Preview
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
EXHIBIT C
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
FILED: APPELLATE DIVISION - 1ST DEPT 04/26/2023 09:26 PM 2023-00717
NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 04/26/2023
To be argued by:
JUDITH N. VALE
15 minutes requested
Supreme Court of the State of New York
Appellate Division – First Department
No. 2023-00717
PEOPLE OF THE STATE OF NEW YORK, by LETITIA JAMES,
Attorney General of the State of New York,
Plaintiff-Respondent,
v.
DONALD J. TRUMP, et al.,
Defendants-Appellants.
BRIEF FOR RESPONDENT
LETITIA JAMES
Attorney General
State of New York
Attorney for Respondent
28 Liberty Street
JUDITH N. VALE New York, New York 10005
Deputy Solicitor General (212) 416-6073
DENNIS FAN daniel.magy@ag.ny.gov
Senior Assistant Solicitor General
DANIEL S. MAGY
Assistant Solicitor General
of Counsel Dated: April 26, 2023
Supreme Court, New York County – Index No. 452564/2022
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES .....................................................................iii
PRELIMINARY STATEMENT ................................................................. 1
QUESTIONS PRESENTED ..................................................................... 4
STATEMENT OF THE CASE .................................................................. 5
A. Statutory Background .............................................................. 5
B. Factual Background .................................................................. 7
1. The decade-long scheme to inflate Mr. Trump’s net
worth through his Statements of Financial Condition ....... 7
2. Ivanka Trump personally participated in the
fraudulent and illegal scheme ......................................... 14
C. Procedural Background .......................................................... 17
1. The investigation and special proceeding ....................... 17
2. Supreme Court’s preliminary injunction order............... 20
3. The decision below ........................................................... 21
ARGUMENT ........................................................................................... 23
POINT I
EXECUTIVE LAW § 63(12) AUTHORIZES OAG TO BRING THIS
ENFORCEMENT ACTION AGAINST REPEATED AND PERSISTENT
FRAUD AND ILLEGALITY ........................................................................ 23
POINT II
THIS ACTION IS TIMELY ........................................................................ 34
i
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
Page
A. Supreme Court Properly Applied a Six-Year
Limitations Period. ................................................................. 34
B. The Limitations Period Was Tolled for More Than
Two Years. ............................................................................... 37
1. COVID-19–related executive orders tolled the
statute of limitations. ...................................................... 39
2. The tolling agreement further extended the
applicable statute of limitations period. ......................... 41
C. The Continuing-Wrong Doctrine Also Applies. ...................... 46
POINT III
OAG’S COMPLAINT PLAUSIBLY ALLEGED IVANKA TRUMP’S
PERSONAL PARTICIPATION IN AND KNOWLEDGE OF DEFENDANTS’
FRAUDULENT AND ILLEGAL SCHEME ..................................................... 49
POINT IV
NEW YORK HAS PERSONAL JURISDICTION OVER VARIOUS TRUMP
ORGANIZATION ENTITIES THAT OPERATE FROM THE TRUMP
ORGANIZATION’S NEW YORK HEADQUARTERS ....................................... 58
CONCLUSION ........................................................................................ 63
ii
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
TABLE OF AUTHORITIES
Cases Page(s)
Abrahami v. UPC Construction Co.,
224 A.D.2d 231 (1st Dep’t 1996) ......................................................... 52
Alfred L. Snapp & Son, Inc. v. Puerto Rico,
458 U.S. 592 (1982) ............................................................................. 27
Brash v. Richards,
195 A.D.3d 582 (2d Dep’t 2021) .................................................... 40, 41
Brothers v. Florence,
95 N.Y.2d 290 (2000) .......................................................................... 36
Capruso v. Village of Kings Point,
23 N.Y.3d 631 (2014) .......................................................................... 47
Chen v. Dunkin’ Brands, Inc.,
954 F.3d 492 (2d Cir. 2020) ................................................................ 58
CWCapital Cobalt VR Ltd. v. CWCapital Invs. LLC,
195 A.D.3d 12 (1st Dep’t 2021) ........................................................... 48
D&R Global Selections, S.L. v. Bodega Olegario Falcon Pineiro,
29 N.Y.3d 292 (2017) .................................................................... 61, 62
Delgado v. State,
39 N.Y.3d 242 (2022) .......................................................................... 41
Deutsche Bank Sec., Inc. v. Montana Bd. of Invs.,
7 N.Y.3d 65 (2006) ........................................................................ 60, 61
Ehrlich-Bober & Co. v. University of Houston,
49 N.Y.2d 574 (1980) .......................................................................... 33
Eisenbach v. Metropolitan Transportation Authority,
62 N.Y.2d 973 (1984) .......................................................................... 41
Feinberg v. Marathon Patent Group Inc.,
193 A.D.3d 568 (1st Dep’t 2021) ......................................................... 51
iii
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
Cases Page(s)
Ford Motor Co. v. Montana Eighth Jud. Dist. Ct.,
141 S. Ct. 1017 (2021) ......................................................................... 62
Ganzi v. Ganzi,
183 A.D.3d 433 (1st Dep’t 2020) ......................................................... 49
Goshen v. Mutual Life Ins. Co. of N.Y.,
98 N.Y.2d 314 (2002) .......................................................................... 50
In re Cardizem CD Antitrust Litig.,
218 F.R.D. 508 (E.D. Mich. 2003) ....................................................... 32
Jensen v. General Elec. Co.,
82 N.Y.2d 77 (1993) ............................................................................ 47
Johnson v. Proskauer Rose, LLP,
2014 N.Y. Slip Op. 30262(U) (Sup. Ct. N.Y. County 2014) ................ 44
LaMarca v. Pak-Mor Mfg. Co.,
95 N.Y.2d 210 (2000) .................................................................... 60, 62
Marcal Fin. SA v. Middlegate Sec. Ltd.,
203 A.D.3d 467 (1st Dep’t 2022) ......................................................... 47
Matter of Gleason (Michael Vee, Ltd.),
96 N.Y.2d 117 (2001) .......................................................................... 37
Matter of James v. iFinex Inc.,
185 A.D.3d 22 (1st Dep’t 2020) ........................................................... 58
Matter of Larae L. (Heather L.),
202 A.D.3d 1454 (4th Dep’t 2022) ...................................................... 40
Matter of Lisa T. v. King E.T.,
30 N.Y.3d 548 (2017) .......................................................................... 24
Matter of People v. Cohen,
214 A.D.3d 421 (1st Dep’t 2023) ......................................................... 36
iv
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
Cases Page(s)
Matter of People v. JUUL Labs, Inc.,
212 A.D.3d 414 (1st Dep’t 2023) ........................6, 35, 36, 42, 44, 45, 48
Matter of People v. Leasing Expenses Co. LLC,
199 A.D.3d 521 (1st Dep’t 2021) ......................................................... 62
Matter of People v. MacDonald,
69 Misc. 2d 456 (Sup. Ct. N.Y. County 1972) ....................................... 6
Matter of People v. Northern Leasing Sys., Inc.,
193 A.D.3d 67 (1st Dep’t 2021) ..................................................... 28, 54
Matter of People v. Trump,
213 A.D.3d 503 (1st Dep’t 2023) ......................................................... 18
Matter of People v. Trump Entrepreneur Initiative LLC,
137 A.D.3d 409 (1st Dep’t 2016) ............................................. 25, 51, 53
Matter of People v. Trump Org., Inc.,
205 A.D.3d 625 (1st Dep’t 2022) ......................................................... 18
Matter of Part 60 Put-Back Litig.,
146 A.D.3d 566 (1st Dep’t 2017) ......................................................... 45
Matter of Roach v. Cornell Univ.,
207 A.D.3d 931 (3d Dep’t 2022) .......................................................... 40
Matter of State v. Ford Motor Co.,
74 N.Y.2d 495 (1989) .......................................................................... 26
Matter of World Trade Ctr. Lower Manhattan Disaster Site Litig.,
30 N.Y.3d 377 (2017) .......................................................................... 24
Melgar v. Melgar,
132 A.D.3d 1293 (4th Dep’t 2015) ...................................................... 42
Multibank, Inc. v. Access Global Capital LLC,
158 A.D.3d 458 (1st Dep’t 2018) ......................................................... 42
v
