Despite the ongoing controversies surrounding Donald Trump like his indictment in Georgia or involvement in an alleged pyramid scheme, one case hits him the most: the current civil fraud trial in Manhattan, New York. Filed by New York AG (Attorney General), Letitia James, the case aims to dismantle the long-standing façade Trump has curated for himself as a talented New York-based entrepreneur with the Midas touch and a business empire to prove it. As the trial unfolds, the stakes are undeniably high, not only for Trump but also for his family, potentially reshaping their ability to conduct business within the city that has played such a central role in their lives. This trial promises to be a pivotal moment in the ongoing saga of Donald Trump’s legal and business challenges, one that may redefine his place in the New York business landscape and the broader public perception.
During the pre-trial deposition, Trump claimed that he did not realize that his financial statements “would be taken very seriously” as people who did business with him were given “ample warning not to trust [his financial statements].” He further characterized the financial statements as “a fairly good compilation of properties” instead of an accurate account of their value, calling some of them “guesstimates” for his personal use. Even though financial institutions sometimes asked for these records, Trump insisted that there was no legal obligation for his statements to be accurate since they came with a disclaimer: “Don’t believe the statement. Go out and do your own work.”
At the heart of the case, James is alleging that the former president and his company, the Trump Organization, had routinely deceived banks, insurers, and others by overstating his wealth in financial documents to seek better loan terms and manipulate taxes. She had also included Trump’s adult sons, Donald Trump Jr. and Eric Trump, in the lawsuit for $250 million, seeking harsh sanctions designed to limit Trump’s ability to conduct business dealings in New York. The New York AG also revealed that Trump’s net worth between 2011 to 2021 was conservatively overstated by $1.9 billion to $3.6 billion, inflating his total assets and financial documents by at least $3 billion for a consecutive 7 years. Trump persisted in denying any wrongdoing, calling the case a “witch hunt” amid his campaign for the 2024 Republican presidential nomination. Due to a state law back in 1956, the state AG has the “expansive authority to investigate and punish corporations,” essentially demanding a “lower burden of proof” compared to other fraud causes by allowing them to issue subpoenas and gathering information before filing a lawsuit. With this in mind, this means that prosecutors do not have to explicitly demonstrate the defendant’s attempt to commit fraud or any financial harm done towards anyone.
Instead of a jury, the overall case will be decided by Judge Arthur Engoron of New York. At the beginning of the trial, Judge Engoron began to impose a “limited gag order” by ordering him to delete a social media post that publicly villainized a court staffer. Before going to court, Trump uploaded an image of Engoron’s principal law clerk, Allison Greenfield, alongside Senate Majority Leader Chuck Schumer at a public event, on Truth Social. Throughout the trial, Trump had characterized the legal battle in New York as a political attack by Democrats—namely New York AG James, a member of the Democratic Party. As for the uploaded photo of Greenfield and Schumer, Trump said that it was “disgraceful” that Greenfield worked for Engoron during this trial. The judge threatened potential offenders with “serious sanctions” if they chose to smear court personnel, not naming anyone in particular: “Personal attacks on members of my court staff are unacceptable, not appropriate, and I will not tolerate them.” Before Judge Engoron’s gag order, Trump had quickly deleted the photo during the lunch break.
