Trump Fraud Trial: AG Argues Ex-President Gained $1 Billion Through Fraud As His Attorney Claims Trump Is ‘Right About Real Estate’

Topline

The trial determining whether former President Donald Trump and his business committed fraud by inflating their assets began with opening statements on Monday, as the New York attorney general’s office argued Trump knowingly committed widespread fraud while his lawyer claimed the former president did nothing wrong.

Former President Donald Trump sits in the courtroom at New York Supreme Court on October 2 in New … [+] York.

Associated Press

Key Facts

New York AG Letitia James is suing Trump, his business associates—including his sons—and the Trump Organization, claiming they fraudulently inflated the value of business assets in order to obtain more favorable business terms and boost Trump’s net worth by as much as $3.6 billion.

Though Judge Arthur Engoron has already found Trump and his business liable for fraud by misstating the value of their assets, attorney Kevin Wallace from the AG’s office said Monday prosecutors will argue at trial the “defendants engaged in repeated, persistent illegal acts in the conduct of business,” including falsification of business records and insurance fraud, and that there’s “ample evidence” showing the defendants knew the fraudulent valuations were false, as quoted by the New York Times and Washington Post.

Prosecutors showed testimony from ex-Trump attorney Michael Cohen alleging he and then-Trump Organization CFO Allen Weisselberg would inflate the value of Trump’s assets in order to boost his net worth so he would be higher on Forbes’ billionaires list, with Cohen testifying they would “use each of [Trump’s]

Reuters reports the AG’s attorney claimed Trump garnered more than $1 billion as a result of his fraudulent reporting, and Wallace alleged the false valuations also resulted in the Trump Organization getting more favorable interest rates and persuading banks to to take on hidden risk “to the tune of hundreds of millions of dollars,” as quoted by CNN.

Trump’s attorney Christopher Kise argued in his opening statement the former president has made “many billions of dollars being right about real estate investments” and “did not make any false statements” or act fraudulently, as quoted by the Times, alleging the valuations were subjective and that in real estate, “buyers have a view, sellers have a view, none of them are wrong.”

Kise argued the banks that lent money to Trump made money and that any disparate valuations did not have an impact, noting Deutsche Bank underwrote a loan to Trump even though it valued his net worth as being $2 billion less than he did.

What To Watch For

The trial against Trump and his company is expected to last until December, and Clifford Robert, who represents Trump’s sons in the case, told the court Monday that Trump, Eric Trump and Donald Trump Jr., will all testify as part of the trial. The trial is a bench trial, meaning the judge will decide the case and not a jury, which Engoron noted Monday was because nobody in the case requested a jury. Engoron has already ordered Trump’s business certificates to be canceled as part of his ruling finding the former president liable for fraud, but the trial will determine what other penalties Trump and his company could face, including a $250 million fine and barring Trump from any commercial real estate acquisitions, or blocking him and his children leading any New York companies for the next five years.

Crucial Quote

“While it may be one thing to exaggerate for Forbes magazine … you cannot do it while conducting business in the state of New York,” Wallace said during his opening statement, as quoted by CNN.

Chief Critic

“There was no intent to defraud, there was no illegality, there was no default, there was no breach, there was no reliance from the banks, there were no unjust profits, and there were no victims,” Kise argued in his opening statement Monday, as quoted by Reuters.

Forbes Valuation

$2.5 billion. That’s Trump’s estimated net worth, according to Forbes’ real-time tracker, and he ranked 1217th on our 2023 billionaires’ list. In the years covered by the lawsuit, 2011 to 2021, Trump’s net worth as estimated by Forbes ranged between $2.4 billion in 2011 to $4.5 billion in 2015. Prior to James’ lawsuit, Forbes had exposed previous Trump efforts to misstate the size and value of his real estate properties, including exaggerating the size of his Manhattan penthouse, which has been cited in the attorney general’s case against Trump.

Tangent

Trump was present in court on Monday as the trial got underway and listened to the opening statements, with the Times reporting that during the hearing he alternated between appearing “bored” and “angry” and was seen yawning and “fidgeting in his seat.” The former president addressed reporters after opening statements concluded, saying, “We’re going to be here for months with a judge that already made up his mind. It’s ridiculous.” “Other than that, things went very well,” Trump added.

Key Background

James sued Trump, his business associates and company in November 2022 following a yearslong investigation, alleging the ex-president and his company had made more than 200 false statements that misstated the value of his assets to get more favorable business deals and inflate his own net worth. The AG opened the investigation in March 2019 based on congressional testimony by Cohen, who said Trump had fraudulently inflated or deflated the value of his assets on financial statements for personal gain. The lawsuit makes such claims as that Trump overstated the size of his Manhattan penthouse and overvalued Mar-A-Lago by falsely claiming it’s a private residence. Engoron agreed Trump inflated the valuations in his ruling last week finding Trump and his company liable for fraud, writing Trump’s depictions of the valuations as being merely subjective are out of “a fantasy world, not the real world.” Of his penthouse overstatement, Engoron wrote, “A discrepancy of this order of magnitude, by a real estate developer sizing up his own living space of decades, can only be considered fraud.” Trump has maintained the allegations against him and his company are false and a “witch hunt,” repeatedly attacking James and Engoron as being biased against him.

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