Mary L. Trump, Donald Trump’s niece, has filed a lawsuit in New York State Court against the President, his sister Maryanne Trump Barry, and the executor of the estate of their late brother Robert Trump (in his or her capacity as executor). A copy of the filed lawsuit can be read and downloaded here, and CNN’s account is here: Mary Trump sues President and his siblings for fraud, calling it the family ‘way of life’.
Mary Trump’s Complaint
Mary alleges in the Complaint that: “For Donald J. Trump, his sister Maryanne, and their late brother Robert, fraud was not just the family business—it was a way of life.”
Mary further alleges that when Mary’s father Fred Trump, Jr. died, Mary inherited valuable minority interests in the family business, and that Donald, Maryanne, and Robert committed to watch over her interests as fiduciaries. Instead, Mary alleges that “they designed and carried out a complex scheme to siphon funds away from her interests, conceal their grift, and deceive her about the true value of what she had inherited.”
Mary continues to allege a complex scheme spanning decades to gain control of Fred Trump’s estate, including accusing Donald of attempting to procure a codicil to Trump’s will, and Maryanne eventually procuring a revised will that named the three Defendants as the executors of Fred Sr.’s estate.
Mary specifically alleges three fraudulent schemes were perpetrated against her— the “Grift”, the “Devaluing”, and the “Squeeze-Out.” She describes these three schemes as follows:
- The Grift: “Defendants fraudulently siphoned value from Mary’s interests to entities Defendants owned and controlled, while disguising those transfers as legitimate business transactions.
- The Devaluing: Defendants fraudulently depressed the value of Mary’s interests, and the net income they generated, in part through fraudulent appraisals and financial statements.
- The Squeeze-Out: Following Fred Sr.’s death, Defendants forced Mary to the negotiating table by threatening to bankrupt Mary’s interests and by canceling the healthcare policy that was keeping Fred III’s infant son alive, and once at the table Defendants presented Mary with a stack of fraudulent valuations and financial statements, and a written agreement that itself memorialized their fraud, and obtained her signature.
Mary asserts eight causes of action in her Complaint:
1. Fraudulent misrepresentation;
2. Fraudulent concealment;
3. Fraudulent inducement;
4. Negligent misrepresentation;
5. Civil conspiracy to commit fraudulent misrepresentation and concealment;
6. Civil conspiracy to commit fraudulent inducement;
7. Breach of fiduciary duty; and
8. Aiding and abetting a breach of fiduciary duty.
The conduct complained of was alleged to have occurred between 1981 and 2001.
The Alleged Trust And Estate Interests
Included in the interests Mary claims to have are “The Trust and Estate Interests.” These interests include an irrevocable trust established by Fred Sr., and interests as a beneficiary of Fred Sr.’s estate.
Mary alleges that Defendants were trustees of the irrevocable trust and co-executors of “the Last Will and Testament of Fred Sr. In each of these capacities, Defendants owed Mary a fiduciary duty of undivided loyalty, including a duty to protect her Interests.”
The Prior Probate Litigation Pursued By Mary Trump
Mary further alleges in her Complaint:
Third, as alleged above, Maryanne prepared and procured Fred Sr.’s revised 1991 Will after Fred Sr. refused to sign a codicil drafted by Durben that would have put Donald in control of Fred Sr.’s estate. Maryanne, along with Donald and Robert, appointed themselves co-executors of the 1991 Will. In addition, as alleged above, Robert procured Fred Sr.’s power of attorney in 1995, which enabled him to exercise powers over all aspects of Fred Sr.’s affairs and businesses, including respecting Mary’s Interests.
These allegations sound like classic will contest allegations. Indeed, after Fred Sr.’s death, Mary contested the validity of the 1991 Will, even though she was allegedly threatened by Robert to consent to its probate.
The probate litigation was settled via “Purported Agreements” which Mary now alleges were the product of fraud. Mary alleges that this fraud was concealed for many years, and began to come to light in October 2018 as the result of an investigative report done by The New York Times.
Breach of Fiduciary Claims
Two of Mary’s counts in the Complaint involve breach of fiduciary duty in Defendants’ roles as trustees, executors, and partners.
Mary Trump alleges that:
Defendants had a fiduciary duty to speak and inform Mary of their scheme to siphon away value from her, to devalue her Interests, to misrepresent their value in various financial documents, and to squeeze her out of her Interests. In addition, as fiduciaries, Defendants owed Mary duties of good faith, fair dealing, and full disclosure, and were not permitted to engage in transactions that created conflicts of interest.
Mary Trump’s breach of fiduciary claims against Donald Trump and the remaining Defendants seem partially dependent on the validity of her claims of fraud and conspiracy. Although the actions complained of occurred many, many years ago, fraud claims can sometimes be pursued years after the alleged fraud occurred because the fraud was not discovered until much later.
Time will tell which claims have survived any applicable statute of limitations. Perhaps the argument can be made that the substance of these allegations were known or at least knowable to Mary when they occurred between 1981 and 2001. In any event, the litigation will be closely followed by many until it is resolved.