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
Cases Page(s)
Murphy v. Harris,
210 A.D.3d 410 (1st Dep’t 2022) ....................................... 18, 39, 40, 41
National Westminster Bank v. Weksel,
124 A.D.2d 144 (1st Dep’t 1987) ......................................................... 52
New York v. Debt Resolve, Inc.,
387 F. Supp. 3d 358 (S.D.N.Y. 2019) .................................................. 51
New York v. Feldman,
210 F. Supp. 2d 294 (S.D.N.Y. 2002) .............................................. 6, 29
Palmeri v. Willkie Farr & Gallagher LLP,
156 A.D.3d 564 (1st Dep’t 2017) ................................................... 47, 49
People v. Allen,
198 A.D.3d 531 (1st Dep’t 2021) ................................................... 36, 37
People v. American Motor Club,
179 A.D.2d 277 (1st Dep’t 1992) ........................................................... 5
People v. Apple Health & Sports Clubs,
80 N.Y.2d 803 (1992) .................................................................... 25, 50
People v. Bunge Corp.,
25 N.Y.2d 91 (1969) ............................................................................ 33
People v. Coventry First LLC,
13 N.Y.3d 108 (2009) .................................................................... 25, 33
People v. Coventry First LLC,
52 A.D.3d 345 (1st Dep’t 2008) ....................................................... 5, 33
People v. Credit Suisse Sec. (USA) LLC,
31 N.Y.3d 622 (2018) .................................................................... 25, 37
People v. Domino’s Pizza, Inc.,
2021 N.Y. Slip Op. 30015(U) (Sup. Ct. N.Y. County 2021) ................ 32
vi
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
Cases Page(s)
People v. Ernst & Young LLP,
114 A.D.3d 569 (1st Dep’t 2014) ......................................................... 31
People v. Exxon Mobil Corp.,
2019 N.Y. Slip Op. 51990(U) (Sup. Ct. N.Y. County 2019) ................ 32
People v. Grasso,
11 N.Y.3d 64 (2008) ............................................................................ 26
People v. Grasso,
42 A.D.3d 126 (1st Dep’t 2007) ........................................................... 26
People v. Grasso,
54 A.D.3d 180 (1st Dep’t 2008) ........................................................... 26
People v. Greenberg,
21 N.Y.3d 439 (2013) ............................................................... 29, 30, 48
People v. Greenberg,
95 A.D.3d 474 (1st Dep’t 2012) ..................................................... 53, 54
People v. Ingersoll,
58 N.Y. 1 (1874) .................................................................................. 32
People v. Katz,
84 A.D.2d 381 (1st Dep’t 1982) ........................................................... 51
People v. Lowe,
117 N.Y. 175 (1889) ............................................................................ 32
People v. Mendoza,
186 A.D.2d 458 (1st Dep’t 1992) ......................................................... 27
People v. Milman,
164 A.D.3d 609 (2d Dep’t 2018) .......................................................... 46
People v. Murray,
185 A.D.3d 1507 (4th Dep’t 2020) ...................................................... 57
vii
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
Cases Page(s)
People v. National Rifle Association of America, Inc.,
74 Misc. 3d 998 (Sup. Ct. N.Y. County 2022) ..................................... 31
People v. North Riv. Sugar Ref. Co.,
121 N.Y. 582 (1890) ............................................................................ 31
People v. Trump,
2022 N.Y. Slip Op. 33771(U) (Sup. Ct. N.Y. County 2022) .... 20, 21, 34
People v. Trump Org., Inc.,
2022 N.Y. Slip Op. 30538(U) (Sup. Ct. N.Y. County 2022) ................ 17
People v. Wells Fargo Ins. Servs., Inc.,
62 A.D.3d 404 (1st Dep’t 2009) ........................................................... 32
Pludeman v. Northern Leasing Sys., Inc.,
40 A.D.3d 366 (1st Dep’t 2007) ........................................................... 56
Polonetsky v. Better Homes Depot, Inc.,
97 N.Y.2d 46 (2001) ............................................................................ 50
Sabourin v. Chodos,
194 A.D.3d 660 (1st Dep’t 2021) ......................................................... 48
Schulte Roth & Zabel LLP v. Metropolitan 919 3rd Ave. LLC,
202 A.D.3d 641 (1st Dep’t 2022) ......................................................... 45
State v. 7040 Colonial Rd. Assoc. Co.,
176 Misc. 2d 367 (Sup. Ct. N.Y. County 1998) ................................... 48
State v. Cortelle Corp.,
38 N.Y.2d 83 (1975) ............................................................................ 25
State v. Wolowitz,
96 A.D.2d 47 (2d Dep’t 1983) .............................................................. 29
Town of Oyster Bay v. Lizza Indus., Inc.,
22 N.Y.3d 1024 (2013) ........................................................................ 47
viii
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
Cases Page(s)
Zumpano v. Quinn,
6 N.Y.3d 666 (2006) ............................................................................ 46
Laws
Ch. 184, 2019 McKinney’s N.Y. Laws 1082 ........................................ 6, 37
C.P.L.R.
213 ......................................................................................................... 6
302 ....................................................................................................... 60
Executive Law
§ 29-a ................................................................................................... 41
§ 63 .................................................................................. 5, 6, 24, 28, 29
Penal Law
§ 175.05 ............................................................................................... 57
§ 175.10 ............................................................................................... 57
§ 175.45 ............................................................................................... 57
§ 176.05 ............................................................................................... 57
Miscellaneous Authorities
Executive Order Nos. 202.8, 202.14, 202.28, 202.38, 202.48,
202.55, 202.55.1, 202.60, 202.67, 9 N.Y.C.R.R. §§ 8.202.8,
8.202.14, 8.202.28, 8.202.38, 8.202.48, 8.202.55, 8.202.55.1,
8.202.60, 8.202.67 (2020) .............................................................. 18, 39
Restatement (Second) of Contracts § 306
(Oct. 2022 update) (Westlaw) ....................................................... 45, 46
Senate Introducer’s Mem., in Bill Jacket for ch. 184 (2019) .................. 37
The Trump Story, Trump Org.,
https://www.trump.com/timeline ........................................................ 58
ix
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
PRELIMINARY STATEMENT
The New York State Office of the Attorney General (OAG) brought
this civil enforcement action under Executive Law § 63(12) against the
Trump Organization and certain of its executives. OAG’s 214-page
enforcement complaint provided detailed factual allegations describing
defendants’ decade-long scheme to misleadingly inflate the values of
various holdings and interests of defendant Donald J. Trump, as reflected
in his statements of financial condition (Statements). The assets whose
values were inflated included some of Mr. Trump’s signature properties:
his own triplex residence in Trump Tower, Trump Park Avenue, the 40
Wall Street office building, Mar-a-Lago, and numerous golf clubs. Defen-
dants then presented the false Statements to banks and insurers while
certifying that they were true and accurate. Through their scheme, defen-
dants derived significant economic benefits—such as favorable loan and
insurance terms—that they would not otherwise have obtained.
Here, defendants appeal from a decision and order of Supreme Court,
New York County (Engoron, J.) denying their motions to dismiss the
enforcement complaint. This Court should affirm. Many of defendants’
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
arguments have been rejected by the Court of Appeals or this Court. And
their other arguments are also meritless.
First, OAG has the authority to bring this action under § 63(12).
Section 63(12) gives OAG the capacity to maintain actions, like this one,
alleging that defendants committed repeated or persistent fraud or
illegality in conducting business. Through § 63(12), the Legislature has
empowered OAG to ensure that entities transacting business in New
York—including in New York City, one of the world’s most important
financial centers—do so without fraud or illegality, thereby maintaining
an honest marketplace. There is no basis in the statutory text for defen-
dants’ contention that OAG must show that the public or consumers at
large were harmed by their scheme. Nor is there any basis for defendants’
argument that OAG must satisfy the elements of parens patriae stand-
ing. That common-law doctrine has no bearing where, as here, OAG is
suing under § 63(12) to vindicate the State’s sovereign interests.
