Trump Village Rent Overcharge Scheme: Tenants Sued Over Decades of Fraudulently Inflated Rents at Fred Trump's Brooklyn Properties
Tier 3Litigation Filed1992-01-01 to 2020-12-04
Factual Summary
In December 2020, tenants of rent-regulated apartments in more than 30 buildings previously owned by the Trump family filed a class-action lawsuit in New York State Supreme Court in Brooklyn. The lawsuit alleged that Donald Trump, his siblings, and the Trump Organization had operated a scheme to fraudulently inflate rent increases for as many as 14,000 tenants over more than a decade.
The scheme, first uncovered by a 2018 Pulitzer Prize-winning investigation by the New York Times, centered on an entity called All County Building Supply and Maintenance. Created in 1992, All County had no office, no employees, and was registered to the home of Robert Trump's father-in-law on Long Island. The company served as a middleman for building supplies purchased for properties owned by Fred C. Trump in Brooklyn, Queens, and Staten Island, including the Trump Village complex in Coney Island.
Under New York rent stabilization law, landlords are permitted to pass the cost of building improvements through to tenants in the form of rent increases. The Times investigation found that All County would receive invoices for materials and appliances at the actual purchase price, then generate a second set of invoices marking up costs by 20 to 50 percent. These inflated invoices were submitted to state housing regulators as the basis for rent increases. Tenants in rent-stabilized apartments paid higher rents as a result, and the markup money flowed to members of the Trump family.
The New York Times reported that the All County scheme also served a second purpose: it functioned as a mechanism for Fred Trump to transfer wealth to his children while minimizing estate and gift taxes. By routing money through All County, the Trump family was able to distribute millions of dollars in a manner that obscured the transfers from tax authorities. The New York State Tax Department opened an investigation into the Times's findings.
The 2020 lawsuit sought restitution of excess rent paid, plus interest and triple damages under New York law. The properties at issue were sold by the Trump family in 2004 to an outside company, but the lawsuit alleged that the fraudulent rent increases had never been corrected and continued to compound in tenants' ongoing rent calculations.
Primary Sources
1. New York Times: "Trump Engaged in Suspect Tax Schemes as He Reaped Riches From His Father," October 2, 2018 (Pulitzer Prize-winning investigation)
2. Class-action complaint filed in New York State Supreme Court, Kings County, December 2020
3. New York rent stabilization regulations, New York City Rent Guidelines Board
Corroborating Sources
1. Washington Post: "Trump sued by New York apartment tenants alleging rent scheme," December 4, 2020
2. The Hill: "Tenants sue Trump over scheme that increased their rent," December 2020
3. The Real Deal: "Former Trump Tenants Seek Restitution for Rent Overcharges," December 4, 2020
4. YourLawyer.com: "Donald Trump, the Trump Family and Trump Organization Face Major Rent Overcharge Lawsuit," December 2020
Counterarguments and Context
The Trump Organization has not publicly acknowledged wrongdoing in connection with the All County scheme. The Trump family's position on the underlying tax matters was that the transactions complied with applicable law and that any questions about the estate planning arrangements have been resolved. The New York State Tax Department's investigation into the Times's findings has not resulted in publicly disclosed charges or settlements as of the date of this entry. It should be noted that Donald Trump was one of several Trump family members involved in the creation and operation of All County, and the scheme was initiated primarily by Fred Trump's generation. However, Donald Trump was a direct beneficiary of the inflated rents and the tax avoidance structure, and the 2020 lawsuit named him as a defendant. The case involves conduct spanning decades, and the legal proceedings remain ongoing.
Author's Note
This entry is classified as Tier 3 because the underlying scheme is documented through primary evidence, including the Pulitzer Prize-winning New York Times investigation, corporate records, invoices, and tax filings. The lawsuit provides the legal framework through which tenants sought redress, but no court has issued a final adjudication of the claims as of this writing.