Trump’s Latest Legal Peril Threatens to Bring Down His New York Empire

Trump is now in his most dangerous legal situation. Wednesday’s civil lawsuit was filed by Letitia James, New York Attorney General, against Trump, his children, and his family for financial fraud. The suit claims they overvalued assets by billions to secure better financial arrangements. They then deflated the values to pay lower taxes. The lawsuit could result in the Trump Organization being barred from doing business in New York. “He’s gotten away with this for decades. Now he’s going to have to answer in civil court,” says award-winning reporter David Cay Johnston, who has covered Trump for years. A three-judge federal appels panel, which included two Trump appointed judges, allowed the Justice Department continued to review the documents seized by him. FBI from Trump’s Mar-a-Lago estate.

This is a rush transcript. Copy may not be final.

AMY GOODMAN: On Wednesday, former President Donald Trump was hit with two major legal setbacks. New York Attorney General Letitia James filed a civil lawsuit against Donald Trump, three of his adult children — Donald Jr., as well as Ivanka and Eric — and other executives at the Trump Organization, accusing them of widespread financial fraud. James accused the Trumps of inflating their business’s net worth by billions of dollars, while deceiving lenders, insurers and tax officials with false and misleading financial statements.

ATTORNEY GENERAL LETITIA JAMES: It is not the art of the deal to claim you have money you don’t have. It’s the art of the steal.

AMY GOODMAN: In a second legal setback for Trump, a three-judge panel of the 11th Circuit Court of Appeals ruled the Justice Department can resume its use of classified records seized at his Mar-a-Lago estate in its investigation of Trump’s mishandling of government documents. The judges, including two who were appointed by Trump, rejected key parts of an order by Federal District Judge Aileen Cannon that put the DOJ’s investigation on hold while a special master reviews the documents.

To talk about these two stories, we’re joined by the Pulitzer Prize-winning investigative reporter David Cay Johnston, who’s been covering Trump and writing books about him since the 1980s. He’s co-founder of DCReport and author of many books, including It’s Even Worse Than You Think: What the Trump Administration Is Doing to America.

David Cay Johnston, welcome to Democracy Now! So, let’s start with Letitia James. This civil suit against Donald Trump’s three adult children is significant.

DAVID CAY JOHNSTON: Well, Letitia James’s 220-page lawsuit identifies 200 acts of fraud. Trump overvalued real-estate he owned by 65 percent in some cases. Worse, for Trump, Donald often says, when something is amiss, “Well, I just did what the lawyers told me to do,” or “I did what the accountants told me to do.” James shows in her filing that Trump got an appraisal for one of his buildings in Manhattan of $200 million. He then valued the property at more than $500,000,000 and attributed the value to the appraisers in his financial statements. Real estate can have a wide range of values. You say your house is worth $300,000; the tax collector says it’s worth $350,000. But you’re not going to be able to assert that that house is worth $30,000 or $3,000. And that’s effectively what Donald was doing.

And what he got out of this, Amy, is, by inflating his net worth, he was able to borrow more money and borrow on better terms, which hurts all the rest of us because there’s not an unlimited amount of money out there to borrow. Then, he deflated the values for property taxes purposes to avoid paying the property tax he should’ve paid. So it was a double win for him, and he’s gotten away with this for decades. Now he’s going to have to answer in civil court.

AMY GOODMAN: So, talk about the significance of this, what he and his children face, and the fact that although this is civil, that could bring down his empire in New York, he’s also — Letitia James is referring this for criminal charges to the IRS Manhattan DA.

DAVID CAY JOHNSTON: Well, let’s do the civil side first. You and I, both natural persons, have the right to live. Corporations are artificial persons. They are state-created entities and exist only through the grace of the state and compliance with the law. She proposes to declare the Trump Organization and all its affiliate organizations, which are corporations, extinct. She wants the court ruling that he can’t serve on any board. He could still own property, but would have it registered in his name. This exposes him to all kinds of legal liability. He would not be able to borrow any money from any bank that is certified to be a bank in New York, which means if he wants to borrow money, he’d end up going to some little bank in the middle of Iowa. This would be a huge blow to his business. The same restrictions would apply his three older children as well as two of his former executives. And keep in mind that the New York State Attorney General’s Office, which only has civil authority, previously got the fake Trump University shut down and the Trump Foundation, which was a fraud, and collected damages, significant damages in those cases.

Now, on the criminal side, Letitia James’s office has been working with Alvin Bragg, the Manhattan district attorney, on his criminal case. Although he ended a criminal case for racketeering and was cleared of the charges, Bragg continued to examine Trump’s tax issues. And it’s very clear the civil complaint makes out what, if verified and found by a court to be true, are criminal actions, many criminal actions, by Trump, his children, the other executives and the companies themselves. She also referred it to the Southern District of New York as well to the federal prosecutors in Manhattan.

NERMEEN SHAIKH: David, could you also talk about the second legal setback that Trump has faced, a three-judge panel of the 11th Circuit Court of Appeals ruling that the Justice Department can resume its use of classified records seized at his Mar-a-Lago estate in its investigation of Trump’s mishandling of government documents? Talk about the significance and whether this could affect Trump’s ability to run for president in the future.

DAVID CAY JOHNSTON: Well, Donald Trump — Donald Trump’s Mar-a-Lago was the subject of a search warrant. Unarmed FBI agents in mufti, so that you didn’t know — they didn’t have jackets on saying ”FBI” — came, executed a search warrant. Trump then went to court, and a judge that he appointed wrote one of the most incoherent decisions by a judge I’ve ever read in my life. Aileen Clinton didn’t seem even to get the point. FBI is part the U.S. intelligence community and she banned the FBI The Justice Department was dissuaded from investigating, using these documents, whether Donald Trump had endangered American security, especially the identities of spies, cooperating agents, and other relevant information.

The Justice Department appealed this decision, and a three-judge panel on the 11th Circuit — two of the judges appointed by Donald Trump, one by Barack Obama — all agreed that this decision by the judge is nonsense. They basically slapped her around because she was an idiot. They also said that the Justice Department could return to these documents to assess the damage to American national security and pursue criminal cases.

This is very bad news indeed for Donald Trump. Trump has been informed by the government that they are investigating him for violating the Espionage Act. And, of course, there’s a fundamental question of: Where are the missing files that, according to the Justice Department, identify people who might be, for example, a high-level official inside of the Kremlin or Tehran or some other place, who are providing us with useful information? This is a very bad situation for Trump.

AMY GOODMAN: David Cay Johnston, thank you so much, Pulitzer Prize-winning investigative writer, co-founder, editor of DCReport.org.

Protests in Iran are on the rise after a 22 year-old woman was taken into police custody for wearing a hijab. Also later, we’ll speak with the deputy foreign minister of Cuba. Stay with us.