Second, OAG’s suit is timely. This Court has held that the six-year
limitations period governing claims under § 63(12) applies retroactively,
foreclosing defendants’ argument that a three-year period applies. The
complaint contains ample allegations that fall within this six-year period,
2
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
including those detailing Ivanka Trump’s involvement in the fraudulent
and misleading scheme. Although the six-year limitations period alone
suffices to render OAG’s complaint timely, more than two years of tolling
afforded by the Governor’s pandemic-related executive orders and by a
tolling agreement between OAG and the Trump Organization further
support Supreme Court’s decision. And the continuing-wrong doctrine
provides an additional ground for affirmance.
Third, OAG sufficiently alleged that Ivanka Trump personally
participated in defendants’ scheme. Among other things, Ivanka Trump
was an Executive Vice President of the Trump Organization who used
the Statements to obtain hundreds of millions of dollars in reduced-rate
loans to finance real-estate acquisitions. She was familiar with the true
financial performance of properties owned by Mr. Trump, and the State-
ments misrepresented the value of an apartment that she rented and had
the option buy. She also participated in communications with a federal
agency about specific accounting exceptions contained in the Statements.
And she oversaw the Trump Organization’s real-estate licensing deals, a
category of assets that was misleadingly valued in the Statements.
3
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
Finally, Supreme Court properly exercised personal jurisdiction over
the Trump Organization entities that operate out of the Trump Organiza-
tion’s New York headquarters and that purposefully availed themselves
of New York as a jurisdiction.
QUESTIONS PRESENTED
1. Whether Supreme Court correctly held that OAG has capacity
and standing to sue defendants for repeated and persistent fraudulent
and illegal conduct pursuant to Executive Law § 63(12), a statute that
expressly authorizes OAG to bring such claims.
2. Whether Supreme Court correctly held that OAG’s suit is timely.
3. Whether Supreme Court correctly held that OAG sufficiently
alleged that Ivanka Trump personally participated in or had knowledge
of the Trump Organization’s scheme.
4. Whether Supreme Court properly exercised personal jurisdiction
over various Trump Organization entities.
4
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
STATEMENT OF THE CASE
A. Statutory Background
The Legislature enacted Executive Law § 63(12) to combat fraud-
ulent and illegal commercial conduct in New York. Under § 63(12),
“[w]henever any person shall engage in repeated fraudulent or illegal
acts or otherwise demonstrate persistent fraud or illegality in the carry-
ing on, conducting or transaction of business, the attorney general may
apply, in the name of the people of the state of New York, to the supreme
court of the state of New York” for disgorgement and other equitable
relief. Executive Law § 63(12).
The broad nature of § 63(12) reflects the State’s manifest interest
in “securing an honest marketplace.” People v. Coventry First LLC, 52
A.D.3d 345, 346 (1st Dep’t 2008), aff’d, 13 N.Y.3d 108 (2009). The statute
defines “fraud” as “any device, scheme or artifice to defraud and any
deception, misrepresentation, concealment, suppression, false pretense,
false promise or unconscionable contractual provisions.” Executive Law
§ 63(12). The statute further prohibits persistent “illegality,” which
authorizes OAG to sue for violations of state, federal, or local laws. See,
e.g., People v. American Motor Club, 179 A.D.2d 277, 283 (1st Dep’t 1992).
5
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
Section 63(12) addresses repeated fraud or illegality in business
regardless of whether the misconduct targeted consumers, small busi-
nesses, large corporations, or other individuals or entities. See New York
v. Feldman, 210 F. Supp. 2d 294, 300 (S.D.N.Y. 2002) (courts have broadly
construed § 63(12) to apply to virtually “all business activity” (quotation
marks omitted)); Matter of People v. MacDonald, 69 Misc. 2d 456, 458
(Sup. Ct. N.Y. County 1972). “[R]epeated” fraud or illegality includes the
“repetition of any separate and distinct fraudulent or illegal act” and
“conduct which affects more than one person.” Executive Law § 63(12).
“[P]ersistent” fraud or illegality includes the “continuance or carrying on
of any fraudulent or illegal act or conduct.” Id.
The statute of limitations for § 63(12) actions is six years. C.P.L.R.
213(9). That six-year statute of limitations took effect immediately, when
the Legislature enacted it in 2019, Ch. 184, § 2, 2019 McKinney’s N.Y.
Laws 1082, 1082, and applies to conduct that predates its enactment,
Matter of People v. JUUL Labs, Inc., 212 A.D.3d 414, 416 (1st Dep’t 2023).
6
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
B. Factual Background
As alleged in OAG’s verified complaint, Mr. Trump controls and has
beneficial ownership of around 500 entities that do business as the Trump
Organization, which is headquartered in New York. Specifically, many
Trump Organization entities are organized under defendant Donald J.
Trump Revocable Trust (Trust), of which Mr. Trump is the sole beneficiary.
(R. 1192-1193; see R. 1397-1421 (organization chart).) In managing the
Trump Organization, Mr. Trump has relied on each of his three eldest
children—defendants Donald Trump Jr., Ivanka Trump, and Eric
Trump—to operate portions of the business as Executive Vice Presidents.
(R. 1193-1195.)
1. The decade-long scheme to inflate Mr. Trump’s net
worth through his Statements of Financial Condition
From at least 2011 through 2021, Mr. Trump’s annual Statements
were false and misleading. (R. 1180, 1185-1187; see R. 1395-1396 (overview
of deceptive strategies employed by defendants).) The Statements reflected
Mr. Trump’s supposed net worth based on inflated values of specific
assets and classes of assets, minus outstanding liabilities. (R. 1182-1183.)
7
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
Defendants’ scheme involved submitting (and certifying as true)
Mr. Trump’s false and misleading Statements in various commercial
transactions to banks and lenders, insurance companies, and other
entities to obtain significant financial benefits such as favorable loan or
insurance terms. (See R. 1326-1368.) For example, defendants used the
Statements to procure and maintain more than $300 million in loans
from Deutsche Bank for the development of the Doral golf resort in
Florida, a hotel in Chicago, and the redevelopment of the Old Post Office
building in Washington, D.C. (See R. 1327-1350.)
Mr. Trump personally guaranteed each of these loans (R. 1328-
1330), for which the guarantor’s “‘[f]inancial [s]trength’” or “‘financial
profile’” factored into the lending decision (R. 1333, 1339, 1343). As a
condition of each guaranty, defendants submitted the Statements from
the years prior to the loan closing and agreed to submit the Statements
annually thereafter, each of which was certified as being true. (See R. 1336-
1337 (Doral), 1340-1341 (Chicago), 1347-1349 (Old Post Office).) For the
Old Post Office loan, which was not disbursed at closing but rather on an
as-needed basis based on requests from the Trump Organization, the loan
8
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
required as a condition of each disbursement request that the Statements
were true and accurate at the time of the request. (R. 1347-1348.)
False certifications of the Statements were expressly identified as
events of default under the loan agreements. (R. 1336 (Doral), 1342
(Chicago), 1349-1350 (Old Post Office).) In 2020, in an effort to ensure
that it could collect on its loans, Deutsche Bank warned defendants that
false or inaccurate Statements could result in the loans being placed in
default and subject to immediate collection. (See R. 1373-1375.)
Defendants also used the Statements in transactions and dealings
with multiple insurance companies to procure favorable terms on insur-
ance products that benefitted defendants. (R. 1358-1368.) For example,
from 2007 through 2021, defendants used the Statements to secure favor-
able prices on surety bonds from Zurich North American. (R. 1358-1362.)
