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Trump Organization deceived banks and IRS, New York Attorney General James says

AILSA CHANG, HOST:

President Trump's family business deliberately deceived banks, insurers and the Internal Revenue Service for many years in order to improve its own financial position. That is according to the New York State Attorney General Letitia James, whose office has been conducting a civil probe of Trump businesses since 2019. In a statement shared late on Tuesday, James says she has reached a, quote, "preliminary determination that there was fraud."

NPR's Ilya Marritz has been covering the story and joins us now. Hey, Ilya.

ILYA MARRITZ, BYLINE: Hi, Ailsa.

CHANG: OK, so we should be clear here - this investigation is still ongoing. Do you get a sense that the state attorney general has an actual case that she can lay out in court at this point?

MARRITZ: She is certainly bringing the kind of evidence that you could imagine being presented to a jury. So there are damaging emails. There are side-by-side ledgers with starkly different numbers. There are previews of potential witness testimony.

The latest legal filing from AG James, which is over a hundred pages, also tells a pretty clear story that I think a jury could understand about a family business that used deception and lies to squeeze every dollar it could out of its properties, whether through loans or tax write-offs, over many years. So she is showing part of her hand right now.

And the reason she's doing that is she wants to convince a judge to compel former President Trump and his two eldest children, Don Jr. and Ivanka, to give depositions under oath and share documents. The Trumps are resisting that effort. Donald Trump has accused her of bad faith, and they've actually countersued her in court.

CHANG: Well, if the New York Attorney General's Office already has all these other documents that form the basis for that legal filing, why do they need these depositions from the Trumps - these additional documents?

MARRITZ: It's important to examine knowledge and intent in a case like this, and that could be particularly challenging here because Donald Trump doesn't email. He doesn't like to give direction in writing. So what Attorney General James needs to do is present her facts to the former president and to Don Jr. and Ivanka and see how they respond and test the credibility of their responses.

For example, Trump's evaluation for his own apartment in Trump Tower increased by about $200 million in just a few years. Did Donald Trump know about that? Did he know that that claim was based on tripling the reported square footage of his home? James says she can show that that actually happened in court, but perhaps Trump can credibly say he didn't know about that.

By the way, James has - already has sworn testimony from one of the adult Trump kids. That's Eric Trump. He was deposed in 2020. James now says that Eric Trump invoked his Fifth Amendment right against self-incrimination over 500 times. I should remind listeners this is a civil probe, but Eric Trump's lawyers must have felt there was a possible criminal exposure here.

CHANG: But, Ilya, it's not exactly news that Trump may have puffed up his own wealth, right? Like, what is new here? What stands out for you?

MARRITZ: There's just a level of narrative detail that we didn't have before, even for stories that are known. I'll give you an example. The Trump Golf Course in LA County, before Trump bought it, there was a landslide there, and the 18th hole crumbled into the Pacific Ocean. Trump's initial idea when he bought the course was to develop part of the remaining land that had not fallen into the sea into 16 buildable lots and a driving range. When that proved to be difficult, he got a better idea, which was to keep the driving range.

But in exchange for not building there, he could claim a tax benefit tied to the value of the land. Naturally, Trump wanted the biggest possible deduction. AG James describes this aggressive campaign by Trump's team to persuade all these third-party consultants who had their doubts that the land was actually incredibly valuable and could easily have been developed for top dollar when that wasn't the case at all. There's also an email from a Trump lawyer who sounds skeptical about this whole thing. Quote, "effectively, U.S. taxpayers are paying Trump to do what he would already do anyway, and perhaps this isn't the best use of taxpayer dollars."

CHANG: So fascinating. That is NPR's Ilya Marritz. Thank you, Ilya.

MARRITZ: Thank you. Transcript provided by NPR, Copyright NPR.

Ilya Marritz