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New York attorney general files civil lawsuit against Donald Trump and 3 of his kids

JUANA SUMMERS, HOST:

New York Attorney General Letitia James is alleging in a civil suit that Donald Trump and three of his adult children engaged in a decade's worth of fraud, inflating Trump's net worth by billions of dollars.

(SOUNDBITE OF ARCHIVED RECORDING)

LETITIA JAMES: Pattern of fraud and deception that was used by Mr. Trump and the Trump Organization for their own financial benefit is astounding, inflating the values of assets by whatever means necessary to increase Mr. Trump's purported net worth.

SUMMERS: James is seeking to permanently hobble Trump's ability to do business in New York, and she is asking for $250 million in damages. Joining us today to discuss that legal action is NPR's Andrea Bernstein. Hi, Andrea.

ANDREA BERNSTEIN, BYLINE: Hey, Juana. Great talking to you.

SUMMERS: You, too. OK. So what is James saying that Donald Trump and his adult children did?

BERNSTEIN: So the civil complaint, which runs to 222 pages, goes to the very heart of what makes Donald Trump Donald Trump. It contains over 200 examples of alleged fraud over the course of what the AG pointedly says is at least a decade. What's so striking about this action is that it describes persistent and repeated acts of fraud by the entire organization's top-top executives, all directed by Donald Trump. And it says he and his co-defendants misled his accountants, his bankers, his insurance companies and cheated the public - that he would repeatedly take official appraisals and then just make up a higher value. It says he did this with his commercial real estate, his residential real estate, his golf courses, dozens of different entities.

SUMMERS: OK, let's dig a little deeper here. Can you give us an example of exactly how this worked?

BERNSTEIN: Yeah. So here are two. According to the AG, Donald Trump overstated the square footage of his own apartment at Trump Tower in New York by a factor of three. The Trump Organization valued it at $327 million - at the time, the priciest apartment in Manhattan. And the AG heard testimony from Trump's former CFO that he knew it was off by a factor of 200 million. So here's a man who built this building. Obviously, Trump knows how big his penthouse is, but triples the size and uses that information to get favorable treatment from banks. Or take Mar-a-Lago. There are restrictions on how that property can be developed, which limit how much it's worth. The AG says 75 million. Trump says 739 million.

SUMMERS: OK, big difference there. You know, it seems like we speak often on this show about Trump's legal troubles. So help us put this into context. How big of a deal is this lawsuit?

BERNSTEIN: Big. So it's not a criminal case. No one can go to jail. But it's the culmination of a three-year investigation, and the devastating detail and persistence of the scheme outlined in the complaint alleges what is essentially a business model of fraud. Trump's business is currently a defendant in a criminal case in Manhattan. Trump has been sued literally thousands of times, including twice by the New York attorney general - once for fraud at his foundation, once for fraud at his so-called university - and he's had to pay tens of millions of dollars in penalties to New York. But those cases, compared to this one, were about branches of his organization. This case is about the trunk of the tree. The AG is seeking a huge amount of money - $250 million - and other remedies that would all but prevent Donald Trump and Ivanka, Eric and Don Jr. from doing business in New York.

SUMMERS: And we should just note here that Trump's lawyer says this case is without merit. Trump and his family are calling it, quote, "a witch hunt." So Andrea, what sort of defense do we expect here?

BERNSTEIN: So we won't know until we see Trump's legal papers. And as we've seen in the Mar-a-Lago classified document investigation, there is daylight between what Trump says at rallies or on Truth Social and what his lawyers say in court. But we do know this - New York State Supreme Court Judge Arthur Engoron has repeatedly rejected the witch hunt defense in rulings on this very investigation. Letitia James, a Democrat, did run for office saying she would investigate Trump. But the judge said her statements and political views are irrelevant. What matters are the facts and the law.

SUMMERS: OK. So this lawsuit has just been filed today, so tell us what happens next.

BERNSTEIN: So if past is prologue, the Trumps will draw it out. The case could settle, but it could go to trial. The AG has also referred the matter to the Justice Department and the IRS for possible criminal investigation. And the Manhattan DA, which chose not to indict Trump himself at a criminal juncture this year, says his criminal case is ongoing.

SUMMERS: All right. We're going to keep watching that. That is NPR's Andrea Bernstein. Keep following that for us. Thank you so much.

BERNSTEIN: Will do. Thanks, Juana. Transcript provided by NPR, Copyright NPR.