Allen Weisselberg (then-CFO of the Trump Organization and a defendant
here) misrepresented to Zurich that the asset values reflected in the
Statements were prepared by a professional appraisal firm—even though
they were not. He also failed to disclose that the values were falsely and
misleadingly inflated. (R. 1359-1361.) From 2016 through 2018, defen-
9
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
dants used the Statements to secure favorable premiums on directors and
officers insurance (D&O insurance). (R. 1362-1368; see R. 2188-2190.)
Defendants also used the Statements in several other commercial
dealings. For instance, in 2015, defendants used the Statements in
obtaining favorable loan terms in refinancing a mortgage for 40 Wall
Street from Ladder Capital Finance. (R. 1219-1220, 1350-1351.) From at
least 2011 through 2019, defendants used the false and misleading
Statements to obtain, extend, and maintain a prior mortgage from Royal
Bank America (later Bryn Mawr Bank). (R. 1353-1354.)
Despite the pervasive misstatements contained in the Statements,
several defendants certified the Statements’ accuracy when submitting
the Statements to financial institutions and other companies. Mr. Trump
certified the Statements from 2011 through 2015 as true and accurate.
(See R. 1336-1337, 1344; see also R. 1370-1371.) As a trustee of Mr. Trump’s
Trust, Donald Trump Jr. was responsible for the preparation of the
Statements for each year from 2016 until at least 2022. In his role as
trustee, he certified the truth and accuracy of each of the Statements in
2016 through 2019. (R. 1370.) Eric Trump certified the truth and accu-
10
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
racy of the Statements from 2020 through 2021 as attorney-in-fact for
Mr. Trump. (See R. 1336-1337, 1371.)
From 2004 until 2020, the accounting firm Mazars compiled the
Statements. (R. 1202.) In February 2022, in a letter to the Trump Organi-
zation, Mazars announced that the Statements for the years ending June
30, 2011 to June 30, 2020, should no longer be relied upon, and that all
recipients of the Statements should be notified of that status. (See R. 1187-
1188, 1204.) Several examples of the false and misleading asset values
reflected in the Statements follow.1
Trump Tower. From 2012 through 2016, the Statements valued
Mr. Trump’s personal triplex penthouse in Trump Tower in Manhattan
based on the false premise that it was around three times its actual size.
The Statements listed the apartment at 30,000 square feet, when property
records show that it was actually 10,996 square feet. These misrepre-
sentations inflated Mr. Trump’s assets by anywhere from $100 to $200
million each year. (R. 1254-1262.)
1The full scope of defendants’ fraudulent scheme to inflate the valu-
ations is laid out in detail in the complaint and further summarized in a
chart appended to the complaint as an exhibit. (R. 1395-1396.)
11
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
Trump Park Avenue. From 2011 through 2021, the Statements
valued rent-stabilized apartments at the Trump Park Avenue building in
Manhattan as if those units were not under rent-stabilization restrictions.
An independent appraisal in 2010 concluded that the unsold residential
units in the Trump Park Avenue building had a total market value of $55
million. (R. 1210.) The appraisal valued a block of twelve rent-stabilized
units at $750,000 total, noting that these units had less value because
the “‘current tenants cannot be forced to leave.’” (R. 1210.) Despite this
appraisal, the 2011 and 2012 Statements valued the unsold residential
units at $292 million, ignoring the status of the twelve rent-stabilized
units. (R. 1211.) Nor did the Statements in any subsequent year through
2021 properly value the rent-stabilized units based on their restricted
status. (R. 1211.)
40 Wall Street. From 2010 through 2021, the Statements included
valuations of the Trump Organization’s leasehold interest in the 40 Wall
Street office building in Manhattan that did not reflect the appraised
value of the property. For example, despite independent appraisals valu-
ing the property at approximately $200 million from 2010 through 2012,
the corresponding Statements valued the property at over $500 million.
12
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
And despite an appraisal valuing the property at $540 million in 2015,
that year’s Statement valued the property at over $735 million. (R. 1217,
1219-1222.) Those inflated values continued in subsequent years. (See
R. 1223-1226.)
Cash. From 2013 through 2021, the Statements claimed that
Mr. Trump had “cash” that did not belong to him. Mr. Trump has been a
30% limited partner in a partnership in which the general partner, not
Mr. Trump, has sole discretion over any cash distributions. (R. 1201, 1206-
1207.) Despite his lack of control over the partnership’s cash, the State-
ments for several years included 30% of the cash held by the partnership
as if it were “cash” belonging to, and under the control of, Mr. Trump.
(R. 1206-1208.) These misrepresentations inflated Mr. Trump’s assets by
$14 to $100 million each year. (R. 1205-1210.)
Club Facilities. From 2011 through 2021, the Statements included
numerous false and misleading valuations of Mr. Trump’s various club
facilities, which made up around one-third of the total value of his assets.
(See R. 1277-1323.) For instance, the Statements valued the Mar-a-Lago
property in Palm Beach, Florida at $350 to $750 million, based on the
false premise that it could be developed and sold in an unrestricted
13
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
manner as one or more private residences. But years earlier, Mr. Trump,
to obtain apparent tax benefits, had personally signed deeds that trans-
ferred to the National Trust for Historic Preservation the rights to develop
Mar-a-Lago for any usage other than a social club. (R. 1280-1284.)
Several Statements also valued Mr. Trump’s Aberdeen golf club
property in Scotland at $135 to $435 million, based on the false premise
that 2,500 homes could be constructed on the property, when in fact fewer
than 1,500 homes had been approved by the Scottish government. (R. 1289-
1290, 1293-1296.) And in numerous Statements, Mr. Trump added an
undisclosed 15% or 30% brand premium to the value of his golf courses,
even though the Statements expressly stated that the valuations did not
include a brand premium and generally accepted accounting principles
prohibit such premiums. (See, e.g., R. 1286, 1306-1307, 1310-1311.)
2. Ivanka Trump personally participated in the
fraudulent and illegal scheme
OAG’s complaint describes in detail how each defendant participated
in the fraudulent and illegal scheme. On appeal, no defendant except for
Ivanka Trump challenges the sufficiency of those allegations. Accordingly,
this subsection focuses on Ivanka Trump’s role in the scheme.
14
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
Like her siblings, Ivanka Trump was aware of, and knowingly
participated in, the scheme to inflate Mr. Trump’s net worth as reflected
in the Statements. (See R. 1368.) She took the lead in negotiations to
obtain the favorable loan terms from Deutsche Bank that included annual
submission and certification of the Statements. (See R. 1330-1337.) Like
Donald Trump Jr. and Eric Trump, Ivanka Trump was an Executive Vice
President of the Trump Organization who had familiarity with and
responsibility for the Statements. (R. 1370-1371.) She was also familiar
with the true financial condition of the value of Mr. Trump’s assets, based
on, among other things, her role in the company and updates she received
from the CFO, Allen Weisselberg, about the overall performance of the
Trump Organization—including the assets valued in the Statements.
(R. 1368-1371.)
During 2011 and 2012, Ivanka Trump led the Trump Organiza-
tion’s efforts to win the right to redevelop the Old Post Office property in
Washington, D.C. (R. 1344-1345.) The Statements were central to that
effort and submitted as part of the bid. (R. 1345.) As part of the process,
Ivanka Trump was involved in communications with a federal agency
about the contents of the Statements. Those communications included
15
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024
detailed discussions about whether the Statements conformed to generally
accepted accounting principles. (R. 1344-1345.)
Ivanka Trump was also the lead negotiator in obtaining the loans
from Deutsche Bank on favorable terms, which included the requirement
that the Statements be annually submitted and certified as true. (R. 1330-
1337.) She initiated the Trump Organization’s relationship with the
private-wealth-management group within Deutsche Bank, knowing that
a demonstration of financial condition would be required to obtain loans
from this group. (See R. 1328, 1330-1333.) For the loan used to purchase
the Doral golf club, she advocated for the loan to be conditioned on
Mr. Trump’s personal guaranty. (R. 1329, 1332.) When she received the
initial loan terms from the bank, including the terms regarding the
guaranty and annual submission and certification of the Statements, she
remarked that “[i]t doesn’t get better than this.” (R. 1329, 1331-1332.)
