NY seeks court oversight after Trump Org.’s concerning moves

Oct 13, 2022, 9:49 AM | Updated: 4:15 pm
FILE - New York Attorney General Letitia James speaks during a press conference on Sept. 21, 2022, ...

FILE - New York Attorney General Letitia James speaks during a press conference on Sept. 21, 2022, in New York. James has asked a judge Thursday, Oct. 13, to bar the Trump Organization from selling or transferring assets without court approval while a legal battle plays out over her fraud allegations against the former president’s company. (AP Photo/Brittainy Newman, File)

(AP Photo/Brittainy Newman, File)

NEW YORK (AP) — New York’s attorney general has asked a judge to bar Donald Trump’s company from selling or transferring assets without court approval, saying it had engaged in a devious attempt to duck potential penalties in her fraud lawsuit against the former president.

In court papers filed Thursday, Attorney General Letitia James’ office said that shortly before she filed the lawsuit last month, Trump’s company incorporated a new entity in Delaware named Trump Organization LLC — almost identical to the original company’s name.

On the day the lawsuit became public, the Trump Organization registered the new Delaware company in New York as “Trump Organization II LLC.”

“Beyond just the continuation of its prior fraud, the Trump Organization now appears to be taking steps to restructure its business to avoid existing responsibilities under New York law,” lawyers for the attorney general’s office said.

Manhattan Judge Arthur Engoron scheduled an Oct. 31 hearing on James’ request for an independent monitor to oversee the Trump Organization’s activities.

James’ office said it wants the case to go to trial in October 2023 — almost a year before the next presidential election. Trump has been laying groundwork for a potential comeback campaign.

Trump’s lawyer, Alina Habba, said the idea of court oversight “has no merit and is dead on arrival.”

“We have repeatedly provided assurance, in writing, that the Trump Organization has no intention of doing anything improper,” Habba said in a written statement. “This is simply another stunt which Ms. James hopes will aid her failing political campaign.”

James, a Democrat, is running for re-election as attorney general against a little-known Republican attorney from Queens, Michael Henry. Trump, a Republican, has repeatedly sparred with James and contends that her lawsuit is part of a politically motivated “witch hunt.”

In the lawsuit, filed last month, James’ office accused Trump of habitually misleading banks and others about how much assets like his golf courses and other real estate were worth. In the latest filing, James said the organization continued to use improper methods of creating valuations.

Trump’s attorney has asked that the case be transferred from Engoron, who has repeatedly ruled against Trump in related subpoena disputes, to the court’s Commercial Division, which is set up to handle complex corporate litigation.

In a letter Thursday to the court’s administrative judge, Habba asked for an expedited decision on her transfer request. Habba argued that Thursday’s filing was “an obvious attempt” by the attorney general’s office to get Engoron involved in the case before a decision is made.

The lawsuit also named his three eldest children, Donald Jr., Ivanka and Eric Trump, as defendants, along with two longtime Trump Organization executives.

In her motion for a preliminary injunction, James’ office said it had raised concerns with the Trump legal team about assets being moved out of state and that it asked for assurances that there would be no changes. If changes were to be made, James’ office said it wanted reasonable notice before hand.

Trump’s lawyers “did offer to provide assurances and advance notice,” James’ said, but “no concrete mechanism to either effectuate or enforce that offer.”

James’ office also disclosed that the former president and Eric Trump have yet to accept service of the lawsuit and sought permission to serve them electronically instead. A lawyer for the office, Colleen Faherty, noted that serving Trump with paper copies is “impracticable given the security measures taken for his protection as the former President of the United States.”

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NY seeks court oversight after Trump Org.’s concerning moves