Updated September 21, 2022 at 1:53 PM ET
Following a three-year investigation, New York's Democratic Attorney General Letitia James filed a civil lawsuit on Wednesday against former President Donald Trump.
"The complaint demonstrates that Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself, to cheat the system," James said at a press conference.
In a statement posted on the Truth Social media site, Trump blasted the lawsuit as "another witch hunt" which he said was motivated by James' reelection bid.
"She is a fraud who campaigned on a 'get Trump' platform," Trump posted.
The lawsuit also targets members of Trump's longstanding executive team, including members of his family: Donald Trump Jr., Ivanka Trump and Eric Trump.
Responding to the suit, Donald Trump Jr. used an expletive on Twitter next to a video of James: "The bullshit Dem witch-hunt continues!" he wrote.
Posting on the Truth Social media site, Eric Trump also accused James of a partisan attack: "Letitia James is the most corrupt Attorney General in United States History — she campaigned on the promised to sue my father."
During her press conference, James acknowledged she would face criticism that her lawsuit is partisan. She noted her three-year investigation of Trump "only started after Michael Cohen, his former lawyer, testified before Congress about this conduct."
According to James, Trump's operation "repeatedly and consistently manipulated the value of assets" in order to win favorable loan terms from banks and to reduce tax payments.
"This conduct was all in violation of" New York state law, James said.
Suit would ban Trumps from doing business in N.Y.
James is seeking roughly $250 million in penalties and also seeks to ban Trump, his children and members of their executive team permanently from operating businesses in New York state.
The lawsuit also aims to bar the former president and his organization from buying commercial real estate in New York for five years.
This lawsuit is filed in civil court, but James also alleged that Trump's operation violated state and federal criminal laws. She said a criminal referral is being sent to the U.S. Justice Department.
"In short, he lied to gain massive financial benefits for himself," James said in a post on Twitter.
During the press conference, James noted that when testifying under oath during the investigation, Trump repeatedly invoked his 5th Amendment rights to avoid testifying.
She also said that prior to Wednesday's announcement, her office had rejected a settlement offer from Trump and his organization.
How Trump's alleged scheme worked
James detailed Trump business practices that she alleges were fraudulent, including "representing that Mr. Trump had cash on hand that he did not have," while also "egregiously" inflating the market value of his real estate holdings in New York state and in Florida.
The lawsuit cites one example involving Trump's property at 40 Wall Street in Manhattan.
Trump's team allegedly received repeated estimates of the property's value from professional appraisers ranging from $200 million to $220 million.
Then, according to the lawsuit, the Trump organization inflated the value of the property in statements to more than $500 million, in order to gain unfair advantages with lenders and insurers doing business with Trump's firm.
According to James, the behavior clearly represented fraud and was not done by mistake.
"The inflated asset valuations in the statements cannot be brushed aside or excused as merely the result of exaggeration," the lawsuit states. "Rather, they are the result of the defendants utilizing objectively false assumptions and blatantly improper methodologies."
Posting on Truth Social, Trump accused James of "fighting for very powerful and well represented banks and insurance companies, who were fully paid, made a lot of money, and never had a complaint about me..."
Trump also described James, who is Black, as "racist" and referred to her as "Peekaboo" James.
The lawsuit also targets Allen Weisselberg, who served as the Trump Organization's chief financial officer. Weisselberg's attorney Mary Mulligan declined NPR's request for comment.
The lawsuit announced Wednesday is only the latest in a long list of legal and financial troubles facing Trump, his organization and his family.
A separate criminal trial against Trump's firm and Weisselberg brought by Manhattan's district attorney is scheduled to begin next month.
As part of that proceeding, Weisselberg has pleaded guilty to numerous felonies and he is expected to testify.
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