And she pushed back on concerns from Trump Organization counsel about
meeting the net worth requirements of $3 billion. (R. 1332.)
Ivanka Trump also handled the Trump Organization’s real-estate
licensing deals, the value of which was included and falsely inflated in
the Statements. (R. 1325.) For example, from 2015 to 2018, defendants
16
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/202
Preview
FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 EXHIBIT C FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 FILED: APPELLATE DIVISION - 1ST DEPT 04/26/2023 09:26 PM 2023-00717 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 04/26/2023 To be argued by: JUDITH N. VALE 15 minutes requested Supreme Court of the State of New York Appellate Division – First Department No. 2023-00717 PEOPLE OF THE STATE OF NEW YORK, by LETITIA JAMES, Attorney General of the State of New York, Plaintiff-Respondent, v. DONALD J. TRUMP, et al., Defendants-Appellants. BRIEF FOR RESPONDENT LETITIA JAMES Attorney General State of New York Attorney for Respondent 28 Liberty Street JUDITH N. VALE New York, New York 10005 Deputy Solicitor General (212) 416-6073 DENNIS FAN daniel.magy@ag.ny.gov Senior Assistant Solicitor General DANIEL S. MAGY Assistant Solicitor General of Counsel Dated: April 26, 2023 Supreme Court, New York County – Index No. 452564/2022 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 TABLE OF CONTENTS Page TABLE OF AUTHORITIES .....................................................................iii PRELIMINARY STATEMENT ................................................................. 1 QUESTIONS PRESENTED ..................................................................... 4 STATEMENT OF THE CASE .................................................................. 5 A. Statutory Background .............................................................. 5 B. Factual Background .................................................................. 7 1. The decade-long scheme to inflate Mr. Trump’s net worth through his Statements of Financial Condition ....... 7 2. Ivanka Trump personally participated in the fraudulent and illegal scheme ......................................... 14 C. Procedural Background .......................................................... 17 1. The investigation and special proceeding ....................... 17 2. Supreme Court’s preliminary injunction order............... 20 3. The decision below ........................................................... 21 ARGUMENT ........................................................................................... 23 POINT I EXECUTIVE LAW § 63(12) AUTHORIZES OAG TO BRING THIS ENFORCEMENT ACTION AGAINST REPEATED AND PERSISTENT FRAUD AND ILLEGALITY ........................................................................ 23 POINT II THIS ACTION IS TIMELY ........................................................................ 34 i FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 Page A. Supreme Court Properly Applied a Six-Year Limitations Period. ................................................................. 34 B. The Limitations Period Was Tolled for More Than Two Years. ............................................................................... 37 1. COVID-19–related executive orders tolled the statute of limitations. ...................................................... 39 2. The tolling agreement further extended the applicable statute of limitations period. ......................... 41 C. The Continuing-Wrong Doctrine Also Applies. ...................... 46 POINT III OAG’S COMPLAINT PLAUSIBLY ALLEGED IVANKA TRUMP’S PERSONAL PARTICIPATION IN AND KNOWLEDGE OF DEFENDANTS’ FRAUDULENT AND ILLEGAL SCHEME ..................................................... 49 POINT IV NEW YORK HAS PERSONAL JURISDICTION OVER VARIOUS TRUMP ORGANIZATION ENTITIES THAT OPERATE FROM THE TRUMP ORGANIZATION’S NEW YORK HEADQUARTERS ....................................... 58 CONCLUSION ........................................................................................ 63 ii FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 TABLE OF AUTHORITIES Cases Page(s) Abrahami v. UPC Construction Co., 224 A.D.2d 231 (1st Dep’t 1996) ......................................................... 52 Alfred L. Snapp & Son, Inc. v. Puerto Rico, 458 U.S. 592 (1982) ............................................................................. 27 Brash v. Richards, 195 A.D.3d 582 (2d Dep’t 2021) .................................................... 40, 41 Brothers v. Florence, 95 N.Y.2d 290 (2000) .......................................................................... 36 Capruso v. Village of Kings Point, 23 N.Y.3d 631 (2014) .......................................................................... 47 Chen v. Dunkin’ Brands, Inc., 954 F.3d 492 (2d Cir. 2020) ................................................................ 58 CWCapital Cobalt VR Ltd. v. CWCapital Invs. LLC, 195 A.D.3d 12 (1st Dep’t 2021) ........................................................... 48 D&R Global Selections, S.L. v. Bodega Olegario Falcon Pineiro, 29 N.Y.3d 292 (2017) .................................................................... 61, 62 Delgado v. State, 39 N.Y.3d 242 (2022) .......................................................................... 41 Deutsche Bank Sec., Inc. v. Montana Bd. of Invs., 7 N.Y.3d 65 (2006) ........................................................................ 60, 61 Ehrlich-Bober & Co. v. University of Houston, 49 N.Y.2d 574 (1980) .......................................................................... 33 Eisenbach v. Metropolitan Transportation Authority, 62 N.Y.2d 973 (1984) .......................................................................... 41 Feinberg v. Marathon Patent Group Inc., 193 A.D.3d 568 (1st Dep’t 2021) ......................................................... 51 iii FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 Cases Page(s) Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 141 S. Ct. 1017 (2021) ......................................................................... 62 Ganzi v. Ganzi, 183 A.D.3d 433 (1st Dep’t 2020) ......................................................... 49 Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314 (2002) .......................................................................... 50 In re Cardizem CD Antitrust Litig., 218 F.R.D. 508 (E.D. Mich. 2003) ....................................................... 32 Jensen v. General Elec. Co., 82 N.Y.2d 77 (1993) ............................................................................ 47 Johnson v. Proskauer Rose, LLP, 2014 N.Y. Slip Op. 30262(U) (Sup. Ct. N.Y. County 2014) ................ 44 LaMarca v. Pak-Mor Mfg. Co., 95 N.Y.2d 210 (2000) .................................................................... 60, 62 Marcal Fin. SA v. Middlegate Sec. Ltd., 203 A.D.3d 467 (1st Dep’t 2022) ......................................................... 47 Matter of Gleason (Michael Vee, Ltd.), 96 N.Y.2d 117 (2001) .......................................................................... 37 Matter of James v. iFinex Inc., 185 A.D.3d 22 (1st Dep’t 2020) ........................................................... 58 Matter of Larae L. (Heather L.), 202 A.D.3d 1454 (4th Dep’t 2022) ...................................................... 40 Matter of Lisa T. v. King E.T., 30 N.Y.3d 548 (2017) .......................................................................... 24 Matter of People v. Cohen, 214 A.D.3d 421 (1st Dep’t 2023) ......................................................... 36 iv FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 Cases Page(s) Matter of People v. JUUL Labs, Inc., 212 A.D.3d 414 (1st Dep’t 2023) ........................6, 35, 36, 42, 44, 45, 48 Matter of People v. Leasing Expenses Co. LLC, 199 A.D.3d 521 (1st Dep’t 2021) ......................................................... 62 Matter of People v. MacDonald, 69 Misc. 2d 456 (Sup. Ct. N.Y. County 1972) ....................................... 6 Matter of People v. Northern Leasing Sys., Inc., 193 A.D.3d 67 (1st Dep’t 2021) ..................................................... 28, 54 Matter of People v. Trump, 213 A.D.3d 503 (1st Dep’t 2023) ......................................................... 18 Matter of People v. Trump Entrepreneur Initiative LLC, 137 A.D.3d 409 (1st Dep’t 2016) ............................................. 25, 51, 53 Matter of People v. Trump Org., Inc., 205 A.D.3d 625 (1st Dep’t 2022) ......................................................... 18 Matter of Part 60 Put-Back Litig., 146 A.D.3d 566 (1st Dep’t 2017) ......................................................... 45 Matter of Roach v. Cornell Univ., 207 A.D.3d 931 (3d Dep’t 2022) .......................................................... 40 Matter of State v. Ford Motor Co., 74 N.Y.2d 495 (1989) .......................................................................... 26 Matter of World Trade Ctr. Lower Manhattan Disaster Site Litig., 30 N.Y.3d 377 (2017) .......................................................................... 