The Trump Organization’s long-time appraiser inconsistently applied its internal quality-control practices when valuing properties for former President Donald Trump’s real estate business, a state judge said Wednesday.
The finding increases the scrutiny on Trump’s long-time appraiser and raises questions about the accuracy of its work as New York Attorney General Letitia James’ investigation into Trump’s businesses continues.
Judge Arthur Engoron made the finding as part of James’ effort to compel Cushman & Wakefield, the appraiser, to respond to its subpoenas. The subpoenas were issued in September 2021 and February 2022 as part of the attorney general’s civil investigation into the Trump Organization’s finances. Earlier this month, the attorney general’s office said its investigation had broadened to include Cushman and whether it “has engaged in fraudulent or misleading practices in its issuance of appraisals.”
In a three-page order, the judge said after reviewing numerous documents in private he found they indicate Cushman and Wakefield “was not consistent in adhering to its internal quality control practices when conducting appraisals on behalf of the Trump Organization. Accordingly, it is within OAG’s purview to investigate C&W’s appraisals to determine if C&W has appropriately and accurately disclosed to regulators and other governmental authorities whether its internal quality controls were followed.”
The judge denied Cushman’s motion to quash the subpoenas and ordered it to comply in full by May 27.
A representative for Cushman could not immediately be reached for comment.
Previously, a spokesman said, “Any suggestion that Cushman & Wakefield has not responded in good faith to the Attorney General’s investigation is fundamentally untrue” and “the Attorney General’s filings do not accurately depict Cushman & Wakefield’s responses to prior subpoenas and inquiries. We stand behind our appraisers and our work.”
James’ office has previously alleged there were multiple misstatements in the company’s financial statements. The findings are part of its ongoing civil investigation into the Trump Organization and whether it defrauded borrowers, lenders and tax authorities who relied upon those statements.
Cushman was the go-to appraiser for the Trump Organization, assisting it in valuing several properties, including the family compound known as Seven Springs, the Trump National Golf Club in Los Angeles and 40 Wall Street, according to court filings. The civil subpoenas are seeking Cushman’s work documents relating to those properties and others, information on payments to the Trump Organization and its decision to cease doing work for Trump in January 2021. In addition, authorities are seeking information about a Cushman appraiser who went to work for the Trump Organization.
Cushman regularly provided the Trump Organization with real estate data that the attorney general’s office said was ultimately used in the preparation of the financial statements. There were “hundreds” of instances when that data, according to the attorney general’s office, was cited “as support for the inflated valuations” included in Trump’s financial statements.
Lawyers for the attorney general’s office said Cushman failed to comply with a subpoena sent in February and it recently stopped producing documents in connection with the September subpoena. In addition, the attorney general’s office said Cushman instructed four of its employees not to answer questions during depositions, citing privileges.
The attorney general’s office notes that appraisals Cushman prepared for 40 Wall Street and were incorporated into two different commercial mortgage-backed securities differed in key ways from earlier appraisals. The rest of the information about those loans was redacted in the court filing.
Investigators said they’re looking to explore what was requested by Trump, “whether the appraisers were pushed by the client in any respect, and whether Cushman’s substantial business with the Trump Organization in any way impacted the appraisals prepared or other valuation-related information provided, or compromised Cushman’s objectivity.”
In a statement Thursday, the company disagreed with Engoron’s ruling and said it is evaluating its next steps.
“We fundamentally reject the Court’s suggestion that our appraisers used inconsistent internal quality control practices that had any impact on the appraised values of The Trump Organization properties,” a Cushman spokesperson said.
“Over the course of the last two years, we have cooperated in good faith with the Attorney General’s investigation. We have responded to four document subpoenas, eight testimony subpoenas and provided tens of thousands of documents at the Office of the Attorney General’s request. However, we feel the latest request from the Court, which seeks information on our work with hundreds of clients that have no connection whatsoever to the Trump Organization, is unreasonable and overly broad.”
This story has been updated with comment from Cushman & Wakefield.