Former President Donald Trump is facing his greatest legal peril yet, as New York Attorney General Letitia James filed a civil lawsuit Wednesday against Trump, three of his children and his family business for widespread financial fraud. The suit alleges they overvalued assets by billions of dollars in order to secure more favorable financial arrangements, then deflated those values to pay less in taxes. If the lawsuit is successful, the Trump Organization could be barred from conducting business in the state of New York. “He’s gotten away with this for decades. Now he’s going to have to answer in civil court,” says award-winning reporter David Cay Johnston, who has covered Trump for years. Also on Wednesday, a three-judge federal appeals panel, including two who were appointed by Trump, allowed the Justice Department to continue reviewing the documents seized by the FBI from Trump’s Mar-a-Lago estate.
AMY GOODMAN: Former President Donald Trump suffered two major legal setbacks Wednesday. New York Attorney General Letitia James filed a civil lawsuit against Donald Trump, three of his adult children — Donald Jr., as well as Ivanka and Eric — and other executives at the Trump Organization, accusing them of widespread financial fraud. James accused the Trumps of inflating their business’s net worth by billions of dollars, while deceiving lenders, insurers and tax officials with false and misleading financial statements.
ATTORNEY GENERAL LETITIA JAMES: Claiming you have money that you do not have does not amount to the art of the deal. It’s the art of the steal.
AMY GOODMAN: In a second legal setback for Trump, a three-judge panel of the 11th Circuit Court of Appeals ruled the Justice Department can resume its use of classified records seized at his Mar-a-Lago estate in its investigation of Trump’s mishandling of government documents. The judges, including two who were appointed by Trump, rejected key parts of an order by Federal District Judge Aileen Cannon that put the DOJ’s investigation on hold while a special master reviews the documents.
To talk about these two stories, we’re joined by the Pulitzer Prize-winning investigative reporter David Cay Johnston, who’s been covering Trump and writing books about him since the 1980s. He’s co-founder of DCReport and author of many books, including It’s Even Worse Than You Think: What the Trump Administration Is Doing to America.
David Cay Johnston, welcome back to Democracy Now! So, let’s start with Letitia James. Talk about the significance of this civil suit against Donald Trump and his three adult children.
DAVID CAY JOHNSTON: Well, Letitia James’s 220-page lawsuit identifies 200 acts of fraud. In some cases, Trump overvalued real estate he owned by 65 times. Worse, for Trump, Donald often says, when something is amiss, “Well, I just did what the lawyers told me to do,” or “I did what the accountants told me to do.” James shows in her filing that Trump got an appraisal for one of his buildings in Manhattan of $200 million. He then valued it at more than $500 million and, in his financial statement, attributed the value to the appraisers. You know, real estate can involve ranges. You say your house is worth $300,000; the tax collector says it’s worth $350,000. But you’re not going to be able to assert that that house is worth $30,000 or $3,000. And that’s effectively what Donald was doing.
And what he got out of this, Amy, is, by inflating his net worth, he was able to borrow more money and borrow on better terms, which hurts all the rest of us because there’s not an unlimited amount of money out there to borrow. And then, by deflating the values for property tax purposes, he avoided paying the amount of property tax he should have paid on those properties. So it was a double win for him, and he’s gotten away with this for decades. Now he’s going to have to answer in civil court.
AMY GOODMAN: So, talk about the significance of this, what he and his children face, and the fact that although this is civil, that could bring down his empire in New York, he’s also — Letitia James is referring this for criminal charges to the IRS and the Manhattan DA.
DAVID CAY JOHNSTON: Well, let’s do the civil side first. You and I, as natural persons, have a right to our life. Corporations are artificial persons. They are creatures of the state, and they exist only by the grace of the state and their compliance with the law. She is proposing that the Trump Organization and its affiliated organizations, these corporations, be put out of existence. She wants the court to rule that he may not serve on any board. So he could still own property, but he would have to own it directly in his own name, which exposes him to all sorts of legal liability. He would not be able to borrow any money from any bank that is certified to be a bank in New York, which means if he wants to borrow money, he’d end up going to some little bank in the middle of Iowa. All of this is just devastating to his business. And the same restrictions would apply to his three older children and two of his former executives. And keep in mind that the New York State Attorney General’s Office, which only has civil authority, previously got the fake Trump University shut down and the Trump Foundation, which was a fraud, and collected damages, significant damages in those cases.
Now, on the criminal side, Letitia James’s office has been working with Alvin Bragg, the Manhattan district attorney, on his criminal case. He killed a criminal case on racketeering, but Bragg has apparently continued to look into Trump in the area of taxes. And it’s very clear the civil complaint makes out what, if verified and found by a court to be true, are criminal actions, many criminal actions, by Trump, his children, the other executives and the companies themselves. She has also referred this to the Southern District of New York, the federal prosecutors in Manhattan and to the Internal Revenue Service.
NERMEEN SHAIKH: David, could you also talk about the second legal setback that Trump has faced, a three-judge panel of the 11th Circuit Court of Appeals ruling that the Justice Department can resume its use of classified records seized at his Mar-a-Lago estate in its investigation of Trump’s mishandling of government documents? Talk about the significance of that and whether you think, overall, this may disqualify Trump from running for president in the next election.
DAVID CAY JOHNSTON: Well, Donald Trump — Donald Trump’s Mar-a-Lago was the subject of a search warrant. Unarmed FBI agents in mufti, so that you didn’t know — they didn’t have jackets on saying ”FBI” — came, executed a search warrant. Trump then went to court, and a judge that he appointed wrote one of the most incoherent decisions by a judge I’ve ever read in my life. Aileen Cannon did not seem to even understand that the FBI is part of the intelligence community in the U.S. And she banned the FBI and the Justice Department from pursuing, with the use of these documents, whether Donald Trump had endangered American national security, particularly the identities of spies and cooperating agents.
The Justice Department appealed this decision, and a three-judge panel on the 11th Circuit — two of the judges appointed by Donald Trump, one by Barack Obama — all agreed that this decision by the judge is nonsense. I mean, they, in legal terms, slapped her around for being an idiot. And they said that, of course, the Justice Department may go back and continue to use these documents in an effort to assess how much damage has been done to American national security and pursue the criminal cases.
This is very, very bad for Donald Trump. The government has made clear that they are looking at Trump for violation of the Espionage Act. And, of course, there’s a fundamental question of: Where are the missing files that, according to the Justice Department, identify people who might be, for example, a high-level official inside of the Kremlin or Tehran or some other place, who are providing us with useful information? So, this is very bad for Trump.
AMY GOODMAN: David Cay Johnston, we want to thank you so much for being with us, Pulitzer Prize-winning investigative reporter, co-founder and editor of DCReport.org.
Coming up, protests are escalating in Iran after a 22-year-old woman died in police custody after being detained for allegedly improperly wearing a hijab. Also later, we’ll speak with the deputy foreign minister of Cuba. Stay with us.