Donald Trump has long been known as a notorious cheater on the golf course.
And in Wednesday’s sweeping civil fraud lawsuit against the former president and his family, New York Attorney General Letitia James charged that Trump’s golf properties in New Jersey and elsewhere were at the center of a long-running scheme to make it look as if it were. It was much richer than it actually was.
“With the help of his sons and the top executives of the Trump Organization, Donald Trump has wrongly inflated his net worth by billions of dollars to unfairly enrich himself and deceive the system,” James said. In fact, the basis of his alleged net worth is rooted in fraud and incredibly illegality.
The numbers game claimed by the attorney general’s office wasn’t just aimed at polishing the image of the billionaire Trump. Investigators also accused him of giving him a financial advantage, such as obtaining favorable loan terms. At the same time, the 214-page complaint charged that the Trump Organization would undervalue its assets at other times for tax purposes.
“This investigation has revealed that Donald Trump has engaged in years of illegal behavior to inflate his net worth, to deceive the banks and residents of the great state of New York,” James said at a news conference. “Claiming that you have money that you don’t have is not quite the art of the bargain. It is the art of stealing.”
Trump’s golf holdings extend from Bedminster, Pine Hill in Camden County, and Colts Neck, all in New Jersey, to Mar-a-Lago in Florida, and to clubs in New York, Los Angeles, Charlotte and Scotland. The lawsuit alleged that Trump’s financial statements did not include separate values for each of these facilities.
“Instead, the values of those characteristics are grouped together into one form. This was done intentionally to mask large fluctuations in the value attributed to individual clubs and to mask the methods used to arrive at those values,” the court filing noted. “This lump sum was by far the largest asset value in Mr. Trump’s statement of financial position each year.”
James, a Democrat, is seeking to remove the Trump family from the companies involved in the alleged fraud — which will include Trump National Golf Clubs. It also wants to appoint an independent monitor for at least five years to oversee Trump Organization compliance and financial reporting, assessments and disclosures to lenders, insurers and tax authorities.
Trump, in a statement posted on his Truth Social, called the lawsuit “another witch hunt by a racist attorney general” and described James, who is black, as a “rogue who campaigned on the ‘get Trump’ platform,” despite the fact that the city is one of the The catastrophes of crime and murder in the world are under her watch!”
Trump’s attorney, Alina Heba, said the allegations in the lawsuit were “unfounded.”
In a statement, Habba said the lawsuit “does not focus on facts or the law – it only focuses on advancing the attorney general’s political agenda.”
According to the lawsuit, Trump and the Trump Organization used “various deceptive schemes” to inflate their values.
Each year, according to the New York filing, Trump derived the value of the golf course based on his capital contributions since the start of his ownership adjusted by the “multiplier,” which is known as the fixed asset approach and does not take into account any depreciation.
But the lawsuit said using this approach to derive the market value of a golf course is against industry practice. In fact, Trump himself admitted to the IRS in 2012 when he sought to maximize the value of a conservation easement related to the Bedminster golf club.
Such exemptions provide significant tax credits in exchange for maintaining the open space.
The IRS sought to reduce the amount of the Bedminster conservation easement. But Trump’s lawyer argued that the easement should depend on the income the golf course could generate and that was the appropriate measure, telling the government that “the price at which the golf course would trade depends on the revenue it can produce.”
At the same time, in an assessment submitted to the IRS by the Trump Organization, he stated that an income-based approach is the accepted method for assessing a golf course.
However, this is not the approach that the organization would later take when it was evaluating golf courses for the purpose of property tax assessment to defend lower tax assessments.
At Trump National Golf Club in Colts Neck, for example, the Trump Organization purchased the property in July 2008 for $28 million. According to the lawsuit, the company’s assessments of Colts Neck will subsequently be inflated with false and misleading numbers, including alleged club improvements and the alleged value of unsold memberships.
The Trump Organization priced the vast majority of unsold members at two to more than three times the current membership price at the time of $50,000, while failing to calculate how long it would take to sell that membership.
“There was no evidence to suggest that membership prices and the numbers in the supporting data were well-intentioned forecasts of membership revenue,” the attorney general’s office said.
At the Trump National Golf Club in Pine Hill, New Jersey, the attorney general alleges that similar errors were used in the organization’s financial health statements from 2011 to 2021.
The Trump Organization did not account for land rent expenses when calculating property appraisals. The assessments failed to include the rent payments required under the terms of the land lease or account for the fact that the land lease agreement requires landlord consent in order for Trump to transfer his interest in the lease to unrelated parties.
In addition, the Trump Organization also used the Unsold Membership Scheme, the attorney general said. For example, in 2011 the starting fee listed was only $10,000, but the company valued all unsold memberships at prices between $15,000 and $35,000. And in 2012, unsold memberships were valued at between $15,000 and $30,000.
“In fact, Trump Organization records show that most membership initiation fees have been waived for new members,” the lawsuit said.
The attorney general’s office said the Trump Organization ignored the most basic rules and standards for financial reporting, including proving that Mr. Trump had cash on hand but did not do so; Ignore critical constraints that would significantly lower property value when determining valuations; Changing the methodology used for valuing real estate from year to year, without reason or notice and by using vastly different methods for valuing different properties even in the same year.
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