24 Melgar v. Melgar, 132 A.D.3d 1293 (4th Dep’t 2015) ...................................................... 42 Multibank, Inc. v. Access Global Capital LLC, 158 A.D.3d 458 (1st Dep’t 2018) ......................................................... 42 v FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 Cases Page(s) Murphy v. Harris, 210 A.D.3d 410 (1st Dep’t 2022) ....................................... 18, 39, 40, 41 National Westminster Bank v. Weksel, 124 A.D.2d 144 (1st Dep’t 1987) ......................................................... 52 New York v. Debt Resolve, Inc., 387 F. Supp. 3d 358 (S.D.N.Y. 2019) .................................................. 51 New York v. Feldman, 210 F. Supp. 2d 294 (S.D.N.Y. 2002) .............................................. 6, 29 Palmeri v. Willkie Farr & Gallagher LLP, 156 A.D.3d 564 (1st Dep’t 2017) ................................................... 47, 49 People v. Allen, 198 A.D.3d 531 (1st Dep’t 2021) ................................................... 36, 37 People v. American Motor Club, 179 A.D.2d 277 (1st Dep’t 1992) ........................................................... 5 People v. Apple Health & Sports Clubs, 80 N.Y.2d 803 (1992) .................................................................... 25, 50 People v. Bunge Corp., 25 N.Y.2d 91 (1969) ............................................................................ 33 People v. Coventry First LLC, 13 N.Y.3d 108 (2009) .................................................................... 25, 33 People v. Coventry First LLC, 52 A.D.3d 345 (1st Dep’t 2008) ....................................................... 5, 33 People v. Credit Suisse Sec. (USA) LLC, 31 N.Y.3d 622 (2018) .................................................................... 25, 37 People v. Domino’s Pizza, Inc., 2021 N.Y. Slip Op. 30015(U) (Sup. Ct. N.Y. County 2021) ................ 32 vi FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 Cases Page(s) People v. Ernst & Young LLP, 114 A.D.3d 569 (1st Dep’t 2014) ......................................................... 31 People v. Exxon Mobil Corp., 2019 N.Y. Slip Op. 51990(U) (Sup. Ct. N.Y. County 2019) ................ 32 People v. Grasso, 11 N.Y.3d 64 (2008) ............................................................................ 26 People v. Grasso, 42 A.D.3d 126 (1st Dep’t 2007) ........................................................... 26 People v. Grasso, 54 A.D.3d 180 (1st Dep’t 2008) ........................................................... 26 People v. Greenberg, 21 N.Y.3d 439 (2013) ............................................................... 29, 30, 48 People v. Greenberg, 95 A.D.3d 474 (1st Dep’t 2012) ..................................................... 53, 54 People v. Ingersoll, 58 N.Y. 1 (1874) .................................................................................. 32 People v. Katz, 84 A.D.2d 381 (1st Dep’t 1982) ........................................................... 51 People v. Lowe, 117 N.Y. 175 (1889) ............................................................................ 32 People v. Mendoza, 186 A.D.2d 458 (1st Dep’t 1992) ......................................................... 27 People v. Milman, 164 A.D.3d 609 (2d Dep’t 2018) .......................................................... 46 People v. Murray, 185 A.D.3d 1507 (4th Dep’t 2020) ...................................................... 57 vii FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 Cases Page(s) People v. National Rifle Association of America, Inc., 74 Misc. 3d 998 (Sup. Ct. N.Y. County 2022) ..................................... 31 People v. North Riv. Sugar Ref. Co., 121 N.Y. 582 (1890) ............................................................................ 31 People v. Trump, 2022 N.Y. Slip Op. 33771(U) (Sup. Ct. N.Y. County 2022) .... 20, 21, 34 People v. Trump Org., Inc., 2022 N.Y. Slip Op. 30538(U) (Sup. Ct. N.Y. County 2022) ................ 17 People v. Wells Fargo Ins. Servs., Inc., 62 A.D.3d 404 (1st Dep’t 2009) ........................................................... 32 Pludeman v. Northern Leasing Sys., Inc., 40 A.D.3d 366 (1st Dep’t 2007) ........................................................... 56 Polonetsky v. Better Homes Depot, Inc., 97 N.Y.2d 46 (2001) ............................................................................ 50 Sabourin v. Chodos, 194 A.D.3d 660 (1st Dep’t 2021) ......................................................... 48 Schulte Roth & Zabel LLP v. Metropolitan 919 3rd Ave. LLC, 202 A.D.3d 641 (1st Dep’t 2022) ......................................................... 45 State v. 7040 Colonial Rd. Assoc. Co., 176 Misc. 2d 367 (Sup. Ct. N.Y. County 1998) ................................... 48 State v. Cortelle Corp., 38 N.Y.2d 83 (1975) ............................................................................ 25 State v. Wolowitz, 96 A.D.2d 47 (2d Dep’t 1983) .............................................................. 29 Town of Oyster Bay v. Lizza Indus., Inc., 22 N.Y.3d 1024 (2013) ........................................................................ 47 viii FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 Cases Page(s) Zumpano v. Quinn, 6 N.Y.3d 666 (2006) ............................................................................ 46 Laws Ch. 184, 2019 McKinney’s N.Y. Laws 1082 ........................................ 6, 37 C.P.L.R. 213 ......................................................................................................... 6 302 ....................................................................................................... 60 Executive Law § 29-a ................................................................................................... 41 § 63 .................................................................................. 5, 6, 24, 28, 29 Penal Law § 175.05 ............................................................................................... 57 § 175.10 ............................................................................................... 57 § 175.45 ............................................................................................... 57 § 176.05 ............................................................................................... 57 Miscellaneous Authorities Executive Order Nos. 202.8, 202.14, 202.28, 202.38, 202.48, 202.55, 202.55.1, 202.60, 202.67, 9 N.Y.C.R.R. §§ 8.202.8, 8.202.14, 8.202.28, 8.202.38, 8.202.48, 8.202.55, 8.202.55.1, 8.202.60, 8.202.67 (2020) .............................................................. 18, 39 Restatement (Second) of Contracts § 306 (Oct. 2022 update) (Westlaw) ....................................................... 45, 46 Senate Introducer’s Mem., in Bill Jacket for ch. 184 (2019) .................. 37 The Trump Story, Trump Org., https://www.trump.com/timeline ........................................................ 58 ix FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 PRELIMINARY STATEMENT The New York State Office of the Attorney General (OAG) brought this civil enforcement action under Executive Law § 63(12) against the Trump Organization and certain of its executives. OAG’s 214-page enforcement complaint provided detailed factual allegations describing defendants’ decade-long scheme to misleadingly inflate the values of various holdings and interests of defendant Donald J. Trump, as reflected in his statements of financial condition (Statements). The assets whose values were inflated included some of Mr. Trump’s signature properties: his own triplex residence in Trump Tower, Trump Park Avenue, the 40 Wall Street office building, Mar-a-Lago, and numerous golf clubs. Defen- dants then presented the false Statements to banks and insurers while certifying that they were true and accurate. Through their scheme, defen- dants derived significant economic benefits—such as favorable loan and insurance terms—that they would not otherwise have obtained. Here, defendants appeal from a decision and order of Supreme Court, New York County (Engoron, J.) denying their motions to dismiss the enforcement complaint. This Court should affirm. Many of defendants’ FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 arguments have been rejected by the Court of Appeals or this Court. And their other arguments are also meritless. First, OAG has the authority to bring this action under § 63(12). Section 63(12) gives OAG the capacity to maintain actions, like this one, alleging that defendants committed repeated or persistent fraud or illegality in conducting business. Through § 63(12), the Legislature has empowered OAG to ensure that entities transacting business in New York—including in New York City, one of the world’s most important financial centers—do so without fraud or illegality, thereby maintaining an honest marketplace. There is no basis in the statutory text for defen- dants’ contention that OAG must show that the public or consumers at large were harmed by their scheme. Nor is there any basis