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Politics


TRUMP'S CIVIL FRAUD TRIAL IN NEW YORK PUTS HIS FINANCES IN THE SPOTLIGHT. HERE'S
WHAT TO KNOW ABOUT THE CASE.

By Graham Kates

Updated on: October 2, 2023 / 7:28 PM / CBS News

 * 
 * 
 * 

Trump fraud trial underway in New York

Former President Donald Trump and New York Attorney General Letitia James have
for years been on a collision course, and it is now playing out in a courtroom
in lower Manhattan. 

Trump has long volleyed insults at James while her office investigated him and
his company — an investigation that ultimately led to her filing a $250 million
civil lawsuit accusing Trump and others at the Trump Organization of widespread
fraud. The trial stemming from that suit got underway Monday, and Trump is there
in the courtroom for opening statements.



Here's what to know about the case.

Click here to view related media.
click to expand


WHO ARE THE DEFENDANTS IN THE CASE?

Trump, three of his children — Donald Jr., Ivanka and Eric Trump — several other
company executives and the Trump Organization itself were sued in September 2022
by James. Her office accused them of perpetrating years of fraud, and vastly
overrepresenting both Trump's wealth and the values of many of his properties on
financial statements. 

This summer, a New York appeals court dismissed allegations related to Ivanka
Trump, ruling that they involved contracts from too long ago. The court did not
dismiss the allegations against the company, Trump, Donald Trump Jr., or Eric
Trump, allowing the claims against them to go to trial.


WHAT ARE THE ALLEGATIONS?

The Trumps and their company are accused of fraud, falsification of business
records, issuing false financial statements and conspiracy, among other
allegations. The attorney general has accused Trump of overstating his wealth by
billions of dollars, and the value of many properties by hundreds of millions,
while seeking loans. He has denied wrongdoing.

James' office is seeking $250 million and a slew of sanctions designed to
severely limit the Trumps' ability to do business in New York.

Because this is a civil lawsuit, not a criminal case, there is no possibility of
jail time. 



Separately, Trump is facing criminal charges in a case filed in April by
Manhattan District Attorney Alvin Bragg alleging 34 counts of felony
falsification of business records. Trump has pleaded not guilty.

An earlier criminal tax fraud case against the Trump Organization ended with
a guilty verdict last December and a plea deal by the company's former chief
financial officer, Allen Weisselberg. Trump was not personally charged in that
case.


WHAT HAPPENED ON MONDAY?

Both sides presented their sides of the case during opening arguments, with
Kevin Wallace leading the attorney general's team of attorneys and a host of
lawyers representing the various defendants.

Wallace said prosecutors intend to demonstrate that the defendants knowingly
submitted fraudulent financial statements. He said they would show that the
defendants had "the intent to defraud" when falsifying the records and conspired
to do so.

"The defendants knew that the statements were false. They then used them to
pursue and obtain financial benefits," Wallace said.



Chris Kise, an attorney for Trump, told the judge that the statements were "true
and accurate in all material respects." He said the defense has experts who can
attest to the accounting practices used to arrive at the valuations. Kise added
that the government's case relies on the testimony of a "serial liar," referring
to former Trump attorney Michael Cohen.


IS TRUMP ATTENDING THE TRIAL?

Trump arrived in court for opening statements Monday morning. He had said
he planned to attend at least the first day of the civil trial. Photographers
were briefly allowed in the courtroom and took pictures of him sitting at the
defense table alongside his attorneys:

Former President Donald Trump sits in a courtroom at New York Supreme Court,
Monday, Oct. 2, 2023. Seth Wenig / AP

"I'm going to Court tomorrow morning to fight for my name and reputation," he
posted Sunday night on his Truth Social platform.  "THIS WHOLE CASE IS SHAM!!!"
he wrote, lashing out at the prosecutor and judge. "See you in Court — Monday
morning."

Trump's intention was first revealed in a court filing related to a separate
case: Trump's lawsuit against his former lawyer and fixer, Michael Cohen. The
judge in that case noted that Trump had asked to postpone a scheduled Oct. 3
deposition because it would conflict with his plans to attend the first week of
this trial.




WHO IS THE JUDGE?

The judge presiding over this case is Arthur Engoron, who was first appointed by
then-Gov. Andrew Cuomo to the New York Supreme Court, 1st Judicial District, in
2013, after previously serving as a judge on New York City's civil court. A
Democrat, he ran unopposed for the position in 2015, and is serving a 14-year
term.

In April 2022, Engoron held Trump in contempt for refusing to turn over
documents James had subpoenaed, and imposed a fine of $10,000 a day. He also
repeatedly rejected attempts by Trump's attorneys to delay the trial date.

