NYAG Accuses Trump's Company Over Westchester Estate, Golf Club

WESTCHESTER, NY — The New York attorney general's office late Tuesday told a court its investigators have uncovered evidence that former President Donald Trump's company used "fraudulent or misleading" asset valuations to get loans and tax benefits on several properties including the Seven Springs estate in Bedford and the Trump National Golf Club in Briarcliff Manor.

This is a separate investigation from the ongoing criminal probe by the Manhattan District Attorney's Office and the investigation by the Westchester County District Attorney.

The court filing said state authorities haven't yet decided whether to bring a lawsuit in connection with the allegations, but that investigators need to question Trump and his two eldest children as part of the probe.

The Trump Organization issued a statement Wednesday calling the civil investigation "baseless" and politically motivated.

In the court documents, Attorney General Letitia James' office gave its most detailed accounting yet of a long-running investigation of allegations that Trump's company exaggerated the value of assets to get favorable loan terms, or misstated what land was worth to slash its tax burden.

James' office detailed its findings in a court motion seeking to force Trump, his daughter Ivanka Trump and his son Donald Trump Jr. to comply with subpoenas seeking their testimony.

Investigators, the court papers said, had "developed significant additional evidence indicating that the Trump Organization used fraudulent or misleading asset valuations to obtain a host of economic benefits, including loans, insurance coverage, and tax deductions."

Trump has had many brushes with controversy over both the failed Seven Springs development and Trump National Westchester.

The golf course, bought in the mid 1990s, achieved international notoriety after Trump Organization lawyers argued in 2016 that it was only worth $1.35 million for tax valuation. Meanwhile, the then-Republican presidential candidate listed the value of the private club as being worth in excess of $50 million on a candidate disclosure form, according to Eyewitness News.

The 147-acre property had been valued by the tax assessor at $35 million before the Great Recession then slashed to $13.5 million in 2015. In 2017, the Trump Organization's lawyers went back to court seeking a cut in the club's assessed value to $7.5 million. After six years of fighting about it, in July the Ossining Town Board voted five years of back-dated reductions for the club. The Westchester County District Attorney's Office began an investigation into the proceedings in October.

Seven Springs, a large property in three Westchester County towns — Bedford, New Castle and North Castle — is the former estate of Eugene and Agnes Meyer, the family that owned and published The Washington Post. In the early 2000s the Trump Organization proposed a golf course for the site, which ignited protest locally due to fear about contaminated runoff harming Byram Lake, which provides Mount Kisco's water supply. Trump scrapped the plan, then sought to build seven mansions on the Bedford side. In May 2013, the Bedford Planning Board granted tentative approval for the project which was later abandoned by the company, but not before a contractor working for the estate was accused of cutting down trees on Mount Kisco-owned watershed property.

There were no announced plans to develop the North Castle or New Castle sides of Seven Springs. Trump battled a group called the Nature Conservancy, which owned nearby North Castle land, over whether he had an easement right to a portion of Oregon Road that was connected to the group's site. The dispute was in state court from 2006-12, with the conservancy prevailing in an appellate ruling that stated he did not have such a right. The conservancy's land was once owned by the Meyers, who transferred it to Yale University in 1973, who in turn transferred it to the group.

The company then granted a conservation easement for most of the property, and took a $21.5 million charitable deduction.

James' office made specific allegations about Seven Springs and the golf club, plus other properties in New York and California, in a news release Wednesday.

Seven Springs

Seven Springs is a 212-acre property in Westchester County, purchased by the Trump Organization in 1995. In 2004, the Trump Organization valued the property at $80 million; in 2007 they valued it at $200 million; and by 2012, they valued it at $291 million. The principal basis of this last valuation was the contention that the property was zoned for nine luxurious homes worth a supposed $161 million of profit. Two separate, professional appraisers valued the lots that were supposedly going to be developed at mere fractions of the prices used in the Trump Statement of Financial Condition. After receiving the March 2016 appraisal, which valued the property at $56 million, Mr. Trump’s subsequent financial statement was changed in a manner that disguised what would otherwise have appeared as a more than 80 percent drop in the value of Seven Springs (from $291 million to $56 million) by moving the property to a catch-all category where no asset was itemized.

Trump National Golf Club Westchester

Mr. Trump purchased Trump National Golf Club Westchester for $8.5 million. In his 2011 financial statement, the property was valued at $68.7 million. A portion of that total reflected the value of the initiation fee for 67 unsold memberships, totaling $12.77 million on the assumption that the club was currently “getting $150,000” per membership and that amount would only rise. But the investigation determined that the $150,000 number was false. Many new members paid no deposit at all in 2011, and Trump Organization records showed no members paid an initiation fee in 2012. The valuation also included an undiscounted amount from the sale of 31 mid-rise units that the Trump Organization recognized had been “put on hold.”

About the other properties in New York, she said that the valuations of Mr. Trump’s triplex apartment in Trump Tower were based on the assertion that the triplex apartment was 30,000 square feet in size though the actual size was 10,996 sq ft; that the reported values of the unsold residential units of the Trump Park Avenue building were significantly higher than the internal valuations used by the Trump Organization for business planning and failed to account for the fact that many units were rent-stabilized — for one apartment, Ivanka Trump held an option to purchase an apartment she was renting for $8.5 million, but it was valued as high as $25 million on financial statements; and that financial statements represented that 40 Wall Street had valuations between two and three times the recorded appraisals.

In its statement about the New York AG's court filing, the Trump Organization said James was improperly attempting to obtain testimony that could be used in the parallel criminal investigation being overseen by Manhattan District Attorney Alvin Bragg.

Trump sued James in federal court last month, seeking to put an end to her investigation. In the suit, his lawyers claimed the attorney general, a Democrat, had violated the Republican's constitutional rights in a "thinly-veiled effort to publicly malign Trump and his associates."
In the past, the Republican ex-president has decried James' investigation and Bragg's probe as part of a "witch hunt."

In its statement, the Trump Organization said "the only one misleading the public is Letitia James."

"She defrauded New Yorkers by basing her entire candidacy on a promise to get Trump at all costs without having seen a shred of evidence and in violation of every conceivable ethical rule," they wrote. "Three years later she is now faced with the stark reality that she has no case."

In a statement late Tuesday, James' office said that it hasn't decided whether to pursue legal action, but said the evidence gathered so far shows the investigation should proceed unimpeded.

"For more than two years, the Trump Organization has used delay tactics and litigation in an attempt to thwart a legitimate investigation into its financial dealings," James said. "Thus far in our investigation, we have uncovered significant evidence that suggests Donald J. Trump and the Trump Organization falsely and fraudulently valued multiple assets and misrepresented those values to financial institutions for economic benefit."

The Associated Press contributed to this report.

SEE ALSO:

• Trump Children Subpoenaed By NY AG In 7 Springs Probe
• DA Reportedly Issues New Subpoenas in Trump Seven Springs Probe
• Westchester DA Investigating Trump's Golf Club: Report
• Trump Gets Planning Board Approval for Houses
• Trump Contractor Cut Down Mt. Kisco Trees: Village
• Trump Golf Club Value Plummets When it Comes to Taxes
• Trump Seeks 90% Cut in Property Taxes on His Westchester Golf Club.