Tenants Sue Trump Over Scheme That Drove Up Their Rents
Source: nytimes
The latest legal front against the outbound president involves a maneuver that earned him and his siblings millions while lowering their taxes.
Dec. 3, 2020, 5:13 p.m. ET
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.
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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.......................................
Read more: https://www.nytimes.com/2020/12/03/nyregion/trump-lawsuit-tenants.html?smid=tw-share
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The Shore Haven Apartments in Brooklyn is one of more than 30 complexes named in a lawsuit that accuses the Trumps of fraud.Credit...Dave Sanders for The New York Times
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