MANHATTAN (CN) — New York Attorney General Letitia James is seeking $370 million in disgorgement from Donald Trump and his co-defendants for their “repeated and persistent fraud,” according to her post-trial brief filed Friday in New York Supreme Court.
That’s a big bump from the $250 million James originally sought when she filed the lawsuit in 2022, in which she claimed that Trump and his co-defendants fraudulently inflated yearly statements of financial condition, or SFCs, to appear wealthier to banks, insurers and the media.
The stark increase comes after a grueling 10-week trial, which featured new evidence of “ill-gotten gains” presented by the attorney general’s banking expert, Michiel McCarty.
“Defendants reaped hundreds of millions of dollars in ill-gotten gains through their unlawful conduct,” James wrote in her Friday brief. “Record evidence, including the substantively unrebutted testimony of plaintiff’s banking expert Michiel McCarty, supports disgorgement of $370 million.”
McCarty took the stand in November, when he told the court that Trump’s fraudulently inflated financial statements effectively cost banks more than $168 million in lost interest.
McCarty calculates that as a result of Trump's fraud, banks lost the following amounts on loans for four properties: Doral, $72.9 million; Old Post Office, $53.4 million; Chicago, $17.4 million; and 40 Wall St., $24.2 million, for a total of $168,040,168.
That $168 million, coupled with the sales of two Trump Organization properties apparently aided by his fraudulent activity, amounts to the $370 million — plus 9% interest — that the attorney general now seeks.
In addition to disgorgement, James is looking to impose a statewide permanent industry bar on Trump and former Trump Organization executives Allen Weisselberg and Jeff McConney. She’s also seeking five-year bans for Trump’s sons Eric and Donald Jr. for their supposed roles in the company’s schemes.
James’ office argued at trial that Trump, Weisselberg and McConney were instrumental in preparing the financial statements that, she said, were then used to swindle banks and insurers.
“Direct evidence from multiple witnesses establishes Trump made known his desired target net worth each year prior to assuming public office in 2017, which [Weisselberg] and [McConney] then dutifully set out to hit by reverse-engineering the asset values in the SFC,” James wrote.
Even after Trump took a step back from the Trump Organization when he was elected to the presidency in 2017, that fraudulent practice “continued under the leadership of Eric Trump and Donald Trump Jr.,” James said.
But in their own closing brief, also filed Friday, Trump’s eldest sons claim they had nothing more than a “peripheral knowledge” of the statements of financial condition.
“Instead, the record evidence and testimony adduced at trial conclusively establishes that the SFCs were prepared, in their entirety, by others at the company working in conjunction with the company’s long time outside accountants,” Eric and Donald Jr. wrote.
Both sons tried to distance themselves from the scrutinized financial documents during their respective testimony at trial. Despite the attorney general’s office showing the court emails from Eric and Donald Jr. about those very documents, both claimed not to know much about their preparation or use.
“I was not very familiar with my father’s financial statement,” Eric told the court during his November testimony.
Donald Jr. denied working on the statements at all.
“The accountants worked on it,” he said on the stand. “That’s why we pay them.”
Like his sons, Trump downplayed his involvement in preparing the financial statements, despite also claiming that they were largely accurate and even offered a conservative estimate of his wealth.
Judge Arthur Engoron had already ruled that the figures on those documents were fraudulently inflated before trial began last year.
Still, Trump’s attorneys repeatedly argued that his financial statements weren’t meant to fool anybody. In his closing brief, which was separate from his sons’, the former president claimed that James never proved that the banks’ decisions were affected by his documents at all.
“She failed to elicit any testimony reflecting that the banks would have pursued a different course of action had they known of the alleged inaccuracies in the SFCs,” Trump argued. “Fundamentally, the onus is on the lender to determine what is material based on its own risk rating, risk profile, underwriting, and analysis.”
Closing arguments for this case are scheduled for Jan. 11. Trial has been on hiatus since mid-December, when the defense rested its case. Engoron is expected to issue a ruling on the case’s remaining fraud counts and owed damages by the end of January.
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