NY Attorney General Demands $370 Million in Civil Fraud Trial against Trump and Co-Defendants
NY attorney general seeks over $370M from Trump and co-defendants in fraud trial, aiming to prevent former president and sons from doing business in the state for five years
The New York attorney general is requesting over $370 million from Donald Trump and his co-defendants, as well as seeking to prevent the former president from conducting business in the state. These details were outlined in a post-trial brief filed on Friday in Trump's civil fraud trial. New York Attorney General Letitia James claimed that Trump and his co-defendants' intent to defraud while preparing the former president's financial statements was undeniable, and she is seeking the reimbursement of $370 million in disgorgement, which is a substantial increase from the original amount of $250 million.
"The myriad deceptive schemes they employed to inflate asset values and conceal facts were so outrageous that they belie innocent explanation," the attorney general wrote.
Donald Trump, a Republican presidential candidate and former U.S. President, addressed attendees at a campaign event in Waterloo, Iowa on December 19, 2023. The Iowa Republicans will have the first opportunity to choose their party's nominee for the 2024 presidential race during the caucus on January 15, 2024. (Photo by Scott Olson/Getty Images)
Appeals by Trump for ballot access raise critical constitutional questions
In a summary judgment ruling, Judge Arthur Engoron found Trump and his co-defendants responsible for ongoing fraud, leading to the cancellation of Trump's business certificates in New York. Trump has appealed the decision, resulting in a temporary pause on dissolving the companies by the court.
The attorney general is seeking a five-year ban for Donald Trump Jr. and Eric Trump. Trump's lawyers argued that the allegations should be rejected, stating that most of the transactions in the attorney general's complaint were beyond the statute of limitations, Trump's financial statements did not contain material misstatements, and the attorney general did not demonstrate any real-world impact.
Trump's lawyers asserted that there is no proof in the record that the terms or pricing of any of the subject loans would have been influenced by the alleged misstatements. They also noted that no witness from any bank or elsewhere testified to this at the trial. The post-trial briefs, filed on Friday, prepare for closing arguments before Engoron next week and the judge's ruling could potentially be issued later this month.
Engoron has already dismissed multiple arguments from Trump's lawyers, including challenges to the statute of limitations and disgorgement, determining that both were legally justified.
Arthur Engoron and Donald Trump.
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Judge rejects critical aspects of Trump's defense in NY civil fraud case, signaling trouble for former president. The 11-week trial aimed to determine the financial liability of the Trumps and their company, as well as the future of the former president's business in New York. The attorney general's office attempted to substantiate six more allegations against Trump, such as conspiracy, false financial statements, business record falsification, and insurance fraud.
Trump's attorneys were unsuccessful in swaying the judge to change his initial ruling, as Engoron made it clear last month that he was not convinced by their arguments. In a scathing denial of the former president's attempt to dismiss the case, Engoron wrote in a three-page opinion that the experts called by Trump's attorneys were not credible, and the key arguments presented by the defense were unconvincing.
Trumps attorneys made clear repeatedly at the trial they plan to appeal Engorons ruling, on top of the appeal thats already been filed after his summary judgment decision.
Reaped hundreds of millions
On Friday, the filed briefs provided a concise overview of the legal battles that have unfolded in the courtroom since the trial's commencement in October. The attorney general's office restated its claims that the defendants garnered hundreds of millions of dollars in illicit profits through their illegal actions.
The attorney general's office initially sought over $250 million in disgorgement, but later raised the amount significantly. They argued that Trump benefited from $168 million in saved interest rates, and made $60 million in profit from the Ferry Point golf course license, as well as almost $140 million in total profit from the Old Post Office building lease sale. The attorney general's office claimed that Trump, as the owner of the company, had a financial motive to defraud.
Trump's lawyers cited his own testimony, which the attorney general's office deemed unreliable. They pointed out that Trump claimed to have superior knowledge of real estate, making it unlikely that he lacked specific knowledge about his own assets.
The attorney general accused Trump of relying on fraudulent financial statements and lower interest rates to avoid financial difficulties during his presidency from 2017 to 2020.
$16.5 million in cash held in a partnership with Vornado was removed from Trump's financial statements, which he had no control over. The attorney general's office stated that without the $73,811,815 saved through reduced interest payments, Trump's cash position would have been negative. The attorney general also noted that Trump used the extra capital to invest in various projects, including his 2016 presidential campaign.
Trump's legal team contended that the attorney general did not adequately demonstrate Trump's intent to defraud, noting that Trump had only minimal involvement in preparing his financial statements and did not consider them significant. They also stated that Michael Cohen, Trump's former lawyer and fixer, was the sole witness called to establish intent, and argued that his testimony should be dismissed.
The lawyers for Trump argued that Michael Cohen's testimony, seen as crucial by the New York Attorney General, should be dismissed due to his admission of lying under oath. They also disputed Cohen's claims that President Trump communicates like a mob boss, stating that it does not provide evidence of conspiracy. Additionally, they contended that the attorney general did not prove any significant falsehoods in Trump's financial statements, and that Trump would have still been eligible for his loans even with a lower net worth. They further argued that there was no evidence that the banks would have changed their actions if they had known about the alleged inaccuracies in the financial statements.
Engoron, however, expressed doubt about that argument in his recent opinion, stating that the expert testimony of the attorney general was convincing in establishing Trump's liability for disgorgement.
In his own words, Engoron wrote, "If you falsely inflate the value of your assets to secure a lower interest rate on a loan, reducing the perceived risk for the lender, then your profits are illegitimate. The lender suffers a financial loss, even though it may not be immediate, and thus it does not align with the traditional understanding of damages in the law."
AG seeks five-year ban for Trumps sons
In addition to barring the former president from doing business in New York, the attorney general is asking for a five-year ban for Donald Trump Jr. and Eric Trump.
In a separate briefing, the attorneys representing Trump's sons argued that Engoron should dismiss the claims against Eric Trump and Donald Trump Jr. They stated that no witness testified that either of Trump's eldest sons had more than a peripheral knowledge or involvement in the creation, preparation, or use of any of the Statements of Financial Condition.
The Attorney General countered, stating that Trump's sons were involved in valuations of specific properties and had "direct control" in preparing the statements of financial condition in 2021.
The attorney general highlighted actions taken by the Trump sons, such as hiring the accounting firm Whitley Penn, signing the final representation letter, and overseeing former Trump Org. controller Jeff McConney, who is also a defendant in the case.
McConney stated that he consulted with Eric Trump on specific valuations for Donald Trump's financial statements, which was evident in company emails between the two presented during the trial. Eric testified that he was unaware the information would be used for his father's personal financial statements.
This story has been updated with additional details.