Judge Engoron, at the request of James, had already issued a ruling on one of the claims James made where he stated that Trump and his organization routinely “violated state fraud law.” In Judge Engoron’s ruling, Trump alongside the Trump Organization had inflated the valuations of many properties by “hundreds of millions of dollars.” An example of this is the Palm Beach Assessor valuation of Trump’s Mar-a-Lago property being “between $18 million and $28 million for each year between 2011 and 2021—the values for which he paid local property taxes,” while Trump’s annual financial records valued the same property between $328 million to $714 million. One of James’ lawyers pointed out that Trump had continuously approved these financial statements which overestimated his properties’ values as “hundreds of millions more than the valuations of appraisers they had hired.” A Trump lawyer, Christopher Kise, countered the valuations by claiming that these overinflated values were a reflection of “Mr. Trump’s investment genius.” Kise cited the Trump National Doral Miami golf club as an example of this “genius” as the club was bought for $150 million from bankruptcy in 2012, characterizing the property for “well more than $1 billion” currently. Unfortunately for Kise, Judge Engoron was skeptical of his arguments during that hearing to the point of which he outright banged his fist on the bench: “You cannot make false statements and use them in business—that’s what this statute prohibits.” Beyond that, Judge Engoron had ruled another motion by James’ request of sanctioning Trump’s lawyers “for repeatedly making arguments Engoron and other courts had already rejected” with a fine of $20,000. The judge had ruled in James’ favor but also increased the fine to $37,500.
Trump Organization’s executives raised the actual worth of the penthouse in Trump Tower by more than $120 million, claiming that the boost was due to “the value of [Trump’s] celebrity” and a misappraisal by a real estate broker. Jeffrey McConney, a former controller for the Trump Organization, admitted that Trump’s financial statements were “integral” to some of his business deals. McConey also revealed that he talked to a bank to provide Trump’s “2015 and 2016 financial statements” to get a loan for his Seven Springs estate. According to McConey, Trump executives did some research on various real estate listings, primarily for “the highest-priced similar apartments,” to get the value of the Trump Tower penthouse. However, the $100 million spike in the estimate originated from an email exchange he conducted with Kevin Sneddon, a real estate broker, who did not examine the penthouse and was told that the penthouse was “three times its actual size.” Sneddon merely gave a quick estimate for a similar penthouse in a Trump-owned building based in Manhattan, but the actual apartment was sold for “40% of the asking price.” Then, a year after that, McConey added another $20 million onto the penthouse’s value since a Trump executive said that the building’s celebrity owner should increase its value. Aside from the Trump Tower penthouse, McConey acknowledged that he made his calculation of Trump’s Wall Street office building rather than using bank appraisals, inflating the actual building’s value by $227 million. Beyond the New York civil trial, McConey was also involved in another Trump case as he testified against his former company for tax fraud and was granted immunity. The former Trump employee justified his decision by stating that there was no “right way” to evaluate a building’s monetary value so, relying on asking prices was a better choice instead of “sales prices as appraisals do.” However, Judge Engoron extended his skepticism to McConney: “I think any high school student knows the right way.”
While the New York AG continued to present her argument of Trump’s fraud, Trump’s defense team focused on blaming accountant Donald Bender for his negligence. As Bender was the figure who prepared Trump’s financial records for years, he tried to defend himself by stating that he did his due diligence in asking Trump executives for all required documents, but “didn’t always get them.” Bender further claimed that he found out about the absence of key information about Trump Organization’s asset valuations during Manhattan prosecutors’ investigation, believing that the Trump executives’ paperwork “gave me everything [he] needed.” State lawyers used Bender’s testimony as a legal technique to counter Trump’s claims of accuracy in his financial records since Bender signed them and by doing so, had prepared these documents. He also admitted his regrets of signing off on the documents with the missing key information, noting that Trump was “responsible for the accuracy” of the information his documents showed. To strengthen this claim, James’ lawyers provided multiple agreements between the Trump Organization and Mazars (Bender’s accounting firm) between 2011 and 2021, demonstrating that Mazars had “labeled Trump’s supporting asset data as ‘prepared by client’ and relied on the information to be accurate.” During cross-examination, Trump defense attorney Jesus M. Suarez asked Bender about his relationship with Trump and his executives, establishing that Bender did attend Trump’s wedding and got paid more than $1 million for his contributions. Suarez also asked Bender why he did not tell Trump about the miscalculation of the penthouse’s apartment being 30,000 square feet. The New York State has email evidence where the Trump Organization was advised to triple the square feet figure from 10,000 to 30,000.
