New York Attorney General Letitia James sued former President Donald Trump, the Trump Organization and others, including the ex-president’s eldest child, for financial fraud on Wednesday, in a lawsuit that includes allegations that the organization made misrepresentations in its purchase of surety bonds and liability insurance for board members and officers.
The lawsuit follows a petition filed earlier this year that contains some of the allegations.
The extensive lawsuit alleges that the defendants wrongly inflated Mr. Trump’s net worth by billions of dollars to get banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company.
The lawsuit alleges, among other things, that the Trump Organization and other defendants submitted false and misleading statements, along with other representations, to financially benefit from the Trump Organization̵7;s surety bond program, which involved surety bonds purchased from Zurich Insurance Group Ltd. placed by Aon PLC, and from its D&O insurers, which included Everest National Insurance Co.
According to the lawsuit, in 2016 D&O underwriters were given “no more than cursory access to Mr. Trump’s statements, through a supervised personal review at Trump Tower. Pursuant to a nondisclosure agreement, the Everest guarantee would incorporate information from Trump’s annual statement from (Trump Chief Financial Officer) Allen Weisselberg for the annual renewal. At no time during such financial audits were the underwriters informed of the false and misleading valuations in the statement.”
The lawsuit says notices of claims under D&O coverage were sent to entities within Tokio Marine HCC, Ryan Specialty Holdings Inc. Swiss Re Ltd, Argo Group International Holdings Ltd. and Allianz Group through Aon. The defendants concealed the existence of at least one state investigation, conducted by the New York attorney general’s office, the lawsuit states.
The lawsuit seeks to permanently bar Mr. Trump, Donald Trump Jr., Ivanka Trump and Eric Trump from serving as officers or directors of any New York corporation; prevent mr. Trump and the Trump Organization from entering into any real estate acquisitions in New York for five years; and awarding all financial benefits “obtained through the persistent fraudulent practices,” estimated to total $250 million
Trump’s lawyers did not respond to requests for comment.