Estate of late Flower Hill mayor sued by those accusing president of rent fraud

Estate of late Flower Hill mayor sued by those accusing president of rent fraud
John Walter, right, former mayor of Flower Hill, with then-State Sen. Elaine Phillips in 2016, has been named in a lawsuit alleging massive rent fraud. (Photo by Stephen Romano)

The late Flower Hill Mayor John Walter has been named in a case against his cousin,  President Donald Trump, as the Trump Organization faces a class-action lawsuit saying that tenants of over 14,000 apartments in Trump-owned buildings across New York City in the 1990s were overcharged on rent.

Walter, the son of Fred Trump Sr.’s sister Elizabeth Trump Walter and first cousin to the president, lived in Flower Hill’s Manhasset area for most of his life and served as mayor of the village from 1988 to 1996. He died in January 2018.

The case alleges a long-running scheme in which a Trump-controlled company, All County Building Supply, artificially increased the cost of appliances and other materials, which led to raised rents, stemming from claims first reported in a 2018 New York Times story.

Twenty plaintiffs are named, representing a class of victims who formerly were tenants of 30 of the Trump Organization’s rent-regulated buildings in Brooklyn, Queens and Staten Island in the 1990s. The buildings were sold in 2004, but the plaintiffs claim that the inflated rents persisted.

The suit was filed in New York State Supreme Court in Brooklyn, and the plaintiffs are represented by attorneys Jerrold S. Parker and Raymond Silverman of Port Washington-based Parker Waichman LLP.

“This is a massive fraud spanning 28 years, victimizing several hundred thousand tenants in Trump regulated apartments and needs to be addressed,” Parker said in a statement to The Washington Post. “These regulated tenants, many of whom struggle just to pay the rent and put food on the table, must be made whole for the money that was unlawfully and unknowingly taken from them by the Trump family for their own personal gain.”

Parker also told The Post that Trump and other defendants could owe “many millions” in compensation and damages.

A spokeswoman for the Trump family dismissed the lawsuit as “completely frivolous” to The Post.

“Not only are the allegations completely unsupported by any evidence, but they relate to events which go back nearly 30 years — yet were never once raised by anyone at any time only to be conveniently filed just one month before the 2020 Presidential election,” said Kimberly Benza, the family representative.

According to the Times story, Fred Trump Sr. worked with Walter to set up All County Building Supply & Maintenance in 1992, ostensibly to pay for maintenance crews and equipment for the properties owned by the Trump Organization around New York City, but in reality allowing him to give his children large cash gifts disguised as legitimate business transactions, thus evading a 55 percent tax.

Trump himself is estimated to have received at least $413 million, adjusted for inflation, from his father’s real estate empire over the years, according to The Times. Much of the money stemmed from the tax dodges, some conducted with Walter’s help, according to The Times.

The address listed for All County was that of Walter’s home at 511 Manhasset Woods Road in Manhasset. For his work generating the invoices, Walter received a cut of the markup and owned 20 percent of All County, which was split between him and the four Trump children, according to the Times report.

An investigation was undertaken into whether the president’s sister Maryanne Trump Barry, a senior judge of the United States Court of Appeals for the 3rd Circuit, had violated judicial rules by participating in a fraudulent tax scheme. But it closed in 2019 without reaching a conclusion, as she resigned from her post.

The former judge would tell her niece Mary L. Trump, a psychologist and daughter of Fred Trump Jr., that she suspected Walter of divulging information about the scheme to The  Times, when, according to her book “Too Much and Never Enough: How My Family Created the World’s Most Dangerous Man,” it was Mary herself who had informed the paper.

“In the interim, [Maryanne] had transferred her suspicion … to her first cousin John Walter … who had died that January,” Mary L. Trump wrote. “John had worked for and with my grandfather for decades, had benefited enormously from his uncle’s wealth, had been heavily involved in All-County, and, as far as I knew, had always been very loyal.”

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