nj’s Logo

Trump’s golf courses in NJ were part of an alleged fraudulent scheme to inflate the value of billions of dollars, lawsuits

Donald Trump has long been known as a notorious cheater on the golf course.

And in the sweeping civil fraud lawsuit filed Wednesday against the former president and his family, New York Attorney General Letitia James accused Trump’s golf properties in New Jersey and elsewhere of being at the center of a long-running plan to make him appear to be much richer than he actually was.

“With the help of his children and senior executives at the Trump Organization, Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and cheat the system,” James said. “In fact, the very foundation of his alleged net worth is rooted in incredible fraud and illegality.”

The numbers game alleged by the attorney general’s office was not just aimed at restoring Trump’s billionaire image. It also gave him a financial advantage, investigators charged, including securing favorable loan terms. At the same time, the 214-page complaint accused the Trump Organization of understating the value of its assets at other times for tax purposes.

“This investigation revealed that Donald Trump engaged in years of unlawful conduct to inflate his net worth, to deceive banks and the people of the great state of New York,” James said at a press conference. “To say that you have money that you don’t is not the art of the transaction. It’s the art of theft.”

Trump’s golf properties span from Bedminster, Pine Hill in Camden County and Colts Neck, all in New Jersey, to Mar-a-Lago in Florida and clubs in New York, Los Angeles, Charlotte and in Scotland. The lawsuit claimed that Trump’s financial statements did not list separate values ​​for each of these facilities.

“Instead, the values ​​of these properties are aggregated into a single figure. This has been done intentionally to conceal significant fluctuations in the value assigned to individual clubs and to conceal the methods used to arrive at these values,” noted the court filing.”This lump sum was by far the largest asset value of Mr. Trump’s statement of financial position each year.”

James, a Democrat, is seeking to remove assets from the companies involved in the alleged fraud – which allegedly include Trump’s National Golf Clubs. She also wants an independent monitor appointed for at least five years to oversee the Trump Organization’s compliance, financial reporting, valuations and disclosures to lenders, insurers and tax authorities.

Trump, in a statement posted on his Truth Social platform, called the trial “another witch hunt by a racist attorney general” and called James, who is black, “a fraud who campaigned on a platform. -form “get Trump”, despite the city being one of the world’s crime and murder disasters under his watch!

Trump’s attorney, Alina Habba, said the lawsuit’s allegations were “without merit.”

In a statement, Habba said the trial “is neither fact-driven nor law-driven — rather, it is solely focused on advancing the Attorney General’s policy agenda.”

According to the lawsuit, Trump and the Trump Organization “used various deceptive schemes” to inflate their values.

Each year, according to the New York record, Trump has derived the value of the golf course based on his capital contributions since beginning his ownership adjusted by a “multiplier,” which is known as the equity approach. fixed assets and does not take into account any depreciation.

But using this approach to derive the market value of a golf course is contrary to industry practice, the lawsuit said. In fact, Trump himself admitted this to the IRS in 2012 when he sought to maximize the value of a conservation easement tied to his golf club in Bedminster.

These easements offer significant tax breaks in exchange for preserving open space.

The pool complex surrounded by overnight cottages and suites is near the 15th fairway of the Old Course at Trump National Golf Club. in Westminster.NJ Advance Media for NJ.com

The IRS sought to reduce the amount of Bedminster’s conservation easement. But Trump’s lawyer argued that the easement should be based on the revenue the golf course could generate and that was the relevant measure, telling the government “the price at which a golf course trades depends on the revenue that he can produce”.

At the same time, in an appraisal that the Trump Organization submitted to the IRS, it was stated that an income-based approach was the acceptable method for appraising a golf course.

However, this is not the approach the organization will later take when assessing golf courses for property tax assessment purposes to advocate for lower tax assessments.

At the Trump National Golf Club in Colts Neck, for example, the Trump Organization purchased the property in July 2008 for $28 million. According to the lawsuit, the company’s valuations of Colts Neck would later be inflated with false and misleading figures, including alleged clubhouse improvements and the alleged value of unsold memberships.

The Trump Organization has priced the vast majority of unsold memberships at two to more than three times the current $50,000 price of a membership, regardless of the considerable time it would take to sell those memberships.

“There was also no evidence to suggest that the prices and membership figures reflected in the supporting data were good faith projections of membership revenue,” the attorney general’s office said.

At the Trump National Golf Club in Pine Hill, NJ, the attorney general alleged that similar inaccuracies were used in the organization’s financial disclosure statements from 2011 through 2021.

The Trump Organization did not consider land rental fees when calculating property valuations. The assessments did not include rent payments required under the terms of the ground lease or take into account that the ground lease agreement required the landlord’s consent for Trump to transfer his leasehold interest to unrelated parties.

In addition, the Trump Organization also used the unsold membership program, the attorney general said. For example, in 2011, the initiation fee listed was only $10,000, but the company valued all unsold memberships at prices ranging between $15,000 and $35,000. And in 2012, unsold memberships were valued at prices ranging between $15,000 and $30,000.

“In fact, Trump Organization records showed that most membership fees were waived for new members,” the lawsuit said.

The Attorney General’s Office said the Trump Organization ignored the most basic financial reporting rules and standards, including claiming that Mr. Trump had cash on hand that he did not. ; ignoring critical restrictions that would significantly reduce the value of properties when setting appraisals; changing the methodology used to appraise properties from year to year, without reason or notice and using markedly different methods to appraise different properties even in the same year.

__

Our journalism needs your support. Please subscribe today to NJ.com.

Ted Sherman can be attached to tsherman@njadvancemedia.com. Follow him on Twitter @TedShermanSL.

Leave a Comment

Your email address will not be published.