President Trump will face a series of potential legal challenges when he leaves office – from the Manhattan District Attorney, the New York Attorney General, and possibly the Justice Department, among others. United States.
Now add to that Leonie Green of the Westminster Apartments in Brooklyn.
Ms Green is among a group of rent-regulated apartment tenants formerly owned by Mr Trump’s father who have taken legal action against the president and his siblings, accusing the Trumps of a ten-year fraud to achieve artificially high rent increases through a bill filling system.
The scheme, first revealed in a 2018 New York Times investigation, involved receiving at least 20% of the cost of materials purchased for the apartments, with Mr. Trump, his siblings, and a cousin sharing the additional proceeds. . The maneuver generated millions of dollars for each brother, without any work. While the siblings were still subject to income tax, the maneuver allowed them to escape much higher gift and inheritance taxes on some of the wealth they received from their father.
But tenants have paid a price. New York’s rent-regulated apartment laws allow landlords to increase rents based on the costs of major capital improvements. The Assets based their rent increase demands on artificially increased bills, so that a boiler that actually costs $ 50,000 would generate a rent increase as if it cost $ 60,000.
The new lawsuit, filed in the Brooklyn State Supreme Court, targets the additional rent paid, plus interest and triple the damages, for current and former tenants in more than 30 apartment complexes that belonged to the father of the president, Fred C. Trump. The mostly austere red brick buildings – with names like Beach Haven, Shore Haven, and Park Briar – are spread across Brooklyn, Queens, and Staten Island. The bill-filling system worked from 1992 until the Trumps sold their father’s buildings in 2004, but the artificially increased rents remained in place.
The lawsuit could pose a significant financial threat to Mr. Trump and his family. If the plaintiffs’ attorneys get approval for class action status, any potential judgment would include everyone who has paid rent on more than 14,000 rent-regulated apartments since 1992.
Ms Green, 54, said she moved into Westminster Flats in the Ditmas Park area 22 years ago. Paying the rent out of her salary as an executive assistant was a struggle, she said, and she fought several eviction actions after falling behind schedule. She was shocked to learn that her difficulties could have been made worse by a wealthy family “stealing from me”.
“You try so hard, and to hear something like that, it breaks my heart, because I believe they are just taking advantage of the poor,” Ms. Green said.
The lawsuit was filed just before midnight on October 2, moments before the expiration of the two-year statute of limitations for any fraud discovered in the Times’ 2018 investigation. An amended complaint was filed Tuesday.
A spokeswoman for the Trump family called the trial “completely frivolous.”
“Not only are the allegations completely unsubstantiated by evidence, but they relate to events that date back almost 30 years – but which have never been raised once by anyone at any time to be conveniently filed just a month away. ahead of the 2020 presidential election, “spokeswoman Kimberly Benza said in a statement.
Mr. Trump is already facing two investigations in New York City into his business operations and related tax matters – a criminal investigation by Manhattan District Attorney Cyrus Vance Jr., and a civil investigation by the state attorney general, Letitia James.
At least two important civil lawsuits also remain active. Writer E. Jean Carroll claims Mr. Trump defamed her by denying he raped her. And a class action lawsuit claims that Mr. Trump’s promotion of a company that promised people to get rich by selling video conferencing phones caused them to lose money selling an obsolete product.
Mr Trump could also face charges in cases that were not fully resolved during his presidency, including whether he obstructed justice in the Russia probe or violated funding laws. campaign by ordering his lawyer, Michael D. Cohen, to make discreet payments to two women who threatened to go public with their claims about past affairs with Mr. Trump.
Jerrold S. Parker, founding partner of Parker Waichman, a national law firm based in Port Washington, NY, said his firm began considering legal recourse for tenants after the Times article. The company searched for tenants this year through television and Internet commercials. The amended complaint lists 20 complainants.
“A massive fraud spanning 28 years, of which several hundred thousand tenants in Trump-regulated apartments have fallen victim,” Parker said.
The tenants, he said, “must be reinstated with money illegally and unknowingly taken from them by the Trump family for their own benefit.”
Besides the president, the defendants in the trial are his sister Maryanne Trump Barry, a former federal judge, the estate of their brother Robert, who died this year, and the estate of John Walter, a favorite nephew and long-time employee of Fred Trump. . Mr. Walter died in 2018.
The ploy began in 1992, after the Trumps realized the family’s aging patriarch was sitting on mountains of cash that could face a 55% estate tax. Part of the solution came with setting up a company they called All County Building Supply & Maintenance, which had no offices or employees and listed its address at Mr. Walter’s home on Long Island. .
Not much has changed in the way goods were purchased for buildings. Fred Trump, who died in 1999, or one of his officers continued to negotiate prices, but for each purchase, Mr. Walter generated an invoice indicating that All County had purchased the items, and a second invoice marked 20 to 50 % showing what All County billed Fred Trump’s properties. The siblings and Mr. Walter pocketed the difference.
Former prosecutors told The Times that filing padded bills with state rent regulators could have resulted in criminal charges at the time, but the statute of limitations had long expired.
Mr. Trump’s federal tax records for some of those years, which came to light in an investigation published by The Times in September, show that he received $ 1.38 million from All County in the four years ending in 2003. Through losses on his own efforts, he paid federal taxes in just one of those years, totaling $ 39,117 in 2003.
Ms Barry filed a financial disclosure form for 1998 stating that she raised over $ 1 million that year from All County. She retired as a federal appellate judge last year, ending an investigation into the complaints, spurred by the Times investigation, that she violated rules of judicial conduct by participating in maneuvers tax fraud, including the invoice filling system.
The amended complaint filed this week notes that while Fred Trump’s empire was sold almost two decades ago, the Trumps did not disband All County until shortly after the Times article was published in 2018.
All County salesman Leon Eastmond once told The Times that he was surprised when, after selling 60 boilers to Fred Trump, he opened his mail to find a check for $ 100,000 from All County.
“I didn’t recognize the company,” Mr. Eastmond said. “I didn’t know who they were.”