Donald Trump: Legal experts look uphill in fraud case

  • By Kayla Epstein
  • BBC News, New York

image source, Getty Images

This week marked the end of the most dramatic phase of Donald Trump’s business fraud trial in New York, with high-profile members of his family making the trip to Lower Manhattan one by one to answer probing questions from prosecutors.

On Monday, Mr Trump’s defense team will begin presenting their side, calling the former president’s eldest son back to the stand as their first witness. But legal analysts told the BBC that after two damaging weeks of testimony from members of the Trump family, saving their case now will be a tall order.

“It’s been a disaster from a legal perspective,” said Neama Rahmani, a former federal prosecutor and president of West Coast Trial Lawyers.

He believes that Trump “is going to lose this case and lose badly”.

In a worst-case scenario for Mr Trump, Judge Arthur Engoron could bar him and his co-defendants from doing business in New York and issue fines of at least $250m (£204m).

Perhaps the most damaging of all the testimony came from Mr. Trump himself. Taking the stand on Monday, he called New York Attorney General Letitia James a “political hack,” declared the case “a disgrace” and personally attacked Judge Engoron.

At several points, Judge Engoron demanded that Trump’s lawyers rein in his behavior and answer the questions put to him. If they did not, the judge promised to “draw every negative inference I can”.

By responding directly to prosecutors’ questions, Mr. Trump may have done even more damage to his case.

At the heart of the attorney general’s lawsuit are documents known as statements of financial condition, the balance sheets the Trump Organization used to demonstrate the value of its properties and Mr. Trump’s net worth so they could obtain loans and insurance interest.

The Attorney General’s office alleges that these documents were fraudulently inflated to obtain deals they could not have received based on their true finances.

The judge had already ruled that these documents were false. He is now considering whether there was intent to deceive, whether the defendants did it for personal gain and other charges. The judge will also decide whether to issue sanctions and, if so, how severe.


Judge Arthur Engoron expressed frustration with some of Donald Trump’s answers during testimony

On the stand, Mr. Trump boasted that his properties such as Mar-a-Lago and 40 Wall Street were actually worth more than their value on paper, but acknowledged that he believed at least one of his properties may have been overvalued.

At another point, an accuser questioned him about the size of his Trump Tower penthouse, which the firm had claimed was over 30,000 square feet but actually took up just over 10,000. Trump first admitted that he had thought the alleged square footage was “high” – but then began tossing around larger estimates of the size.

During his testimony, Mr. Trump admitted that he had given his input and that some of those values ​​on paper were wrong.

But he insisted that while he offered this input, he did not insist to his accountants or staff on which valuations to use.

Trump denies any wrongdoing and has accused New York’s attorney general of waging a political persecution campaign against him.

His lawyer Alina Habba spoke to reporters after Mr Trump testified that he had “built a great company, it’s worth a ton more than this statement on the financial situation.”

She added that Ms. James, the attorney general, “doesn’t know how to get out of it because her politics won’t let her.”

His children, Donald Trump Jr., Eric Trump and Ivanka Trump, were all more restrained in their testimony and took a different approach than their father. But they didn’t necessarily help the family’s cause.

Each, in their own way, tried to shift the responsibility for the false documents onto the company’s accountants and lawyers.

Trump Jr said he was not familiar with the standard accounting guidelines that companies like his must adhere to. Eric Trump testified that he was not involved in the creation of the financial statements. Both are vice presidents of the Trump Organization.

They stuck to this defense even though they were presented with various emails they sent or were copied on or documents they signed that contained information based on the false accounts.

Mrs. Trump, who was not a defendant, tried to give prosecutors as little to work with as possible, repeatedly saying she could not remember documents they presented to her.

When confronted about emails showing her discussing the terms of a loan Deutsche Bank was making to her father for a real estate project, Mrs Trump said she could not remember the exchanges.

Her statements were unlikely to help, Mr Rahmani said. Trump Jr. and Eric Trump were “still responsible for some of the allegations as financial fraud, even if they didn’t intend to,” he noted.

And he added that the Trump Organization was responsible for the actions of Donald Trump and his sons during their employment.

Legal experts agreed that Mr Trump’s defense team, led by veteran lawyer Chris Kise, will start on the back foot next week.

The lawyers spent the last few weeks attacking the judge for his alleged lack of impartiality. Other allegations of bias launched against Judge Engoron’s clerk led to angry reprimands from the bench and a gag order on the lawyers themselves.

“I’m sure the judge will rule against me, because he always rules against me,” Trump said at one point Monday.

Despite the aggressive attacks, experts told the BBC that Mr Trump’s legal team had failed to undermine the state’s case.

“The defense needs someone to get up there and justify these valuations,” Mr Rahmani said. “Accountants, CPAs, real estate experts, appraisers. And they just haven’t done that yet.”

At this point they face an uphill battle to save their case, analysts told the BBC.

“The reason they are in such a bad situation is that the judge has already found that the most important documents in this case were all false,” Mr Epner said. “As of now, the judge has also been presented with an enormous amount of evidence to show that they were deliberately false and provided with the intent to deceive.”

“Since they don’t have the ability to get into a Back to the Future DeLorean and turn back time,” Mr. Epner said of the defense team, “I can’t imagine what they can do to turn this case around.”

video caption,

Watch: Trump’s New York fraud case explained… in 60 seconds