Donald Trump has been charged with racketeering in a proposed class action filed on behalf of over 14,000 present and former tenants of the Trump family’s one-time outer-borough empire.
The plaintiffs, who have resided in rent-regulated apartments previously owned by a web of corporate entities controlled by the Trumps across Brooklyn, Queens, and Staten Island, were granted leave on March 11, 2021, by a New York State Supreme Court in Brooklyn to proceed with charging Trump and his inner circle of engaging in racketeering activities and fraud under the Racketeering Influenced Corrupt Organizations Act, commonly known as “RICO”. The plaintiffs’ complaint alleges that the Trumps fraudulently inflated the costs of improvements to their properties to justify illegal rent increases under the Rent Stabilization Law. The increases were permanent, and allegedly compounded rent obligations for each successive tenant whose rent would then include both the fraudulent rent overcharges and all subsequent legal rent increases.
Jerrold S. Parker, a founding partner of Parker Waichman LLP, a nationwide law firm, explained that the Trump scam was revealed in the first installment of an exhaustive Pulitzer-Prize winning New York Times special investigation, “Trump Engaged in Suspect Tax Schemes as He Reaped Riches From His Father,” which debunked the former president’s claims of self-made wealth and revealed a business empire riddled with tax dodges. In a follow-up piece, “As the Trumps Dodged Taxes, Their Tenants Paid a Price,” The New York Times journalists interviewed housing advocates who insisted that the tenants’ claims “should be fought.” Mr. Parker answered that call to action.
“The reason the Trump family did this,” explained Parker, “was to lessen the impact of estate taxes from the transfer of the buildings once they passed from Fred Trump to his children.” Nevertheless, it was the tenants of the Trump-owned buildings that would suffer, and continue to suffer. “Today, the rents of these apartments are the fruit of a poisoned tree, as the financial burden from the fraudulent base rents are carried over, year after year, from tenant to tenant. It must be stopped. The rents must be rolled back, and those who are responsible must be made to re-pay the tenants for their outrageous activities.”
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