, they are all named, as are a litany of different Trump organizations.

And the focus is on 11 years of what are called annual statements of financial conditions. That's what AG James was just talking about there. It's from 2011 until 2021, she says. They're misrepresentations, according to her, of Donald Trump's net worth. And why that's important, she says, is that those numbers were illegally inflated, she said to the tune of billions of dollars and that the purpose, she said, was to A, induce banks to give favorable lending terms to Trump and the organization, and also to give favorable insurance, to get underwriters to give good terms on insurance for his properties, mostly by inflating real estate properties. That's how she claims that this scheme was cooked up.

So I want to give you just one example that's in here, and there are many. But this is just one of her type of allegations. Now, if we look at Trump's home at the Trump Tower, AG James claims that in the year 2015 that there was an overstatement of the square footage on that residence of 19-- by 19,000 approximate square feet.

She says that it was actually stated as it was 30,000 square feet, but it was really just 11 square feet. And also, the price per square foot, she says, was then also inflated three times higher than the highest sale that year. So that's the type of thing that she's talking about here. And it goes through instances like that, similar to that, across the Trump properties and across his golf courses and-- so really globally here.

RACHELLE AKUFFO: And, Alexis, as you mentioned, this is a civil case, but what about the potential for criminal charges as well?

ALEXIS KEENAN: Yeah, so AG James did say that she was taking her allegations here and referring them over to the Southern District of New York, referring them to the Manhattan DA. So we can expect then that they are sharing information. She said that she would be cooperating with any request that they have in the evidence that she has dug up so far in her investigation. And also, at a press conference, it was asked whether the IRS would also be learning about these claims. She said, yes, that all of these agencies that would have interest in what she found would be apprised and would be able to access what she has turned up.

DAVID BRIGGS: And a $250, I think, million fine is what he's facing on the civil portion of this.

ALEXIS KEENAN: Well, actually, AG James is asking for a lot here. She wants $250 million. She says that's the ill begotten gains that these schemes have turned up. But that's not all. She also wants to dissolve the corporations that are run by Trump and his associates in the state of New York, also wants to restructure them, wants to bar the family members from serving as officers and directors of any New York entity that they have, and also wants to replace the company's trustees, and also wants a third-party monitor to go in place to oversee these companies.