Trump’s New York Civil Trial Heads to a Close With $370 Million at Stake


Attorneys for the state and the defense will make their final case in a trial that has transfixed the nation heading into the November election

The state attorneys and defense team in former President Donald J. Trump’s civil fraud trial will present closing arguments in a lower Manhattan courtroom on Thursday, Jan. 11.

Each side hopes to persuade New York State Supreme Court Justice Arthur Engoron to issue a ruling consistent with their view of whether the former president and current presidential candidate is liable for misrepresentations in the statements of financial condition (SFCs) presented to lenders over the past decade.

On Wednesday, Justice Engoron told President Trump’s counsel that he would be ineligible to make the closing defense argument himself, as he had expressed interest in doing. The judge voiced concerns over the former president’s ability to stick to the legal issues around which the trial has revolved, and to avoid making his court appearance a campaign event.

Besides its politically explosive timing, as the 2024 campaign gets into high gear with neither of the other leading GOP contenders for the nomination—Ron DeSantis and Nikki Haley—coming close to President Trump in the polls, the monetary stakes in the trial are higher than ever.

New York Attorney General Letitia James, a Democrat, who had previously sought a $250 million penalty—almost one-tenth of President Trump’s estimated net worth of $2.6 billion—upped the ante at the start of this week. She now seeks $370 million.

Ms. James has also made clear that she wants to scuttle President Trump’s career as a real estate magnate. She seeks to have President Trump, former Trump Organization Chief Financial Officer Allen Weisselberg, and the organization’s former controller Jeff McConney banned from the real estate industry indefinitely. She also seeks an injunction on them acting as directors of New York corporations.

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Ms. James also seeks five-year stays on the former president’s sons, Donald Trump Jr., and Eric Trump, participating in real estate deals.

For his part, President Trump accuses the attorney general of mounting a politically inspired campaign against the GOP’s 2024 front-runner.

He maintains that Ms. James is going after him without any legal basis as crime soars on New York’s streets, and that her actions will make businesses want to leave New York and deter others from operating there.

President Trump’s lawyers, who have already appealed unsuccessfully for a directed verdict on the grounds of prosecutorial bias, will make their case on Jan. 11.

Closing arguments are likely to go over much of the same ground covered in the direct examination of such witnesses as Rosemary Vrablic, a former Deutsche Bank managing director closely involved in efforts to grow business between the bank and the Trump Organization, and Eli Bartov, an expert on real estate accounting practices who spoke about what generally accepted accounting principles (GAAP) do and do not permit in the context of loans and insurance. At one point Mr. Bartov grew furious at the state attorneys for having impugned his motives as a witness.

Yet in the end, the closing arguments in this closely watched trial may be little more than a formality in a proceeding where Justice Engoron has already ruled that fraud occurred and has expressed contempt for the defense.

Former President Donald Trump sits at the defense table with his attorneys Christopher Kise (L) and Alina Habba (2nd R) in the New York State Supreme Court in New York City on Dec. 7, 2023. (Eduardo Munoz Alvarez-Pool/Getty Images)
Former President Donald Trump sits at the defense table with his attorneys Christopher Kise (L) and Alina Habba (2nd R) in the New York State Supreme Court in New York City on Dec. 7, 2023. (Eduardo Munoz Alvarez-Pool/Getty Images)

Impact on Real Estate

Adding a further layer of significance to the pending verdict, the legal reasoning used by the government has implications for how real estate brokers, appraisers, buyers, and sellers do business in New York and beyond, experts on real estate law have told The Epoch Times.

These elements combine to make the civil trial’s outcome a landmark ruling both politically and commercially.

In the view of some experts, much of the fierce argumentation throughout the trial would have been avoidable with more widely accepted protocols in place. Much of the contention has been about whether Deutsche Bank was bound to abide by the disclaimers on the SFCs and to perform its own valuations of Trump properties, or whether responsibility for accurate valuation began and ended with the preparers of the SFCs.