for defendants’ argument that OAG must satisfy the elements of parens patriae stand- ing. That common-law doctrine has no bearing where, as here, OAG is suing under § 63(12) to vindicate the State’s sovereign interests. Second, OAG’s suit is timely. This Court has held that the six-year limitations period governing claims under § 63(12) applies retroactively, foreclosing defendants’ argument that a three-year period applies. The complaint contains ample allegations that fall within this six-year period, 2 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 including those detailing Ivanka Trump’s involvement in the fraudulent and misleading scheme. Although the six-year limitations period alone suffices to render OAG’s complaint timely, more than two years of tolling afforded by the Governor’s pandemic-related executive orders and by a tolling agreement between OAG and the Trump Organization further support Supreme Court’s decision. And the continuing-wrong doctrine provides an additional ground for affirmance. Third, OAG sufficiently alleged that Ivanka Trump personally participated in defendants’ scheme. Among other things, Ivanka Trump was an Executive Vice President of the Trump Organization who used the Statements to obtain hundreds of millions of dollars in reduced-rate loans to finance real-estate acquisitions. She was familiar with the true financial performance of properties owned by Mr. Trump, and the State- ments misrepresented the value of an apartment that she rented and had the option buy. She also participated in communications with a federal agency about specific accounting exceptions contained in the Statements. And she oversaw the Trump Organization’s real-estate licensing deals, a category of assets that was misleadingly valued in the Statements. 3 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 Finally, Supreme Court properly exercised personal jurisdiction over the Trump Organization entities that operate out of the Trump Organiza- tion’s New York headquarters and that purposefully availed themselves of New York as a jurisdiction. QUESTIONS PRESENTED 1. Whether Supreme Court correctly held that OAG has capacity and standing to sue defendants for repeated and persistent fraudulent and illegal conduct pursuant to Executive Law § 63(12), a statute that expressly authorizes OAG to bring such claims. 2. Whether Supreme Court correctly held that OAG’s suit is timely. 3. Whether Supreme Court correctly held that OAG sufficiently alleged that Ivanka Trump personally participated in or had knowledge of the Trump Organization’s scheme. 4. Whether Supreme Court properly exercised personal jurisdiction over various Trump Organization entities. 4 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 STATEMENT OF THE CASE A. Statutory Background The Legislature enacted Executive Law § 63(12) to combat fraud- ulent and illegal commercial conduct in New York. Under § 63(12), “[w]henever any person shall engage in repeated fraudulent or illegal acts or otherwise demonstrate persistent fraud or illegality in the carry- ing on, conducting or transaction of business, the attorney general may apply, in the name of the people of the state of New York, to the supreme court of the state of New York” for disgorgement and other equitable relief. Executive Law § 63(12). The broad nature of § 63(12) reflects the State’s manifest interest in “securing an honest marketplace.” People v. Coventry First LLC, 52 A.D.3d 345, 346 (1st Dep’t 2008), aff’d, 13 N.Y.3d 108 (2009). The statute defines “fraud” as “any device, scheme or artifice to defraud and any deception, misrepresentation, concealment, suppression, false pretense, false promise or unconscionable contractual provisions.” Executive Law § 63(12). The statute further prohibits persistent “illegality,” which authorizes OAG to sue for violations of state, federal, or local laws. See, e.g., People v. American Motor Club, 179 A.D.2d 277, 283 (1st Dep’t 1992). 5 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 Section 63(12) addresses repeated fraud or illegality in business regardless of whether the misconduct targeted consumers, small busi- nesses, large corporations, or other individuals or entities. See New York v. Feldman, 210 F. Supp. 2d 294, 300 (S.D.N.Y. 2002) (courts have broadly construed § 63(12) to apply to virtually “all business activity” (quotation marks omitted)); Matter of People v. MacDonald, 69 Misc. 2d 456, 458 (Sup. Ct. N.Y. County 1972). “[R]epeated” fraud or illegality includes the “repetition of any separate and distinct fraudulent or illegal act” and “conduct which affects more than one person.” Executive Law § 63(12). “[P]ersistent” fraud or illegality includes the “continuance or carrying on of any fraudulent or illegal act or conduct.” Id. The statute of limitations for § 63(12) actions is six years. C.P.L.R. 213(9). That six-year statute of limitations took effect immediately, when the Legislature enacted it in 2019, Ch. 184, § 2, 2019 McKinney’s N.Y. Laws 1082, 1082, and applies to conduct that predates its enactment, Matter of People v. JUUL Labs, Inc., 212 A.D.3d 414, 416 (1st Dep’t 2023). 6 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 B. Factual Background As alleged in OAG’s verified complaint, Mr. Trump controls and has beneficial ownership of around 500 entities that do business as the Trump Organization, which is headquartered in New York. Specifically, many Trump Organization entities are organized under defendant Donald J. Trump Revocable Trust (Trust), of which Mr. Trump is the sole beneficiary. (R. 1192-1193; see R. 1397-1421 (organization chart).) In managing the Trump Organization, Mr. Trump has relied on each of his three eldest children—defendants Donald Trump Jr., Ivanka Trump, and Eric Trump—to operate portions of the business as Executive Vice Presidents. (R. 1193-1195.) 1. The decade-long scheme to inflate Mr. Trump’s net worth through his Statements of Financial Condition From at least 2011 through 2021, Mr. Trump’s annual Statements were false and misleading. (R. 1180, 1185-1187; see R. 1395-1396 (overview of deceptive strategies employed by defendants).) The Statements reflected Mr. Trump’s supposed net worth based on inflated values of specific assets and classes of assets, minus outstanding liabilities. (R. 1182-1183.) 7 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 Defendants’ scheme involved submitting (and certifying as true) Mr. Trump’s false and misleading Statements in various commercial transactions to banks and lenders, insurance companies, and other entities to obtain significant financial benefits such as favorable loan or insurance terms. (See R. 1326-1368.) For example, defendants used the Statements to procure and maintain more than $300 million in loans from Deutsche Bank for the development of the Doral golf resort in Florida, a hotel in Chicago, and the redevelopment of the Old Post Office building in Washington, D.C. (See R. 1327-1350.) Mr. Trump personally guaranteed each of these loans (R. 1328- 1330), for which the guarantor’s “‘[f]inancial [s]trength’” or “‘financial profile’” factored into the lending decision (R. 1333, 1339, 1343). As a condition of each guaranty, defendants submitted the Statements from the years prior to the loan closing and agreed to submit the Statements annually thereafter, each of which was certified as being true. (See R. 1336- 1337 (Doral), 1340-1341 (Chicago), 1347-1349 (Old Post Office).) For the Old Post Office loan, which was not disbursed at closing but rather on an as-needed basis based on requests from the Trump Organization, the loan 8 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 required as a condition of each disbursement request that the Statements were true and accurate at the time of the request. (R. 1347-1348.) False certifications of the Statements were expressly identified as events of default under the loan agreements. (R. 1336 (Doral), 1342 (Chicago), 1349-1350 (Old Post Office).) In 2020, in an effort to ensure that it could collect on its loans, Deutsche Bank warned defendants that false or inaccurate Statements could result in the loans being placed in default and subject to immediate collection. (See R. 1373-1375.) Defendants also used the Statements in transactions and dealings with multiple insurance companies to procure favorable terms on insur- ance products that benefitted defendants. (R. 1358-1368.) For example, from 2007 through 2021, defendants used the Statements to secure favor- able prices on surety bonds from Zurich North American. (R. 1358-1362.) Allen Weisselberg (then-CFO of the Trump Organization and a defendant here) misrepresented to Zurich that the asset values reflected in the Statements were prepared by a professional appraisal firm—even though they were not. He also failed to disclose that the values were falsely and misleadingly inflated. (R. 1359-1361.) From 2016 through 2018, defen- 9 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 dants used the Statements to secure favorable premiums on directors and officers insurance (D&O insurance). (R. 1362-1368; see R. 2188-2190.) Defendants