New York AG Letitia James said Mar-a-Lago was part of an alleged yearslong fraud scheme by Trump.
Trump claimed Mar-a-Lago was worth $739 million, nearly 10 times its actual worth of $75 million, James said.
James said Trump's valuation ignored "significant restrictions" on his South Florida property.
For the past month, Mar-a-Lago has dominated the headlines amid a high-stakes dispute between the Justice Department and former President Donald Trump over a criminal investigation into government records once stored at his South Florida home.
On Wednesday, the West Palm Beach estate came into play once more on a separate, newly perilous front in the former president's legal battles.
In a wide-ranging lawsuit, the New York attorney general's office accused Trump, his three eldest children, and namesake business of vastly overstating their assets as part of a years-long fraud scheme. Invoking the title of Trump's 1987 memoir and business-advice book, Attorney General Letitia James said: "Claiming to have money that you do not have does not amount to the art of the deal; it's the art of the steal."
Her office's 280-page lawsuit identified 23 assets — among them, Mar-a-Lago.
In financial statements, James said, Trump "blatantly ignored legal restrictions" on the use of his Mar-a-Lago property that materially affected its value. Trump valued his South Florida estate "on the false premise that it sat on unrestricted property and could be developed for residential use," she said.
But James alleged that Trump knew Mar-a-Lago was subject to "onerous" restrictions, having personally signed deeds "sharply restricting" changes to the property. Trump also donated his residential development rights in an effort to receive a tax deduction and lower his property taxes, she said.
The deeds also require Trump to donate more than 23 percent of Mar-a-Lago's value to a historic preservation trust if he ever sells the property.
According to the lawsuit, Trump once valued Mar-a-Lago as high as $739 million. In reality, the lawsuit said, the club generated annual revenues of less than $25 million and should have been valued close to $75 million — about a tenth of Trump's valuation.
James's lawsuit alleges that Trump's overvaluation of properties was hardly limited to his wintertime confines. It extended, she said, to Trump's golf courses — including clubs in Scotland and Florida.
As a civil — rather than criminal — lawsuit, James' case against Trump does not come with the risk of prison time for the former president or his three eldest adult children: Donald Jr., Eric, and Ivanka Trump. James is instead seeking $250 million in penalties and moving to permanently bar the Trumps from serving as an officer or director of a business in New York. Her office's lawsuit also called for a five-year ban on Trump and his children participating in any real estate transactions — a potentially devastating restriction on the former president's family business.
James' lawsuit brought a new intensity to just one of the many areas of legal jeopardy for the former president.
In Georgia, an Atlanta prosecutor has subpoenaed several Trump allies as part of an investigation into efforts to overturn the state's 2020 election results. In Washington, DC, former Trump White House advisors have appeared before a federal grand jury investigating the events surrounding the January 6, 2021 attack on the Capitol.
Meanwhile, the Justice Department has tangled with Trump's lawyers in the aftermath of the August search of Mar-a-Lago, where federal agents retrieved more than 11,000 government documents, including more than 100 marked as classified.
A Trump-appointed federal judge granted the former president's request to have an outside arbiter — known as a special master — review the records and sift out any potentially covered by attorney-client or executive privilege. Judge Aileen Cannon ordered the Justice Department to temporarily halt its review of the records as part of a criminal inquiry into Trump's handling and storage of classified documents taken from the White House to Mar-a-Lago.
In an appeal, the Justice Department said the decision would cause "irreparable harm" to efforts by the intelligence community to protect national security.
On Tuesday, the Justice Department and Trump's lawyers made their first appearance before the special master: Raymond Dearie, a senior judge and former chief judge of the federal court in Brooklyn. At a hearing in Brooklyn, Dearie bristled at the refusal of Trump's lawyers to back up the former president's claim that he declassified the highly-sensitive records discovered at his South Florida residence.
The criminal laws implicated by Trump's handling of government records — including the Espionage Act — do not require that the documents were classified. Nonetheless, Trump has claimed that he declassified the documents.
Without any evidence that Trump took steps to declassify those records, Dearie said he would need to defer to the markings designating materials as containing national security secrets, including some indicating that they include intelligence from human sources and foreign intercepts.
"My view of it is, you can't have your cake and eat it," Dearie said Tuesday.
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