“I do find it interesting that, on some of these huge projects, lenders rely on the valuation provided by the borrower instead of securing an independent appraisal, which would have obviated a lot of heartache for everyone,” Mark Scheier, a partner at the real estate law firm Scheier Katin and Epstein, told The Epoch Times.

The headquarters of Germany's Deutsche Bank in Frankfurt, Germany, on Sept. 21, 2020. (Ralph Orlowski/Reuters)
The headquarters of Germany’s Deutsche Bank in Frankfurt, Germany, on Sept. 21, 2020. (Ralph Orlowski/Reuters)

The Government’s Case

Since the trial began on Oct. 2, 2023, attorneys for Ms. James’ office have argued that members of the Trump Organization inflated the value of assets listed on its SFCs, in the hope of gaining more favorable terms for loans and insurance related to Mr. Trump’s various properties.

In both direct examination and cross-examination, they have presented images of SFCs, contracts, emails, letters, and other documents bearing the signatures of Mr. Donald Trump Jr., Mr. Eric Trump, Ivanka Trump, Mr. Weisselberg, Mr. McConney, and President Trump himself. Their questioning sought clarification of what these individuals said in conversations and email exchanges going back to 2012. The prosecution elicited expert testimony about GAAP rules and whether the documents they showed the court were compliant.

On Nov. 1, New York state attorneys brought to the stand Michael McCarty, a banking expert who had prepared a detailed report for the attorney general’s office and who believed that banks suffered massive losses by charging interest rates derived from faulty valuations of Trump properties.

President Trump’s attorneys disputed whether the interest rates would have been different if values stated on the SFCs were higher or lower, and questioned Mr. McCarty’s familiarity with the actual policies of Deutsche Bank, the lender with which President Trump and his associates dealt extensively over the past decade.

In spite of these objections, Mr. McCarty’s testimony and report have formed part of the basis for Ms. James’ upgraded claim of $370 million in damages.

Among the claims in motions filed on Jan. 5, 2024, are that President Trump saved $168 million that he would have had to pay in interest on loans if he and his associates had provided correct valuations, and that he improperly netted $152 million from the sale of the Old Post Office building in Washington.

Other Trump properties whose internal accounting have been the subject of painstaking scrutiny over many hours of direct and cross-examination include 40 Wall Street, Trump Tower in Midtown Manhattan, the Trump International Hotel & Tower in Chicago, the Mar-a-Lago Club in Palm Beach, Florida, the Trump National Doral Golf Club near Miami International Airport in Florida, and the Trump Estate in Aberdeen, Scotland.

An exterior view of the entrance to the new Trump International Hotel at the Old Post Office in Washington on Oct. 26, 2016. (Gabriella Demczuk/Getty Images)
An exterior view of the entrance to the new Trump International Hotel at the Old Post Office in Washington on Oct. 26, 2016. (Gabriella Demczuk/Getty Images)

Trumps on the Stand

The government lawyers pushed hard to find irrefutable evidence of accounting fraud. In their efforts to seize upon a “smoking gun” amid all the piles of documents, government attorneys put President Trump’s three adult children—Mr. Donald Trump Jr., Mr. Eric Trump, and Ms. Trump—on the stand and asked them questions about their various roles in their father’s real estate dealings.

Though all three said such questions were more properly addressed to the accounting experts whose job was to oversee the preparation of SFCs, and Trump lawyer Christopher Kise invoked the statute of limitations in his many objections, the minutiae of decade-old emails and phone calls occupied a bulk of the testimony that Ms. James’ side elicited.

On Nov. 1, 2023, Mr. Donald Trump Jr. took the stand to face cross-examination from government lawyers. Typical of his and his siblings’ answers to their queries was his comment, in reference to the accountants, that “these people had incredibly intimate knowledge. I relied on them.”

When Mr. Eric Trump took the stand on the following two days, he too said that the content of SFCs was the accountants’ and lawyers’ responsibility, and described himself as a businessman who engaged in so many calls, conversations, and emails in the course of a day that to ask him about details of an exchange more than a decade ago was far outside the bounds of fairness.

“I certified something that I believed was accurate, that the lawyers told me was accurate, that the financial people told me was accurate,” he said.