also used the Statements in several other commercial dealings. For instance, in 2015, defendants used the Statements in obtaining favorable loan terms in refinancing a mortgage for 40 Wall Street from Ladder Capital Finance. (R. 1219-1220, 1350-1351.) From at least 2011 through 2019, defendants used the false and misleading Statements to obtain, extend, and maintain a prior mortgage from Royal Bank America (later Bryn Mawr Bank). (R. 1353-1354.) Despite the pervasive misstatements contained in the Statements, several defendants certified the Statements’ accuracy when submitting the Statements to financial institutions and other companies. Mr. Trump certified the Statements from 2011 through 2015 as true and accurate. (See R. 1336-1337, 1344; see also R. 1370-1371.) As a trustee of Mr. Trump’s Trust, Donald Trump Jr. was responsible for the preparation of the Statements for each year from 2016 until at least 2022. In his role as trustee, he certified the truth and accuracy of each of the Statements in 2016 through 2019. (R. 1370.) Eric Trump certified the truth and accu- 10 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 racy of the Statements from 2020 through 2021 as attorney-in-fact for Mr. Trump. (See R. 1336-1337, 1371.) From 2004 until 2020, the accounting firm Mazars compiled the Statements. (R. 1202.) In February 2022, in a letter to the Trump Organi- zation, Mazars announced that the Statements for the years ending June 30, 2011 to June 30, 2020, should no longer be relied upon, and that all recipients of the Statements should be notified of that status. (See R. 1187- 1188, 1204.) Several examples of the false and misleading asset values reflected in the Statements follow.1 Trump Tower. From 2012 through 2016, the Statements valued Mr. Trump’s personal triplex penthouse in Trump Tower in Manhattan based on the false premise that it was around three times its actual size. The Statements listed the apartment at 30,000 square feet, when property records show that it was actually 10,996 square feet. These misrepre- sentations inflated Mr. Trump’s assets by anywhere from $100 to $200 million each year. (R. 1254-1262.) 1The full scope of defendants’ fraudulent scheme to inflate the valu- ations is laid out in detail in the complaint and further summarized in a chart appended to the complaint as an exhibit. (R. 1395-1396.) 11 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 Trump Park Avenue. From 2011 through 2021, the Statements valued rent-stabilized apartments at the Trump Park Avenue building in Manhattan as if those units were not under rent-stabilization restrictions. An independent appraisal in 2010 concluded that the unsold residential units in the Trump Park Avenue building had a total market value of $55 million. (R. 1210.) The appraisal valued a block of twelve rent-stabilized units at $750,000 total, noting that these units had less value because the “‘current tenants cannot be forced to leave.’” (R. 1210.) Despite this appraisal, the 2011 and 2012 Statements valued the unsold residential units at $292 million, ignoring the status of the twelve rent-stabilized units. (R. 1211.) Nor did the Statements in any subsequent year through 2021 properly value the rent-stabilized units based on their restricted status. (R. 1211.) 40 Wall Street. From 2010 through 2021, the Statements included valuations of the Trump Organization’s leasehold interest in the 40 Wall Street office building in Manhattan that did not reflect the appraised value of the property. For example, despite independent appraisals valu- ing the property at approximately $200 million from 2010 through 2012, the corresponding Statements valued the property at over $500 million. 12 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 And despite an appraisal valuing the property at $540 million in 2015, that year’s Statement valued the property at over $735 million. (R. 1217, 1219-1222.) Those inflated values continued in subsequent years. (See R. 1223-1226.) Cash. From 2013 through 2021, the Statements claimed that Mr. Trump had “cash” that did not belong to him. Mr. Trump has been a 30% limited partner in a partnership in which the general partner, not Mr. Trump, has sole discretion over any cash distributions. (R. 1201, 1206- 1207.) Despite his lack of control over the partnership’s cash, the State- ments for several years included 30% of the cash held by the partnership as if it were “cash” belonging to, and under the control of, Mr. Trump. (R. 1206-1208.) These misrepresentations inflated Mr. Trump’s assets by $14 to $100 million each year. (R. 1205-1210.) Club Facilities. From 2011 through 2021, the Statements included numerous false and misleading valuations of Mr. Trump’s various club facilities, which made up around one-third of the total value of his assets. (See R. 1277-1323.) For instance, the Statements valued the Mar-a-Lago property in Palm Beach, Florida at $350 to $750 million, based on the false premise that it could be developed and sold in an unrestricted 13 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 manner as one or more private residences. But years earlier, Mr. Trump, to obtain apparent tax benefits, had personally signed deeds that trans- ferred to the National Trust for Historic Preservation the rights to develop Mar-a-Lago for any usage other than a social club. (R. 1280-1284.) Several Statements also valued Mr. Trump’s Aberdeen golf club property in Scotland at $135 to $435 million, based on the false premise that 2,500 homes could be constructed on the property, when in fact fewer than 1,500 homes had been approved by the Scottish government. (R. 1289- 1290, 1293-1296.) And in numerous Statements, Mr. Trump added an undisclosed 15% or 30% brand premium to the value of his golf courses, even though the Statements expressly stated that the valuations did not include a brand premium and generally accepted accounting principles prohibit such premiums. (See, e.g., R. 1286, 1306-1307, 1310-1311.) 2. Ivanka Trump personally participated in the fraudulent and illegal scheme OAG’s complaint describes in detail how each defendant participated in the fraudulent and illegal scheme. On appeal, no defendant except for Ivanka Trump challenges the sufficiency of those allegations. Accordingly, this subsection focuses on Ivanka Trump’s role in the scheme. 14 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 Like her siblings, Ivanka Trump was aware of, and knowingly participated in, the scheme to inflate Mr. Trump’s net worth as reflected in the Statements. (See R. 1368.) She took the lead in negotiations to obtain the favorable loan terms from Deutsche Bank that included annual submission and certification of the Statements. (See R. 1330-1337.) Like Donald Trump Jr. and Eric Trump, Ivanka Trump was an Executive Vice President of the Trump Organization who had familiarity with and responsibility for the Statements. (R. 1370-1371.) She was also familiar with the true financial condition of the value of Mr. Trump’s assets, based on, among other things, her role in the company and updates she received from the CFO, Allen Weisselberg, about the overall performance of the Trump Organization—including the assets valued in the Statements. (R. 1368-1371.) During 2011 and 2012, Ivanka Trump led the Trump Organiza- tion’s efforts to win the right to redevelop the Old Post Office property in Washington, D.C. (R. 1344-1345.) The Statements were central to that effort and submitted as part of the bid. (R. 1345.) As part of the process, Ivanka Trump was involved in communications with a federal agency about the contents of the Statements. Those communications included 15 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 856 RECEIVED NYSCEF: 03/15/2024 detailed discussions about whether the Statements conformed to generally accepted accounting principles. (R. 1344-1345.) Ivanka Trump was also the lead negotiator in obtaining the loans from Deutsche Bank on favorable terms, which included the requirement that the Statements be annually submitted and certified as true. (R. 1330- 1337.) She initiated the Trump Organization’s relationship with the private-wealth-management group within Deutsche Bank, knowing that a demonstration of financial condition would be required to obtain loans from this group. (See R. 1328, 1330-1333.) For the loan used to purchase the Doral golf club, she advocated for the loan to be conditioned on Mr. Trump’s personal guaranty. (R. 1329, 1332.) When she received the initial loan terms from the bank, including the terms regarding the guaranty and annual submission and certification of the Statements, she remarked that “[i]t doesn’t get better than this.” (R. 1329, 1331-1332.) And she pushed back on concerns from Trump Organization counsel about meeting the net worth requirements of $3 billion. (R. 1332.) Ivanka Trump also handled the Trump Organization’s real-estate licensing deals, the value of which was included and falsely inflated in the Statements. (R. 1325.) For example, from 2015 to 2018, defendants 16 FILED: NEW YORK COUNTY CLERK 03/15/2024 04:52 PM INDEX NO. 451549/202