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Trump on Trial: What to Know About Trump’s Legal Woes in New York State

Published: October 11, 2023
Former President Donald Trump speaks to supporters during a rally at the Iowa State Fairgrounds on October 09, 2021.
Former President Donald Trump speaks to supporters during a rally at the Iowa State Fairgrounds on Oct. 09, 2021. (Image: Scott Olson via Getty Images)

Former U.S. President Donald Trump is in court again, defending himself against a $250 million lawsuit as well as a number of other charges related to his past real estate dealings in New York state and beyond. 

Spearheading the lawsuit is New York Attorney General Letitia James, who said, prior to taking the role, “As the next attorney general of [Trump’s] home state, I will be shining a bright light into every dark corner of his real estate dealings, and every dealing, demanding truthfulness at every turn.”

James has made good on her comments, now alleging that Trump “falsely inflated his net worth by billions of dollars” in order to secure favorable loan and insurance terms for his sprawling real estate empire. 

In a filing, James accused Trump of overstating his net worth by up to $3.6 billion each year in order to secure favorable business terms.

She said he used the proceeds of this alleged fraud to purchase the Trump Golf Club in Miami, Trump International Hotel and Tower in Chicago and the Old Post Office building in Washington D.C.

She argues that any profits made from those properties were made due to fraudulent activity.

‘Persistent and repeated fraud’

James is striving to “permanently bar Donald Trump, Donald Trump Jr, Ivanka Trump, and Eric Trump from serving as an officer or director in any New York corporation or similar business entity registered and/or licensed in New York State.”

She is also seeking to “bar Donald Trump and the Trump Organization from entering into any New York real estate acquisitions for five years” and “award disgorgement of all financial benefits obtained through the persistent fraudulent practices, estimated to total $250 million.”

Judge Arthur Engoron, who is presiding over the case, previously found that Trump, his adult sons, and 10 of his companies were liable for “persistent and repeated fraud” in a pre-trial ruling. 

Engoron was the same judge who assigned an independent monitor to oversee the Trump Organization’s financial statements last year. 

“Engoron said Trump’s defense had repeatedly made patently ‘bogus’ arguments defending the company’s process of valuing properties on financial statements that Trump used to get loans and insurance policies,” the Washington Post reported. 

He also said that Trump was living in a “fantasy world, not a real world.”

Citing an example, Engoron said that Trump claimed his triplex penthouse in Trump Tower was 30,000 square feet when it was actually closer to 11,000. 

Trump’s defense team, meanwhile, argued that “the calculation of square footage is a subjective process that could lead to differing results or opinion based on the method employed to conduct [the] calculation,” which is typical of the commercial real estate industry. 

Engoron also said Trump claimed Mar-a-Lago was worth $739 million, but according to a Palm Beach Assessor he spoke to, it was worth only between $18 million and 27 million.

But not all agree that the charges are valid.

According to the New York Post, real estate insiders were “bewildered” by the judge’s valuation, saying the property would list at around $300 million and Forbes estimated the property to be worth closer to $325 million.

Engorgon based his ruling on the lower figure and, as a result, revoked Trump’s New York business licenses after he found Trump committed fraud by inflating his wealth. 

This means that Trump will have to hand over his Empire State properties like Trump Tower and the Trump International Hotel to an independent third party, otherwise known as a receiver. 


No trial required

The New York Times wrote, “Engoron … decid[ed] that no trial was needed to determine the claim at the core of … Jame’s lawsuit.” Unlike criminal cases, trials are not always required for civil cases. 

According to U.S. courts, “The overwhelming majority of civil cases are resolved prior to trial,” due to summary judgment.

“A summary judgment is a decision made based on statements and evidence without going to trial. It’s a final decision by a judge and is designed to resolve a lawsuit before going to court. Summary judgment is granted when there are no other facts to be tried. All of the necessary statements and evidence are already in front of the judge, and there’s no way to obtain more information,” according to legal experts.

Trump’s defense previously waived a right to trial, with some speculating that they did so because they believed it would be difficult to select an unbiased jury in Democrat-majority New York. 

James asked for a partial summary judgment, arguing that it had already been established that Trump engaged in fraud. 

She used New York’s Executive Law 63(12) against Trump, which the New York Times says is a law typically used to take on corporate giants. Historically, the law has been primarily used against corporations, but individuals have been tried under the law in the past. 

The law enables the attorney general to sue if a business or a person has engaged “in repeated fraudulent or illegal acts or otherwise demonstrate[s]  persistent fraud or illegality,” without needing to prove intent or financial harm. 

Engoron agreed that the law applied based on evidence that Trump overvalued his assets.


Six other accusations

Engoron is now deciding on additional penalties based on six other accusations.

These include falsifying business records, conspiracy to falsify business records, issuing false financial statements, conspiracy to issue false financial statements, insurance fraud and conspiracy to commit insurance fraud. A trial is necessary for these claims.

They require proof that Trump knew he had submitted false information and that he had the intent to mislead. 

If James is successful, Trump would have to pay upwards of $250 million and may have to put his assets in the hands of independent third-party trustees, and prepare an audited statement of his financial condition for the next five years. 

In addition, he would also be barred from acquiring real estate or loans in New York State for the next five years, as well as being barred from serving as an officer or director of businesses registered or licensed to do business in New York State.

No clear victims

Most of James’ accusations are yet to be proven, and, according to Trump’s defense, do not hold up under scrutiny. 

Moreover, there are no clear victims of Trump’s alleged crimes. 

Trump’s defense team argues that “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.”

They also argue that “banks and insurers know that the statements are estimates … they are not designed to be absolutes.”

Trump’s attorney argued that at one time Deutsche Bank valued Trump’s net worth to be $2 billion less than what Trump did, but still approved him for a loan. 

If any bank felt that they were cheated, they could have sued, but this has not happened, they argue.

According to the Wall Street Journal, Engoron agreed that “defendants correctly assert that ‘the record is devoid of any evidence of default, breach, late payment, or any complaint of harm,’” before adding that these circumstances are “completely irrelevant,” citing section 63(12) of New York’s Executive Law. 

“[The Office of the Attorney General of the State of New York] need only prove: [1] the [Statements of Financial Condition] were false and misleading; and [2] the defendants repeatedly or persistently used the [Statements of Financial Condition] to transact business,” Engoron said.

Trump is claiming the legal action against him amounts to election interference, and it appears he is using his very public trial to campaign for his 2024 presidential bid. Currently, according to ABC News and Washington Post, Trump is polling above not just his opponents for the upcoming GOP primary on Jan. 15, 2024, but also better than incumbent President Joe Biden.