President Trump will face a raft of potential legal challenges when he leaves office — from, among others, the Manhattan district attorney, the New York attorney general and perhaps the United States Justice Department.
Now add to that Leonie Green of the Westminster Apartments in Brooklyn.
Ms. Green is among a group of tenants in rent-regulated apartments once owned by Mr. Trump’s father who have filed a lawsuit against the president and his siblings, accusing the Trumps of a decade-long fraud to win artificially high rent increases through an invoice-padding scheme.
The scheme, first revealed in a 2018 investigation by The New York Times, involved tacking at least 20 percent onto the cost of materials purchased for the apartments, with Mr. Trump, his siblings and a cousin splitting the extra proceeds. The maneuver generated millions of dollars for each sibling, with no work required. While the siblings were still liable for income taxes, the maneuver allowed them to evade far-higher gift and estate taxes on part of the fortune they received from their father.
But the tenants paid a price. New York laws governing rent-regulated apartments allow owners to increase rents based on the costs of major capital improvements. The Trumps based their applications for rent hikes on the artificially increased invoices, so a boiler that actually cost $50,000 would generate a rent increase as if it had cost $60,000.
The new lawsuit, filed in State Supreme Court in Brooklyn, seeks the extra rent paid, plus interest and triple damages, for current and former tenants in more than 30 apartment complexes that belonged to the president’s father, 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 invoice-padding scheme ran 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’ lawyers win approval of class-action status, any potential judgment would encompass every person who paid rent in more than 14,000 rent-regulated apartments since 1992.
Ms. Green, 54, said she had moved into the Westminster Apartments, in the Ditmas Park neighborhood, 22 years ago. Paying the rent on her salary as an executive assistant has been a struggle, she said, and she has fought off several eviction actions after falling behind. She was shocked to learn that her difficulties might have been made worse by a rich family “stealing from me.”
“You try so hard, and to hear something like this, it breaks my heart, because I believe they are just taking advantage of poor people,” Ms. Green said.
The lawsuit was filed just before midnight on Oct. 2, moments before the expiration of the two-year statute of limitations for any fraud discovered through The Times’s 2018 investigation. An amended complaint was filed on Tuesday.
A spokeswoman for the Trump family described the lawsuit as “completely frivolous.”
“Not only are the allegations completely unsupported by any evidence, but they relate to events which go back nearly 30 years — yet were never once raised by anyone at any time only to be conveniently filed just one month before the 2020 presidential election,” the spokeswoman, Kimberly Benza, said in a statement.
Mr. Trump is already facing two New York investigations into his business activities and related tax issues — a criminal inquiry by the Manhattan district attorney, Cyrus Vance Jr., and a civil one by the state attorney general, Letitia James.
At least two significant civil lawsuits also remain active. The writer E. Jean Carroll claims that Mr. Trump defamed her in denying that he had raped her. And a class-action lawsuit asserts Mr. Trump’s promotion of a company that promised people they could get rich selling video conference phones led them to lose money peddling an obsolete product.
Mr. Trump could also face charges in matters not fully resolved during his presidency, including whether he obstructed justice in the Russia investigation or violated campaign finance laws in directing his lawyer, Michael D. Cohen, to make hush-money payments to two women who threatened to go public with their claims of past affairs with Mr. Trump.
Jerrold S. Parker, a founding partner of Parker Waichman, a national law firm based in Port Washington, N.Y., said his firm began considering a legal remedy for the tenants after the article in The Times. The firm sought tenants this year through television and internet advertisements. The amended complaint lists 20 plaintiffs.
“A massive fraud spanning 28 years, victimizing several hundred thousand tenants in Trump regulated apartments, needed to be addressed,” Mr. Parker said.
The tenants, he said, “must be made whole as a result of the money that was unlawfully and unknowingly taken from them by the Trump family for their own personal gain.”
In addition to the president, the defendants in the lawsuit 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 longtime employee of Fred Trump’s. Mr. Walter died in 2018.
The scheme began in 1992, after the Trumps realized that the family’s aging patriarch was sitting on mountains of cash that could face a 55 percent estate tax. Part of the solution came with the creation of a business they named All County Building Supply & Maintenance, which had no offices or employees and listed its address at Mr. Walter’s home on Long Island.
Little changed in how goods were purchased for the buildings. Fred Trump, who died in 1999, or one of his executives continued to negotiate prices, but for each purchase, Mr. Walter would generate an invoice showing that All County had bought the items, and a second invoice marked up 20 to 50 percent showing what All County had billed to Fred Trump’s properties. The siblings and Mr. Walter pocketed the difference.
Former prosecutors told The Times that filing padded invoices with state rent regulators could have led to criminal charges at the time, but that the statute of limitations had long since expired.
Mr. Trump’s federal income tax records for some of those years, which were revealed in an investigation published by The Times this September, show that he received $1.38 million from All County during the four years ending in 2003. Thanks to losses on his own endeavors, he paid federal income taxes in only one of those years, a total of $39,117 in 2003.
Ms. Barry filed a financial disclosure form for 1998 showing that she collected more than $1 million that year from All County. She retired last year as a federal appellate judge, ending an inquiry into complaints, spurred by The Times’s investigation, that she had violated judicial conduct rules by participating in fraudulent tax maneuvers, including the invoice-padding scheme.
The amended complaint filed this week notes that while Fred Trump’s empire was sold nearly two decades ago, the Trumps only dissolved All County shortly after the Times article was published in 2018.
One vendor from the All County years, 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 $100,000 check from All County.
“I didn’t recognize the company,” Mr. Eastmond said. “I didn’t know who the hell they were.”
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