NY AG investigating whether Donald Trump inflated value of Seven Springs estate
ALBANY – New York's top legal officer is investigating whether President Donald Trump and his company improperly inflated the value of his Seven Springs estate in Westchester County and three other properties to get tax breaks and better terms on loans and insurance, according to new legal filings.
State Attorney General Letitia James filed a motion Monday seeking to compel the Trump Organization to comply with seven subpoenas at the center of a dispute, including one that would require Executive Vice President Eric Trump — the president's son — to testify under oath.
The motion lays out in detail the basis of James' ongoing investigation that was launched after former Trump Organization attorney Michael Cohen's March 2019 congressional testimony accused Trump of inflating his assets.
The probe focuses on four major Trump properties, including the 212-acre Seven Springs estate in northern Westchester, which Trump had been trying to develop for years before agreeing to a conservation easement in 2015.
According to the court documents, James' office is examining whether Trump and his company boosted the assessed value of the sprawling Westchester property, allowing one of his limited liability companies to claim a $21.1 million tax exemption on forms submitted to the IRS.
James' court filing claims the Trump Organization has turned over a number of documents related to the probe in compliance with subpoenas. But the two sides have reached an impasse on some issues, including whether Eric Trump will have to testify.
"They have stalled, withheld documents, and instructed witnesses, including Eric Trump, to refuse to answer questions under oath," James said in a statement Monday. "That’s why we've filed a motion to compel the Trump Organization to comply with our office’s lawful subpoenas for documents and testimony."
The Trump Organization issued a statement saying the company would "respond to this motion as appropriate."
"While we have tried to cooperate in good faith with the investigation at every turn, the NYAG’s continued harassment of the company as we approach the election (and filing of this motion on the first day of the Republican National Convention) once again confirms that this investigation is all about politics," the statement read.
Cohen testimony spurred AG investigation
James launched her investigation based on documents and testimony Cohen presented to Congress, in which he claimed Trump regularly inflated the value of his properties — and his net worth — in order to get better insurance and loan rates.
According to the court filing, the probe has zeroed in on Seven Springs and three other properties: 40 Wall Street in Manhattan, the Trump International Hotel and Tower Chicago and the Trump National Golf Club in Los Angeles.
Much of the court filings focus in on Seven Springs, the property that cuts through the Westchester towns of Bedford, North Castle and New Castle and includes two mansions, including a stone manor home with marble bathrooms that was once owned by ketchup giant H.J. Heinz.
Trump purchased the stately property for $7.5 million in 1995, trying and failing to develop portions of it into a golf course and luxury housing over the years.
By 2015, Trump agreed to a conservation easement at the property with the nonprofit North American Land Trust, in which Trump pledged not to develop 159 acres there. The easement is in effect for the life of the property, even if it changes hands.
The decision came with considerable tax benefits: A Trump-run LLC that owned the property was able to write down its taxes for the value of the donation.
James' court filings claim Eric Trump, on behalf of the Trump Organization, hired Cushman & Wakefield, Inc. earlier in the year to perform an appraisal of the property to determine the value of the tax benefit before the easement was signed Dec. 1, 2015.
The appraisal determined the value of the property was $56.5 million, allowing the Trump-run LLC to claim the easement was worth $21.1 million on its tax documents.
Court battle focused on subpoenas
James' filings make clear the attorney general's office has not yet determined whether any wrongdoing has occurred.
Instead, the court battle focuses on the status of seven subpoenas and whether the Trump Organization is within its rights to redact or withhold certain documents and information, as well as block Eric Trump and a land-use attorney involved in the Seven Springs deal from testifying.
"(Office of the Attorney General) has not concluded its investigation and has not reached a determination regarding whether the facts identified to date establish violations of law," the court filing reads.
The Trump Organization's statement characterized the legal filing as "a discovery dispute over documents and the like."
"The Trump Organization has done nothing wrong and, as the motion papers clearly state, the NYAG has made no determination that anything was improper or that any action is forthcoming," the statement reads.
A Democrat, James and her predecessors in the New York Attorney General's Office have frequently clashed with Trump, a Republican, filing dozens of lawsuits challenging federal actions.
In 2019, James took office and inherited a state lawsuit over the Trump Foundation, a charitable organization that shut down that year as part of a settlement with the state. (A state judge also ordered Trump to pay $2 million of his personal funds to charity as part of the settlement.)
Earlier this month, when James filed a lawsuit seeking to dissolve the National Rifle Association, Trump called it a "terrible thing" and advised the NRA to move its charter to another state, which is not allowed while the investigation is ongoing.
Includes reporting by Michael P. McKinney of The Journal News.
Jon Campbell is a New York state government reporter for the USA TODAY Network. He can be reached at JCAMPBELL1@Gannett.com or on Twitter at @JonCampbellGAN.
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