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  • Writer's pictureThe San Juan Daily Star

Trump’s fraud trial starts with attacks on attorney general and judge

A protester outside Trump Tower ahead of former President Donald Trump’s civil fraud trial in Manhattan, Oct. 2, 2023. The former president is accused in a civil lawsuit of inflating his net worth to win favorable terms on loans. He has said he is being persecuted.

By Ben Protess, Jonah E. Bromwich and Kate Christobek

The trials of Donald Trump began earlier this week in a New York courtroom, where the former president arrived to fight the first of several government actions — a civil fraud case that imperils his company and threatens his image as a master of the business world.

The trial’s opening day brought Trump face-to-face with one of his longest-running antagonists: New York Attorney General Letitia James, who filed the case against him, his adult sons and their family business. If her office proves its case, the judge overseeing the trial could impose an array of punishments on Trump, including a $250 million penalty.

Outside the courtroom, Trump fired a fusillade of personal attacks at James and the judge, Arthur Engoron. He called the judge “rogue” and James “a terrible person,” even suggesting that they were criminals.

Inside, Trump sat in uncomfortable silence as James’ lawyers methodically laid out their case. The attorney general’s office accused the former president of inflating his riches by more than $2 billion to obtain favorable deals with banks and bragging rights about his wealth.

“Year after year, loan after loan, defendants misrepresented Mr. Trump’s net worth,” Kevin Wallace, a lawyer for James, said during opening statements. Exaggerating for a television audience or Forbes Magazine’s list of the richest people is one thing, he said, but “you cannot do it while conducting business in the state of New York.”

Wallace cast doubt on the value of some of Trump’s signature properties, including Trump Tower in Manhattan, laying the groundwork for a reckoning of the former president’s net worth.

The trial, expected to last more than a month and to include testimony from Trump, coincides with the former president’s latest White House run. After James’ civil case ends, Trump will face four criminal trials that touch on a range of subjects: hush-money payments to a porn star, the handling of classified documents and his efforts to remain in power after losing the 2020 election.

James’ case, which will be decided by the judge rather than a jury, has struck a nerve with the former president. Her claims portray him as a cheat rather than a captain of industry and undercut an image he constructed while he catapulted from real estate to reality television fame and ultimately the White House.

For now, though, government scrutiny has only bolstered Trump’s political fortunes. He is polling far ahead of his Republican rivals and has used the cases against him to make fundraising appeals, casting himself as a martyr under attack from Democrats including James and Engoron.

The trial will enable Trump to bring the campaign to the courthouse steps, where he can deliver impassioned defenses and pointed attacks while his lawyers inside the courtroom grapple with accounting and financial arcana.

On Monday, Trump sat at the defense table, arms crossed and scowling, while occasionally rolling his eyes at the judge and yawning during the duller portions of the proceeding. But he came out swinging on his way into the courtroom, telling reporters that James was out to get him because he is performing so well in the polls.

“You ought to go after this attorney general,” he said, without specifying who or how. He said that Engoron should “be disbarred” and that the case against him was “a witch hunt, it’s a disgrace.”

One of Trump’s lawyers, Alina Habba, echoed some of his harshest claims during her opening statement, saying that James ran for her office to “get Trump.”

She argued, as Trump nodded along, that his company was simply “doing business” and that “there was no intent to defraud, period, the end.” She spoke as if she were addressing a jury, or a television camera, rather than Engoron.

Her statement, which she said he had not planned, altered the tenor of what had begun as a dry proceeding. It prompted squabbles between the defense team and the judge.

The substance of Trump’s defense is that his annual financial statements were merely estimates, and that valuing real estate is more art than science. The banks to which Trump submitted his statements, his lawyers argued, were hardly victims: They made money from their dealings with Trump and did not rely on his estimates.

“There was no nefarious intent,” said Trump’s lead lawyer, Christopher Kise. Any difference in valuation “simply reflects the change in a complex, sophisticated real estate development corporation.”

“Banks and insurers know that the statements are estimates,” he added. “They are not designed to be absolutes.”

Trump is starting the trial at a significant disadvantage. Engoron ruled last week that the former president had persistently committed fraud, deciding that no trial was needed to determine the claim at the core of James’ lawsuit.

As an initial punishment, Engoron revoked Trump’s licenses to operate his New York properties, a move that could crush much of the business known as the Trump Organization.

At trial, James is seeking more from Engoron, asking that he impose the $250 million penalty and that the former president be permanently barred from running a business in New York. The trial will determine what penalty Trump must pay and whether he will be banished from the world of New York real estate that made him famous.

James’ witness list includes Trump supporters and critics alike: Trump and his sons, Eric and Donald Trump Jr., are on the list, as is Michael Cohen, his former fixer turned nemesis. During Wallace’s opening statement Monday morning he played a video of Cohen saying that it was his job to reverse engineer the value of each of the company’s assets to arrive at Trump’s preferred net worth.

In the afternoon, Trump’s former accountant, Donald Bender, testified that it was the Trump Organization’s responsibility to ensure that the financial statements were in line with generally accepted accounting principles — and that they sometimes did not follow those principles.

Wallace, in his opening statement, cited inflated values of three key Trump properties in New York: the triplex apartment in Trump Tower on Fifth Avenue; 40 Wall St. in the heart of the financial district; and his Seven Springs estate in Westchester County.

According to Wallace, Trump based the value of the triplex on its size, saying it was 30,000 square feet. In reality, the apartment was about 11,000 square feet.

“For years, Donald Trump falsely inflated his net worth to enrich himself and cheat the system,” James said in a statement Monday, adding, “No matter how rich or powerful you are, there are not two sets of laws for people in this country.”

As he left the courtroom Monday afternoon, Trump passed James in the front row. He glared at her. Soon after, his son Eric walked by and shook her hand.

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