Trump asks NY judge to throw out state AG’s fraud claims ahead of October trial | Courthouse News Service
Thursday, November 30, 2023
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Trump asks NY judge to throw out state AG’s fraud claims ahead of October trial

New York state attorneys said the former president has "clearly stepped through the looking glass" in defending himself against civil charges that he falsely inflated his personal net worth by up to $2.2 billion per year.

MANHATTAN (CN) — Attorneys for former President Donald Trump urged a New York judge on Friday to toss out the state’s $250 million business fraud suit against him and his namesake corporation, just eleven days before the case is set for trial in state court.

New York Attorney General Letitia James brought the lawsuit in September 2022 after a yearslong investigation into financial practices at the Trump Organization. Jury selection is scheduled to begin on Monday, Oct. 2.

The state accuses Trump of regularly overstating his personal net worth to financial institutions by between $812 million and $2.2 billion each year between 2011 and 2021, to induce more favorable loan terms from banks.

Trump’s lawyers on Friday asked Judge Arthur Engoron to dismiss the entire $250 million civil suit over his asset valuations on a motion for summary judgment, claiming state prosecutors are “uneducated” about real estate and fail to grasp the former president’s expertise on the subject.

James' office, Kise argued, misunderstands disparities in property valuations.

"The case comes down to prosecuting the defendants for engaging in successful business transactions," the attorney said on Friday morning.

Kise said the "estimated current values" on Trump's financial forms don't hinge on current market conditions, and were "not the same as fair value or market value."

Trump’s defense also argues a written disclaimer on their financial statements affords preparers of statements “wide latitude” to choose which methods they use to determine the value of assets and liabilities on compilation reports, and leaves it to the discretion of the preparer which method and assumptions to use.

The former president's legal team also argues Judge Engoron failed to narrow James’ claims sufficiently in light on appellate ruling that found claims against Trump’s daughter Ivanka were time-barred and left the lower court to consider whether to limit the case against the other defendants.

The First Department appellate court is set to hold a panel hearing on that next week, which could delay the start of the trial.

James' office meanwhile says there was “rampant fraud in preparation of Trump’s personal financial statements,” and asked for partial summary judgment on the top count of the complaint to find Trump liable for fraud.

"In defendants’ world there is no objective truth, even in the square footage of a New York City condominium," James' special litigation counsel Andrew Amer said, citing the drastically inflated measurements of the triplex luxury apartment at Trump’s signature Manhattan tower. "Defendants have clearly stepped through the looking glass."

Prosecutors went through twelve Trump Corporation properties and assets individually and detailed how the Trump defendants made false and misleading valuations to inflate Donald Trump’s personal net worth by billions a year.

“The inflation of Mar-a-Lago is simply staggering,” Amer said.

Prosecutors say Trump’s $714 million valuation for his Palm Beach resort disregards the county’s appraisals and does not take into account a legal restriction barring Trump from using property for anything but a social club.

“Mr. Trump deeded away his rights to develop the property for any other purpose other than a social club,” Amer said, explaining Mar-a-Lago can’t be sold to developers and subdivided.

Similarly, prosecutors say Trump’s valuations for the Trump Park Avenue — a 38-story building residential building near Central Park that Trump purchased in 1988 and converted into luxury condos — estimated the value of rent-stabilized apartments as if they were not rent-stabilized, and the value of other unsold units in excess of current market rates.

Kise countered that estimated current value allows for “the net realizable value of the property,” which incorporates the value of those units once rent-stabilized tenants have moved on.

“If you have a long-term view, your view of value is going to be different,” he said. "President Trump is a master at finding value where others see nothing."

“This is the nature of expertise, this is why billionaires are billionaires,” Kise said later in the hearing of Trump’s instincts to select real estate.

During the attorney general’s argument on Friday, Judge Engoron asked if it was possible the grossly inflated appraisals of some of Trump’s New York real estate were honest mistakes.

“Speaking philosophically," the judge queried, "are honest mistake actionable?”

Amer replied that Trump could be held liable for an honest mistake, because the standard applied is whether the statements were false or misleading.

"If they made mistakes, innocent or not, they are responsible if that representation is not true,” he said.

“Even a dog knows the difference between being kicked and being tripped over,” Engoron opined. “There’s a difference between lies and misstatements, but I understand your position.”

Engoron promised to issue a single ruling on the joint motions on Tuesday, Sept. 26. If he sides with the Trump defendants on their motion for summary judgment, there will be no trial.

The judge also promised a ruling on the attorney general's request for sanctions against Trump's team for repeatedly rehashing legal theories that have already been rejected.

Trial is expected to run from Oct 2 through Dec 22, five days a week from 10 a.m. to 4 p.m., ending early at 1 p.m. on Fridays.

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