New York Attorney General Letitia James is spearheading a $250 million lawsuit against former President Donald Trump. The outcome of the trial could have a substantial impact on both Trump’s wealth and the future of his real estate holdings.
Trump, his sons Eric Trump and Donald Trump Jr. and other executives from The Trump Organization are accused of engaging in a decade-long scheme involving “numerous acts of fraud and misrepresentation” to inflate the former president’s net worth for more favorable loan terms. Trump denied the allegations, and his lawyers contend that any inflated valuations are a result of his business skill.
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David McArdle, a real estate executive from Cushman & Wakefield, testified about his professional interactions with Eric Trump. Hired to appraise the value of 71 undeveloped residential units at the Trump National Golf Club in Westchester County, New York, McArdle conducted multiple appraisals for conservation easements at the property in 2014 and 2015. His appraisals valued the units between $43 million and $45.2 million. Despite these appraisals, Trump’s financial statements from the same years valued the land at $101 million. The New York attorney general stated in her complaint that “based on the supporting data, the only source for the increase in the number of units and profit per unit were telephone conversations with Eric Trump.”
James had strong words regarding the former president’s actions, stating that while Trump could “rant and rave” all he wanted, it would not change the fact that he “built his empire on lies.” She went on to say, “Mr. Trump may lie, but numbers don’t lie. Mr. Trump’s entire empire is built on nothing but lies. Sinking sand.”
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In court, McArdle contradicted Eric Trump’s claim that he didn’t recall working on the appraisals. When state attorney Sherief Gaber asked, “Do you believe that Eric Trump was not involved in the appraisals you worked on?” McArdle responded, “No.”
Judge Arthur Engoron decided in a pretrial hearing that there was “conclusive evidence” that Trump overvalued his assets between $812 million and $2.2 billion. This led to the cancelation of The Trump Organization’s business certificates in New York, which restricted Trump’s ability to conduct business in the state.
Adding further complexity to the case, Ladder Capital executive Jack Weisselberg testified that he partially relied on Trump’s financial statements while working on a $160 million loan for The Trump Organization. Weisselberg noted that Trump’s net worth was “one of many statements we were looking at in the underwriting process.”
As the trial continues, both parties await the court’s decisions on potential penalties and other actions included in the attorney general’s lawsuit. The findings could have broad implications for The Trump Organization and possibly affect the real estate industry’s valuation processes.
While the lawsuit against the former president alleges that his empire was built on “numerous acts of fraud and misrepresentation,” investing in startups or other legitimate ventures offers an alternative path to building wealth that is rooted in innovation, ethical business practices and real value creation.
For example, venture capital and angel investing focus on identifying early-stage companies with high growth potential. The objective is to provide the capital these companies need to scale their operations in return for equity. Unlike the complex valuations and alleged misrepresentations in the current lawsuit, startups typically go through rigorous due diligence processes that scrutinize every aspect of their business — from financials and technology to team competence and market potential. Transparency, accuracy and due diligence are paramount in these transactions.
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This article ‘Mr. Trump May Lie, But Numbers Don’t Lie’ — Attorney General Says Trump Can Rant And Rave All He Wants, But It Doesn’t Change That His Entire Empire Was Built On A Lie originally appeared on Benzinga.com
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