Donald Trump Jr and Ivanka Trump took part in a fraudulent scheme to sell units in a luxury New York condominium-hotel and “knew they were lying”, according to a new book that explores how the current US president built his business empire.

Questions have long surrounded a criminal investigation into the Trump family’s dealings around the Trump SoHo that was dropped in 2011. Public disclosure of email correspondence revealed that Don Jr and Ivanka knowingly used figures that exaggerated how well the condos were selling in a ploy to lure more buyers.

The episode is re-examined with fresh reporting by the journalist Andrea Bernstein in her book American Oligarchs: The Kushners, The Trumps And The Marriage Of Money And Power, a copy of which was obtained by the Guardian.

Trump first previewed the 46-storey Trump SoHo in lower Manhattan with fanfare in 2006 on his reality TV show The Apprentice, boasting “this brilliant $370m work of art will be an awe-inspiring masterpiece”. But sales of units proved disappointing, especially after it was revealed one of Trump’s partners, Russian-born Felix Sater, had a criminal past.

According to data filed with state and federal agencies, only 15% to 30% had been sold by the start of 2009, the New York Times reported. But in June 2008, Ivanka told the Reuters news agency that 60% had been sold, while in April 2009, Don Jr claimed in the Real Deal magazine that 55% had.

Buyers of units in Trump SoHo sued Trump, arguing that they had been defrauded by inflated claims of sales. The Manhattan district attorney’s office then began investigating whether the allegations could also constitute a crime, issuing subpoenas and carrying out interviews.

The Trumps left a damaging email trail, first reported by the ProPublica website in 2017, that Bernstein writes “showed a coordinated, deliberate and knowing effort to deceive buyers. In one email, the Trumps discussed how to coordinate false information they had given to prospective buyers. Because the sales levels had been overstated at the beginning of the sales process, any statement showing a lower level could reveal the untruths.”

The author continues: “In another email, according to a person who read them, the Trumps worried that a reporter might be on to them. In yet another email chain that included Don Jr and Ivanka, the younger generation of Trumps issued the email equivalent of a knowing chuckle, saying that nobody would ever find them out, because only people on the email chain or in the Trump Organization knew about the deception.

“There was ‘no doubt’ that the Trump children ‘approved, knew of, agreed to, and intentionally inflated the numbers to make more sales,’ one person who saw the emails said. ‘They knew it was wrong.’ ‘It couldn’t have been more clear they lied about the sales and knew they were lying,’” another person said.

“Yet another said, ‘I was shocked by the words Ivanka used.’ Was there any doubt the Trumps knew they were lying and that it was wrong? ‘Ten thousand percent no.’”

Trump and his co-defendants settled the civil case in November 2011, agreeing to refund 90% of $3.16m in deposits while refusing to admit any wrongdoing. As part of the settlement, the buyers agreed to no longer help the Manhattan district attorney’s investigation into whether Trump’s alleged fraud broke any laws.

The buyers set out this agreement in a letter that, Bernstein writes, contained language insisted upon by Trump’s lawyers. “In an interview, the district attorney, Cyrus Vance Jr, said that he had never before seen a letter where plaintiffs in a civil case asserted that no crime had been committed. ‘I don’t think I’d ever received a letter like it,’ Vance said.”

The criminal case against Don Jr and Ivanka was eventually wound up because prosecutors feared it would be undermined by the buyers refusing to say they had been the victims of fraud. Ivanka is now in the White House as a senior adviser to the president. Don Jr has emerged as one his chief campaign surrogates for re-election.

Trump’s hugely divisive presidency has seen some of his properties suffer lost custom as his name becomes a liability. In December 2017, the Trump SoHo was rebranded as the Dominick, which helped turn around its fortunes.

Bernstein’s American Oligarchs also chronicles the family history of Ivanka’s husband, Jared Kushner.

Originally from a village in Belarus, many of his ancestors were murdered in the Holocaust. Survivors took refuge in Hungary and Italy and fled to America. The book tells how Jared’s grandfather, Yossel Berkowitz, posed as his father-in-law’s son, putting Kushner as his last name on US immigration paperwork. As a consequence, his grandson is named Jared Kushner rather than Jared Berkowitz.