The upcoming proceedings are a bench trial, meaning there is no jury and Engoron
will ultimately decide if the defendants are liable, as well as any damages and
additional penalties.


HOW LONG WILL THE TRIAL BE?

The judge asked the attorneys involved to clear their calendars through Dec. 22.
However, the trial may not last that long.


WILL TRUMP TESTIFY? 

He might. Trump, Donald Trump Jr., Eric Trump and Ivanka Trump are all on
preliminary witness lists submitted to the court on Sept. 27. That does not
guarantee they will be called to testify. 




IS THE TRIAL BEING TELEVISED OR LIVESTREAMED?

New York state law does not allow cameras in the courtroom for most proceedings.
News organizations asked the judge to allow coverage of opening statements in
this case, but the judge denied that request in court on Monday. He did allow a
handful of still photographers to enter the courtroom to take photos.


DIDN'T THE JUDGE JUST RULE ON THESE FRAUD ALLEGATIONS?

Ahead of the trial, on Sept. 26, Engoron issued a ruling finding that Trump
overvalued the properties by hundreds of millions of dollars — and
misrepresented his own worth by billions — while pursuing bank loans. Engoron's
ruling was in response to a motion by James' office asking him to rule on
certain allegations before the trial, which will now focus on other allegations
in the lawsuit related to falsification of business records, issuing false
financial statements, insurance fraud and conspiracy.

Engoron's ruling ordered the cancellation of Trump Organization business
certificates and for an independent receiver to dissolve some of Trump's
companies.


WHAT HAS TRUMP SAID?

Trump spoke to the media after arriving at court Monday, denying the fraud
allegations and saying, "What we have here is an attempt to hurt me in an
election."

Trump calls prosecutor racist, says he's the victim in courthouse remarks before
fraud trial


On his social media site, Trump has called Engoron a "political hack" and a
"deranged, Trump hating judge." He has for years maligned James and the
investigation, accusing her of pursuing him for political gain. 

Trump even sued James in December 2021 in an effort to halt her investigation
before its conclusion. On a phone call with CBS News at the time, he called
James' investigation "unconstitutional" and himself an "aggrieved and innocent
party." The lawsuit was later dismissed.


WHO IS LETITIA JAMES?

Letitia James, a Democrat, has won election twice as New York attorney general.
She took office on Jan. 1, 2019. Before that, she served as New York City public
advocate and spent almost a decade as a member of the city council.

James has a history of taking on powerful political figures. An August 2021
report compiled by independent investigators working for her office alleged a
pattern of sexual harassment by then-Governor Andrew Cuomo and led to his
resignation.

Her investigation in this case began in 2019 after Trump's former attorney and
"fixer," Michael Cohen, gave congressional testimony in which he said Trump
routinely lied about his wealth on loan, insurance and tax documents.




WHAT HAS JAMES SAID ABOUT THE FRAUD CASE?

"Claiming that you have money that you do not have does not amount to the art of
the deal, it's the art of the steal," James said at a news conference announcing
the lawsuit in Sept. 2022.

In a statement released Monday ahead of the trial, she said: "For years, Donald
Trump falsely inflated his net worth to enrich himself and cheat the system. ...
No matter how rich or powerful you are, there are not two sets of laws for
people in this country. The rule of law must apply equally to everyone, and it
is my responsibility to make sure that it does."


WHAT HAS TRUMP'S LEGAL TEAM SAID?

Trump attorney Christopher Kise has argued that what the attorney general calls
overvaluations are actually examples of Trump's "genius," arguing in court that
Trump is "a master at finding value where others see nothing." 


WHAT HAS JUDGE ENGORON SAID?

Engoron has not spoken publicly about the case, but he was unsparing in his
pretrial fraud ruling. In the ruling, which rejected Kise's argument, he decried
the "defendants' obstreperous conduct" and "their continued reliance on bogus
arguments," writing that some of their arguments represented "a fantasy world,
not the real world."


TRUMP INVESTIGATIONS

More
Trump's civil fraud trial begins in New York as both sides lay out case
Trump's civil fraud trial puts his finances in the spotlight. Here's what to
know.
Judge rejects bid by 3 Trump co-defendants in Georgia case to move trials
Georgia RICO defendant is first in Trump election case to take plea deal
Court denies bid by ex-DOJ official Jeffrey Clark to move 2020 election case
More
   In:
 * The Trump Organization
 * Fraud
 * Donald Trump
 * Letitia James
 * New York

Graham Kates

Graham Kates is an investigative reporter covering criminal justice, privacy
issues and information security for CBS News Digital. Contact Graham at
KatesG@cbsnews.com or grahamkates@protonmail.com


Read More

First published on October 2, 2023 / 5:00 AM

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