A new lawsuit filed in New York Wednesday alleges that former President Donald Trump claimed that the Trump International Hotel & Tower in Chicago “had become worthless” – apparently to claim a “substantial loss” for tax purposes, even as he used the property as collateral for future loans.
The Trump International Hotel & Tower in Chicago is mentioned prominently in the 222-page civil lawsuit filed today by New York Attorney General Letitia James.
The property is one of several where former President Donald Trump, his children, The Trump Organization, and his affiliated companies obtained loans under false pretenses by overinflating Trump’s personal wealth and company assets, according to prosecutors.
At the same time, the suit claims that Donald Trump claimed to tax authorities that the Trump International Hotel & Tower “had become worthless” after 2009, which – according to the suit -- allowed him to claim a “substantial loss” on the Chicago property for tax purposes – even as he proceeded to then use the building as collateral to obtain hundreds of millions of dollars of loans.
The suit details two loans Trump took out on the Chicago tower – one for the condominium part of the building, and the other for the hotel part of the building, which they say Trump obtained through the “Personal Wealth Management” (PWM) section of Deutsche Bank – negotiated, at least in part, by Trump’s daughter Ivanka.
According to the suit, Deutsche Bank’s PWM section offered significantly lower interest rates for Trump, than did the bank’s Commercial Real Estate (CRE) section. However, those PWM loans required that Trump personally guarantee the loans, based on financial statements he and his company provided to Deutsche, detailing Trump’s overall wealth, plus the amount of his money that was liquid. New York State’s contention is that the amounts of wealth claimed in those financial statements were vastly exaggerated, meaning the loans were acquired fraudulently.
In addition, on two occasions, Deutsche Bank amended one of the Chicago property’s loans to add millions of dollars on to the balance, according to the suit.
Local
In fact, the Chicago loans – as well as other loans described in the suit -- have clauses that say that if Trump misrepresented his financial condition, the bank could put the loans into default, according to the suit.
However, there is no such instance of default described in the lawsuit – even after Deutsche Bank reportedly began getting indications that Trump and his associates may have misrepresented his wealth, though Deutsche Bank eventually cut ties with Trump and his organization, after being repaid on all outstanding loans.
Feeling out of the loop? We'll catch you up on the Chicago news you need to know. Sign up for the weekly Chicago Catch-Up newsletter.
The fraud allegedly included the former president's compound at Mar-a-Lago in Florida, his controversial hotel in Washington D.C. and even his own triplex at Trump Tower in Manhattan - three examples of what the AG alleges were more than 200 instances of fraud over the course of 10 years. In one example, James said Trump overinflated the value of Mar-a-Lago almost 10-fold.
The AG's office is seeking about $250 million in penalties, to permanently bar Trump and his children from being officers of any New York-registered company, and to bar them from borrowing from any New York-registered financial institution for five years.
"We believe the conduct alleged in this action also violates federal criminal law," James said at the news conference, referencing the alleged filing of false financial statements, as well as purported bank fraud.
-Portions of reporting from NBC News were also used in this story.