State Supreme Court Justice Engoron has ordered the cancellation of the business certificates that permitted Trump’s operations in the state of New York, essentially handing him and the Trump Organization the corporate death penalty. Aside from Trump’s New York-based companies to be “canceled,” Judge Engoron also stated that they must find 3 “potential independent receivers” to be appointed within 10 days “to manage the dissolution of the canceled” LLCs associated with Trump and his organization. If Judge Engoron’s decision is finalized and fails to be appealed, Trump will be stripped of any authority to make business decisions over crucial real estate properties in New York such as his building in Wall Street to his Seven Springs estate. Aside from that, Judge Engoron’s ruling will also seize Trump and his family’s right to conduct any business in New York altogether where now the court-appointed receiver will have management rights over the properties “until the assets are disposed of.” According to Melissa M. Cintron, partner at Harrington Ocko & Monk, this particular ruling will have “substantial” damage and implications for Trump’s business since his businesses will be sold off. The businesses identified in the ruling range from the flagship Trump Organization and DJT Holdings LLC to 40 Wall Street LLC and Seven Springs LLC. In terms of the actual logistics, Trump lawyer Christopher Kise raised questions regarding which properties/businesses Trump must sell off or dissolve to which Judge Engoron left it off to the independent monitor’s discretion—Barbara S. Jones, a former U.S. District Court judge. The business certificates filed by Trump and his sons were also ruled to be canceled as well as any business certificates by Allen Weisselberg (Trump’s former chief financial officer) or McConey. Business certificates, once receiving state approval, will grant the legal authority for an entity to conduct business in that state, according to Cintron. And so, with this ruling, financial crimes prosecutor Diana Florence compared it to an actual death sentence: “Without a corporate charter, you can’t operate as a corporation. You can’t get loans, you can’t apply for a government contract…. It’s comparable to once a person dies. A dead person can’t sell property. Only the executor of the estate can do that—or in this case, the receiver.”
Trump’s legal defense fought for an appeal on the dissolution of his New York business certificates and suspension on the overall New York trial in an emergency hearing. The appeals court judge had agreed to halt the ruling on Trump’s business certificates, but still proceeded to have the civil trial continue. According to State Deputy Solicitor General, Judy Vale, AG James already “offered to keep the business licenses as-is until after the trial” but was worried about Engoron’s disagreement. At the same time, Trump’s defense team had already begun to announce their false victory for James’ resolution, but James stood firm in her announcement that the trial would continue to its conclusion.
Throughout his career as a businessman, Trump always prided himself in his real estate empire in New York, including Fifth Avenue’s Trump Tower and various other properties in the city. His concern regarding the loss of such an empire has been actualized in the form of James’ lawsuit, recognizing the potential ramifications for his legacy and family. As the Trump family relies on the New York empire they have built as a part of their reputation, this lawsuit has unmasked the reality of their operations and dealings as a seemingly elite corporation. This particular lawsuit against Trump is a civil case rather than a criminal one, indicating that there will be no jail time if convicted. Despite the lack of jail time, the damage is already done to Trump, according to New York billionaire John Catsimatidis. “This is where all his friends are, this is where he lived for 70 years of his life,” Catsimatidis stated, “It’s a direct attack.”
Donald Trump’s real estate empire in New York, symbolized by iconic properties like Fifth Avenue’s Trump Tower, has been a cornerstone of his identity as a businessman. The threat of losing this empire, as embodied by Attorney General James’ lawsuit, has underscored the potential implications for Trump’s legacy and his family’s future. The lawsuit has pulled back the curtain on the operations and dealings of the Trump family, once viewed as an elite corporation. Notably, this legal action is a civil case rather than a criminal one, meaning that jail time is not on the line if convicted. Nevertheless, the damage to Trump’s reputation and standing has already been considerable, according to New York billionaire John Catsimatidis, who commented on the significance of the lawsuit in Trump’s life. As the trial unfolds, it has become a direct and potent challenge to the very core of Trump’s identity, one that extends far beyond the courtroom and into the heart of his personal and professional history in New York City.