Trump Organization Sued in “Invoice-Padding Scheme”
It’s been a rough few weeks for Donald Trump and his main adult children as investigations into his inauguration and the Trump Organization have resulted in depositions and lawsuits. While Trump is still busy trying to make it look like he won the election (and is failing miserably), there’s now yet another new lawsuit to add to the pile that’s probably just as tall as Trump Tower.
A group of tenants in a rent-regulated apartment building that the late Fred Trump Sr. owned is alleging that there has been a decade-long fraud committed against the residents to increase rents artificially through an “invoice-padding scheme.” At least 20 percent was added to the cost of materials for the apartments, their lawsuit alleges, and the Trump children and a cousin split the profits, estimated to be in the millions for each of them.
[Photo by JIM WATSON/AFP via Getty Images]
While the Trump siblings were still liable for income taxes, the maneuver allowed them to evade higher gift and estate taxes on part of the fortune they received from their father. 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. For example, if a new boiler cost $50,000, the Trumps would say it was $60,000 and collect the profit in a way that would hide the funds from New York laws.
The filing was submitted to the New York Supreme Court asking for the extra rent paid, plus interest and triple the damages. It would apply to “all current and former tenants in more than 30 apartment complexes. ”