Trump fraud lawsuit: What to know about the case from the New York AG

Yahoo Finance’s Rick Newman joins the Live show to discuss the latest surrounding New York State Attorney General Letitia James’ lawsuit against former President Donald Trump.

Video Transcript

JULIE HYMAN: Former president Trump is in the legal spotlight once again after New York Attorney General Letitia James sued him, his company, and three of his children, saying that Trump falsely inflated his net worth by billions of dollars. Yahoo Finance's Rick Newman joins us now to share the latest. Now, I don't-- I mean, I hope you're keeping a running list of all of these various legal issues. But put this one into context for us in terms of what could be the outcome, how serious this is, et cetera.

RICK NEWMAN: It is a scramble keeping up with all these legal problems former president Trump has. So this is a civil lawsuit from the New York State Attorney General. This one's a bit odd. So she's not charging Trump with crimes, although she does suggest that Trump and his adult children did commit crimes, but that's not what she's doing. It's a civil lawsuit. So she's saying that Trump and his adult children and his company overstated property values consistently and thoroughly for at least 10 years.

And the reason they did that was they got lower interest rates on loans, and they got lower rates on insurance. So the Attorney General Letitia James says they basically saved at least $250 million over a decade by overstating the value of these properties. So what she wants is the company to disgorge that amount they profited by, $250 million. And of course, Trump and his company and his children are not agreeing to that.

So it's not clear if this will actually go to trial, if there will be some settlement. But this long lawsuit also makes allegations of other crimes. And the attorney general says she is referring these to the IRS, which would be for potential tax fraud, and that she's also referring them to the Justice Department for other types of crimes. So she's kind of prodding other authorities to mount criminal prosecutions here, even though that's not what she is doing.

BRAD SMITH: Rick, there's also an update surrounding those classified documents that were seized at Trump's Mar-a-Lago home and resort. What do we know about that?

RICK NEWMAN: Right, so the Justice Department appealed a finding from one judge to an appellate court. And the appellate court basically said we disagree with a certain finding of the first judge that would have slowed down what the Justice Department is trying to do. So the Justice Department and the FBI, the most urgent thing they're trying to do is figure out, has there been any damage to national security from anything that might have happened with these classified documents that Trump was keeping in an unsecure storage closet down at Mar-a-Lago in Florida?

So that's the most urgent thing. And now they will be able to continue that investigation. They will not be blocked by this court order anymore. And unanswered question at this point is whether the Justice Department will go further and actually charge Trump with a crime related to these documents. I don't think anything on that is likely to happen before the midterm elections on November 8. But afterward, if the Justice Department is going to do it, they probably would do something, charge Trump or take some measures such as that after the elections in November.