Filing seeks to protect state AG enforcement of fraud laws

Attorney General Dan Rayfield today led 17 states in defending a basic principle: fraud is against the law, no matter who commits it or how sophisticated the victim is.

Oregon filed a friend-of-the-court brief in the civil fraud case New York brought against Donald Trump and his business associates for inflating the values of assets to obtain better terms on loans and insurance policies. Trump and his fellow defendants are asking New York’s highest court to rule that the state had no business stepping in, because the banks they defrauded were big, sophisticated institutions that never complained. If that argument wins, it could make it harder for attorneys general across the country — including in Oregon — to go after fraud on behalf of the public.

“When someone misleads a bank to get a better deal, everyone else who plays by the rules pays for it — the competitor who told the truth, and the workers and depositors who count on that bank staying healthy,” said Attorney General Rayfield. “Being rich and well-connected doesn’t buy you a different set of rules. Our job is to protect the public, even when the party on the other side of the deal is a big bank who would rather sweep the fraud under the rug.”

Oregon law already gives the Attorney General tools to step in when charities or businesses are used to cheat or deceive — even when the people directly involved don’t take action themselves. Many other states have similar laws. The brief explains why those laws matter:

• Fraud hurts more than the people in the deal. It warps the marketplace and chips away at the idea that the rules apply to everyone.
• Cheaters get an unfair edge. A business that lies to get cheaper loans can undercut honest competitors, and consumers end up paying for it.
• When big institutions get hurt, regular people feel it. Fraud against a large bank puts its employees, depositors, and everyone who relies on it at risk.
• Sometimes no one else will act. Powerful players may have their own reasons for staying quiet, including their own enrichment. An attorney general’s job is to look out for the public, not just the self-interested parties at the table.

The case, People v. Trump, is before the New York Court of Appeals. New York Attorney General Letitia James brought it under a state law that authorizes her office to go after repeated or ongoing business fraud. The defendants are Donald Trump, Eric Trump, Allen Weisselberg, and Jeffrey McConney.

Oregon led the filing of this brief, joined by Arizona, California, Connecticut, Delaware, Hawaiʻi, Illinois, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Vermont, Virginia, and Washington.