A theme throughout New York Attorney General Letitia James’ multimillion-dollar fraud lawsuit against former President Donald Trump is that he undervalued a property if it would save him money. money and an overvalued property if it would help him get bigger loans.
The Trump International Hotel & Tower Chicago storefront is cited as an example of how Trump would have sought to have it both ways. When he needed collateral, he and his team placed a high value on the property and when he wanted tax relief, he called the property worthless, according to the lawsuit filed Wednesday by James’ office.
Once touted as a jewel in the Trump portfolio, the Chicago Trump Tower was, in fact, mired in dodgy funding for years.
The 220-page lawsuit said the downtown Chicago property, officially owned by 401 North Wabash Venture LLC, has been valued at $133 million in recent years by Deutsche Bank, which lent money to Trump for the project, but he gave a different story – saying it was worthless – when filing his taxes.
In an attempt to try to avoid detection, Trump and the Trump Organization intentionally did not include the skyscraper in its various statements of financial position so that it does not expose the different values it has. data to the property, the lawsuit said.
“Since 2009, its value has been excluded from statements of financial position,” which are essentially balance sheets reviewed by lenders and others that show assets and liabilities, the lawsuit said.
Based on sworn testimony, the reason for the omission was that “Trump did not want to take a position on the returns that would conflict with a position on the value of the property he represented to the tax authorities. “, said the lawsuit. “(The) investigation revealed that the tax position taken was that the property had become worthless in Mr. Trump’s view, and thus formed the basis of a substantial loss under the federal tax code.”
The Chicago hotel and residence are ‘relevant’ to the case filed by James’ office because ‘Mr. Trump and the Trump Organization obtained bank loans on the building or its components as security and the statements were part of it. of the loan transaction,” the lawsuit said.
Any use of different property values could put Trump in a difficult position given that he allegedly certified his statements of financial disclosure as true and accurate in several loan agreements, including in loans he personally guaranteed for the skyscraper. -sky on the bank of the Chicago River.
Among the loan transactions cited in the lawsuit was one in which the Trump Organization repaid a $98 million to $19 million loan with proceeds from the sale of condos at the Chicago property, but then successfully increased the Deutsche Bank loan from $54 million – to a $73 million loan – with Trump’s personal guarantee.
The warranty included, according to the lawsuit, “unsold condominium units and the Trump International Hotel Chicago.”
In 2015, according to the lawsuit, the Trump Organization paid back what it owed on a remaining loan balance of $45 million.
But since the property had been appraised at $133 million, that was to Trump’s advantage, as the appraisal triggered specific provisions in his loan agreement that meant “Mr. Trump’s personal guarantee was removed.” ”, according to the lawsuit.