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New York attorney general sues Trump, three kids, for alleged business fraud

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
Donald Trump, (R), sits with his children, from left, Eric Trump, Donald Trump Jr., and Ivanka Trump during a ceremony for the Trump International Hotel on July 23, 2014, in Washington. (Photo by AP)

New York's attorney general has sued Donald Trump, three of his adult children, and the Trump Organization, for falsely inflating his net worth by billions in order to enrich himself and secure favorable loans.

US Attorney General Letitia James filed her civil lawsuit in a New York state court in Manhattan on Wednesday.

She accused the Trump Organization of "numerous acts of fraud and misrepresentation" in preparing financial statements from 2011 to 2021.

James said Trump inflated his wealth by billions of dollars to help his company obtain favorable financial terms on transactions, including lower interest rates and cheaper insurance coverage.

“The statements of financial condition were greatly exaggerated, grossly inflated, objectively false, and therefore fraudulent and illegal,” James said at a Wednesday press conference.

“Claiming money that you do not have does not amount to the ‘Art of the Deal.’ It’s the Art of the Steal,” she added.

In her 214-page complaint, James also names Trump's adult children; Donald Trump Jr, Eric Trump and Ivanka Trump as defendants, as well as longtime company executives including former Chief Financial Officer Allen Weisselberg.

"This conduct was all in violation of" New York state law, she said.

James is seeking roughly $250 million in penalties and also seeks to ban Trump, his children and members of their executive team permanently from operating businesses in New York state.

Trump calls lawsuit 'another witch hunt'

Trump, in a statement posted on Truth Social, called the lawsuit "Another Witch Hunt by a racist Attorney General" who was pursuing the case for political gain.

In a separate statement, the Trump Organization also condemned the filing as “the culmination of nearly three years of persistent, targeted, unethical political harassment.”

The organization, which manages hotels, golf courses and other real estate around the world, had been under investigation by James for more than three years.

It said in a statement that the Attorney General was seeking “to protect the interests of large, sophisticated Wall Street banks.”

James acknowledged she would face criticism over the lawsuit, saying that her three-year investigation of Trump "only started after Michael Cohen, his former lawyer, testified before Congress about this conduct."

Trump's operation "repeatedly and consistently manipulated the value of assets" in order to win favorable loan terms from banks and to reduce tax payments, according to James.

James filed the lawsuit in civil court, but she also alleged that Trump's operation violated state and federal criminal laws. She said a criminal referral is being sent to the US Justice Department.

"In short, he lied to gain massive financial benefits for himself," James said in a post on Twitter.

She also said that prior to Wednesday's announcement, her office had rejected a settlement offer from Trump and his organization.

The lawsuit is only the latest in a long list of legal and financial troubles facing Trump, his organization and his family.

A separate criminal trial against Trump's firm brought by Manhattan's district attorney is scheduled to begin next month

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