Donald Trump’s Fraud Trial in New York Is this a case about inflated asset values or partisan politics? Yes.
New York’s civil fraud trial against Donald Trump and his business empire started Monday in a Manhattan courtroom, and the great shame is that he and state Attorney General Letitia James can’t both lose. In comments at the courthouse, Mr. Trump called it a “witch hunt,” and he has a point. Yet the investigation also seems to have caught some typical Trumpian deception.
Judge Arthur Engoron granted partial summary judgment to the state last week, ruling that Mr. Trump presented grossly inflated financial figures to lenders. This is “not a matter of rounding errors or reasonable experts disagreeing,” he wrote. Mr. Trump’s famed triplex residence in Trump Tower is 10,996 square feet, but he repeatedly claimed 30,000 square feet.
“Defendants absurdly suggest that ‘the calculation of square footage is a subjective process that could lead to differing results,’” the judge added. “Well yes, perhaps, if the area is rounded or oddly shaped,” but “good-faith measurements could vary by as much as 10-20%, not 200%. 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.”
The ruling goes on for pages like this: Despite four appraisals pegging his Seven Springs estate at $30 million or less, Mr. Trump claimed it was worth $261 million. He valued apartments in New York as if their rents weren’t regulated. His figures for several golf clubs “included a 15% or 30% ‘premium’ based on the ‘Trump brand,’” according to the judge, even while lenders were told no such premium was added.
Judge Engoron acknowledged that this asset puffery doesn’t seem to have created losses for the creditors: “Defendants correctly assert that ‘the record is devoid of any evidence of default, breach, late payment, or any complaint of harm.’” The judge said, however, that legally speaking this is “completely irrelevant.” Whether he is correct under New York law is a possible subject of appeal.
Perhaps the state will argue that the lenders might have demanded better terms if they’d seen accurate information. New York is the nation’s financial capital and has an interest in stopping deceit in the marketplace.
But the lenders weren’t naifs and had to know Mr. Trump’s penchant for lying. Mr. Trump appears to believe he could claim anything, as long as he tacked on a disclaimer. “They call it ‘worthless clause,’” he said in a deposition, “because it makes the statement ‘worthless.’”
Yet Mr. Trump is right that Ms. James is a partisan Democrat who campaigned on going after him. The night she won the AG’s race in November 2018, she proclaimed: “I will be shining a bright light into every dark corner of his real estate dealings.” This is an abuse of prosecutorial power, targeting a person and then hunting for something to charge him with.
There is also cause to wonder about Judge Engoron’s sweeping judgment when there are no clear victims. The judge’s pretrial ruling last week would essentially strip Mr. Trump of control over assets in New York, including Trump Tower. Ms. James wants to ban him from doing business in New York. It’s hard to believe anyone not named Trump, and not so loathed by Democrats, would be facing such a sanction.
Mr. Trump showed up in court Monday for a reason, using every opportunity to portray himself as a political victim. His claim will resonate with many because of Ms. James’s targeting and Judge Engoron’s caustic opinion. If Democrats hope all of this will keep Mr. Trump from the White House, they may discover they are helping him win the GOP nomination to face a weak and unpopular President Biden.
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