On Nov. 6, President Trump himself took the stand and adopted a defensive tone, sometimes veering away from the accounting issues to address what he saw as a politically motivated effort to discredit him and derail his reelection campaign, at one point prompting Justice Engoron to urge Mr. Kise to “control your client.”

“If you can’t control him, I will, and will draw every negative inference,” the justice warned.

When Ms. Trump took the stand on Nov. 8, after having tried to avoid testifying on the grounds that she no longer lived in New York and had extremely limited involvement with the matters in question during this phase of the trial, she too said she that was not an accountant and was not aware of having played any role in the drafting of SFCs.

Questions from the government side about documents and clauses from as far back as 2011 prompted Mr. Kise to object on the grounds that such items fell far outside the statute of limitations. But Justice Engoron shot down the objection. This provoked Mr. Kise to say that he hoped that the defense side would enjoy the same latitude when it put witnesses on the stand, grilling them about what they might have seen or said well more than a decade ago.

Eric Trump departs from the first day of testifying at former President Donald Trump's civil fraud trial in New York City on Nov. 2, 2023. (David Dee Delgado/Getty Images)
Eric Trump departs from the first day of testifying at former President Donald Trump’s civil fraud trial in New York City on Nov. 2, 2023. (David Dee Delgado/Getty Images)

The Defense Hits Back

For all the rancor of the government lawyers’ cross-examination of the Trump family, the most critical parts of the trial, from a legal standpoint, may be those where Ms. Vrablic and Mr. Bartov took the stand and gave testimony that—in different ways—directly undermined the government’s case.

When Ms. Vrablic took the stand on Nov. 29, the direct examination focused on her role as a Deutsche Bank managing director during the most critical phases of the expanding relationship between the bank and the Trump Organization. She described herself as an intermediary between other executives at Deutsche Bank, up to and including then-CEO Anshu Jain, and the Trump family.

Ms. Vrablic’s testimony rendered a version of the relationship wholly at odds with the state attorneys’ story of how employees in the Trump Organization tried to hoodwink a well-meaning bank by providing doctored records.

In her telling, Deutsche Bank executives badly wanted to do more business with the Trump Organization, and the initiative and pressure came from their side, not the real estate magnate’s.

At the behest of her superiors, Ms. Vrablic courted the Trumps’ business. She dealt with President Trump’s son-in-law, Jared Kushner, on business matters and helped coordinate what she described as a highly successful lunch meeting between Mr. Jain and President Trump. In an Aug. 7, 2014, email to Ms. Trump, Ms. Vrablic said she and her colleagues were “thrilled” at the growth of the business relationship and called Ms. Trump’s father one of the top revenue generators on the bank’s list of clients.

In the midst of it all, Ms. Vrablic herself played a critical role in negotiating loans for the Doral Golf Club, the Trump International Hotel, and the Old Post Office.

Her testimony affirmed a point that President Trump’s lawyers had repeatedly raised throughout the trial: that from the bank’s point of view, President Trump, whose assets easily exceeded $100 million in value, qualified as a high-net-worth individual by any definition of the term. Presenting himself as an acceptable credit risk who would repay his loans and would not go broke involved no trickery whatsoever—a point that defense lawyers are certain to drive home ever more forcefully in their closing arguments.

Justice Arthur Engoron presides over former President Donald Trump's civil fraud trial in New York Supreme Court in New York City on Oct. 3, 2023. (Dave Sanders/Pool Photo via AP)
Justice Arthur Engoron presides over former President Donald Trump’s civil fraud trial in New York Supreme Court in New York City on Oct. 3, 2023. (Dave Sanders/Pool Photo via AP)

‘No Evidence Whatsoever’

On Nov. 14, 2023, the defense put real estate investor Steven Witkoff on the stand and drew testimony about Mr. Witkoff’s dealings with President Trump over 40 Wall Street.

