Ivanka Trump freed from $250M fraud suit

New York state's $250 million fraud lawsuit against Donald Trump, his company and three of his children is still on track for a civil trial in October but now has one less defendant: Ivanka Trump.

The former president's daughter won dismissal from the suit on Tuesday when a state appeals court ruled that the claims against her were too old. The ruling may also require some older allegations to be narrowed against the remaining defendants — Trump's real estate company and two of his sons who serve as senior executives, Donald Trump Jr. and Eric Trump. 

The lawsuit was filed in September by New York Attorney General Letitia James, alleging that the Trumps manipulated financial statements for years to dupe banks and insurers into giving the Trump Organization better terms on deals. Tuesday's decision could affect claims related to transactions that took place before 2014, including financing deals for the Trump National Doral golf club in Miami and a Trump hotel in Chicago.

Andrew Harrer/Bloomberg

All the Trumps have denied wrongdoing. Trump lawyer Chris Kise called the ruling "the first step towards ending a case that should have never been filed."

"The correct application of the law will now limit appropriately the previously unlimited reach of the attorney general," Kise said in a statement. "Going forward, we remain confident that once all the real facts are known, there will be no doubt President Trump has built an extraordinarily successful business empire and has simply done nothing other than generate tremendous profits for those financial institutions involved in the transactions at issue in the litigation."

The ruling was a rare partial victory for the Trumps in a case in which the trial judge and appeals court have repeatedly ruled in favor of James — who has been a regular target for Trump, now the Republican presidential front-runner for 2024, at rallies and in social media posts. The decision, which partly reversed a lower court, said the allegations against Ivanka Trump "do not support" any claims that accrued after Feb. 6, 2016, and that therefore all the claims against her should have been dismissed as untimely. 

The appeals court affirmed most of the ruling backing the lawsuit.

Threat to Trump

The lower-court judge, Arthur Engoron, was ordered to revisit the claims against the remaining defendants to determine whether some of them are barred by a six-year statute of limitations, which was applied retroactively and extended as a result of the pandemic. 

Even so, the appeals court ruling ensures that one of the biggest legal threats to Trump and his company will remain as he campaigns for a return to the White House. In addition to James's civil litigation, the former president faces criminal cases in New York state court and federal court in Florida, as well as a probe in Georgia of his efforts to overturn the 2020 election. Trump has called all the cases and investigations baseless and part of an effort to hobble his candidacy.

"There is a mountain of evidence that shows Mr. Trump and the Trump Organization falsely and fraudulently valued multiple assets and misrepresented those values to financial institutions for significant economic gain. Those facts haven't changed," a spokesperson for James said in a statement. "This decision allows us to hold him accountable for that fraud, and we intend to do so."

Ivanka Trump's lawyers frequently set their client apart, writing a separate motion to dismiss her from the case. Her lawyer, Bennet Moskowitz, said in a March appeals brief that James had failed to show she manipulated her father's financial statements.

Statute of limitations

The complaint "focuses exclusively on allegations that Defendants fraudulently inflated the value of certain assets listed on the statements of financial condition of Ms. Trump's father," Moskowitz said in the filing. "The trial court simply ignored that the complaint does not allege any role for Ms. Trump in preparing, reviewing or submitting those statements."

The appeals court said the statute of limitations bars claims that relate to conduct before July 2014 or February 2016, depending on the defendant. The lawsuit alleges fraudulent conduct going back as far as 2011.

James sought to capture Ivanka Trump's conduct within the statute by pointing to two key actions she allegedly took while she was still at the Trump Organization. Those were a phone call on Feb. 11, 2016, seeking additional Deutsche Bank financing for Trump's Doral property — financing that never occurred — and a December 2016 draw request related to a loan for Trump's Old Post Office hotel in Washington. Lawyers for Ivanka Trump argued that the state had failed to allege that either act was fraudulent, thus keeping her beyond the statute of limitations.

Ivanka Trump was an executive vice president for development and acquisitions for the Trump Organization, according to the attorney general's complaint. Her responsibilities included negotiating and securing financing for properties and directing "all areas of the company's real estate and hotel management platforms," the AG said.

The appellate case is New York v. Trump, 2023-00717, New York State Supreme Court, Appellate Division, First Judicial Department (Manhattan).