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New York attorney general Letitia James filed a lawsuit against Donald Trump, his three children, and his organization on Wednesday for committing business fraud.

The civil suit was brought on the Trumps and the Trump Organization after a two-year-long investigation into the property values of Trump properties in New York.

James is accusing Trump and his business of committing fraud by 'grossly inflating' the value of properties, lying to lenders and insurances for more than a decade.

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The lawsuit seeks to remove Trump and his children from their roles in the Trump Organization and bar them from future leadership roles in New York.

Here's how the lawsuit came to be and what it means for Trump, his family, and his business.

What the lawsuit is

After Trump's former lawyer, Michael Cohen, testified under oath that Trump had inflated assets in financial statements in 2019, James opened up a civil investigation into the Trump Organization finances.

The civil suit comes as the Manhattan district attorney is also conducting a criminal suit.

“For too long, powerful, wealthy people in this country have operated as if the rules do not apply to them. Donald Trump stands out as among the most egregious examples of this misconduct,” said Attorney General James said in a statement.

What the lawsuit alleges

After three years of investigation through subpoenas and testimony, James' office is alleging that Trump, his children, Ivanka, Eric, Donald Jr., as well as senior management committed fraud to benefit themselves and the company financially.

Trump allegedly 'grossly inflated' property values

James says Trump and his organization 'grossly inflated' the value of several properties by billions of dollars by ignoring the advice of outside appraisers.

The New York Attorney General cited 40 Wall Street an as example. The building was initial appraised at $200 million but in Trump's annual financial statements he valued it over $500 million.

According to the lawsuit, there were more than 200 false and misleading asset evaluations in 11 of Trump’s annual financial statements.

Trump allegedly provided fraudulent financial statements to 'obtain beneficial financial terms'

James also alleges that the Trump organization gave bank lenders and insurances falsified statements to obtain lower interest rates and premiums.

As a result, Trump benefitted financially.

What the lawsuit means for Trump's business

James is seeking three things from the lawsuit.

1. To 'permanently' ban Trump and his three children from "serving as an officer or director in any New York corporation or similar business entity registered and/or licensed in New York state".

2. To bar Trump and his organization from acquiring any New York real estate for five years.

3. Force Trump and his business to give New York $250 million, the estimated amount that Trump obtained through the alleged fraudulent practices.

James' office also referred their findings to federal prosecutors in Manhattan in case they wanted to seek criminal charges.

How Trump has responded

Notoriously, Trump has been not compliant in the civil case.

The former president accused James of investigating the Trump Organization for political purposes only. In December of last year, Trump filed a lawsuit against James for violating his civil rights.

The lawsuit was dismissed by the US District Court in May. Trump appealed.

Earlier this year, during the civil suit investigation, Trump notoriously pled the 5th Amendment during his testimony.

Alina Habba, Trump's lawyer called the lawsuit “an abuse of authority” and said “we look forward to defending our client against each and every one of the attorney general’s meritless claims" according to the New York Times.

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