Mr. Witkoff made the case that two appraisers could both be totally honest yet reach different figures when attempting to assign valuations to the same property, given how many different factors come into play. His testimony supported the Trumps’ arguments on the stand that a property often has lucrative potential that dry calculations of value-per-square-foot may miss, especially when, as in the case of President Trump’s property in Aberdeen, Scotland, it lies in or abuts a region rich in oil or another natural resource.

The court also heard testimony from Jason Flemmons, who drew on his experience in forensic accounting to argue that GAAP incorporates a number of different—and fully legal—ways of ascertaining worth, including estimated current value and fair value.

“At the end of the day, what’s important is that the method be disclosed. … There is no one right value. A reasonable person may disagree,” Mr. Flemmons said.

The statements of Mr. Witkoff and Mr. Flemmons may be the most important testimony from the defense’s point of view, which should figure prominently in the closing arguments.

Mr. Bartov, a professor of accounting at New York University’s Stern School of Business, is a widely published researcher, committee chair, and sought-after speaker on specialized accounting topics, including various types of fraud and how to spot them.

He took the stand on Dec. 7 and made a case that Deutsche Bank’s credit reports carried far more weight than what the Trumps may have put forward in their SFCs.

Even if the justice bases his ruling solely on what is in the SFCs, Mr. Bartov argued, nothing in them points to any fraud on the part of the former president or his associates. Mr. Bartov said he could not find a single GAAP provision that the Trump Organization’s SFCs violated.

“My main finding is there is no evidence whatsoever of any accounting fraud. The SFCs over the years were not materially mistaken,” Mr. Bartov stated.

He went on to say that some of the charges concerning misrepresentations in the SFCs “bordered on absurd,” and that a lender as sophisticated as Deutsche Bank would not have based its calculations solely on the SFCs.

The government lawyers’ cross-examination of Mr. Bartov led to an explosive moment, when he felt they had questioned his integrity as a witness.

“You ought to be ashamed of yourself,” Mr. Bartov said.

New York Attorney General Letitia James arrives for former President Donald Trump's civil fraud trial at New York State Supreme Court in New York City on Nov. 8, 2023. (Spencer Platt/Getty Images)
New York Attorney General Letitia James arrives for former President Donald Trump’s civil fraud trial at New York State Supreme Court in New York City on Nov. 8, 2023. (Spencer Platt/Getty Images)

Varying Estimates ‘Not Unusual’

The attorney general’s case amounts to an attempt to retroactively apply certain standards and rules that are far from standard practice in real estate, the defense argues.

In agreement with this view are attorneys and appraisers who work from day to day in commercial real estate.

“It’s not unusual, particularly in disputes about the value of property—real, personal, or business—for appraisers and others to differ in their opinion of value. In some cases, that may be because different definitions of value were used,” Francois Gregoire, a realtor and an instructor at the Bob Hogue School of Real Estate in St. Petersburg, Florida, told The Epoch Times.

Market value means something entirely different from assessed value or liquidation value, Mr. Gregoire noted. Investment value may differ from insured value or marketable case value, he added.

What matters above is all is that qualified individuals conduct valuations, and that they avoid any confusion by making sure that appraisers adopt the same definition.

“To assure public trust in the legal system, the courts must insist experts have the necessary qualifications, and their work complies with applicable standards. The courts must also assure the same rules apply to all parties involved,” Mr. Gregoire continued.

In agreement about the differing metrics and ultimate subjectivity of appraisals is Cara Ameer, a realtor at Coldwell Banker in Los Angeles.

“Real estate is and always has been a very subjective industry. Appraisals are considered subjective and are an art versus a science,” she told The Epoch Times.

When Justice Engoron hears closing arguments and issues his final ruling, Ms. Ameer sees a number of possible consequences for the industry.

“If the outcome goes against Trump, it may send a message to appraisers to be extra cautious—ultimately, their licenses are on the line, no matter what their existing relationships are with clients,” she said.

“If the trial goes for Trump, with lesser penalties or ramifications, it could encourage commercial property owners and developers to be more bold in pushing for what they want, values-wise, and challenging assessor values,” Ms. Ameer added.

The Epoch Times has reached out to Ms. James’ office for comment.


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