Trump valued holdings at 'whatever number' he picked, Michael Cohen testifies

By Jack Queen and Luc Cohen

NEW YORK (Reuters) -Donald Trump's former lawyer and fixer Michael Cohen testified on Tuesday that he manipulated the values of the former U.S. president's real estate properties to match "whatever number Mr. Trump told us."

Testifying as a key witness in New York Attorney General Letitia James' civil fraud case against Trump, Cohen said Trump tasked him and other former Trump Organization executives with doctoring financial statements to boost the value of the company's holdings and secure better real estate premiums.

"He would say, 'I'm actually not worth $4.5 billion, I'm really worth more like 6 (billion)," Cohen said, adding that Trump arrived at the valuations of his assets "arbitrarily."

Tuesday's testimony marked a highly anticipated reunion of the allies-turned-bitter-foes.

Trump initially leaned back in his chair with his arms folded and stared intently at Cohen as he testified, but spent most of the day hunched over the defendant's table, occasionally watching Cohen and speaking to his lawyers.

Cohen is expected to return to the witness stand on Wednesday for cross-examination by Trump's lawyers. Trump told reporters after exiting the courtroom that he would return on Wednesday as well.

Cohen testified that he and onetime Trump Organization chief financial officer Allen Weisselberg would mark up line items by hand using red ink in Trump's financial statements after the former president told them the numbers were too low.

The testimony came during the fourth week of a trial in New York state court in Manhattan stemming from a lawsuit that James, a Democrat, brought against Trump and his family company last September. The suit, which could break up Trump's business empire, alleges Trump inflated the value of his properties.

Trump, the frontrunner for the 2024 Republican presidential nomination, has denied wrongdoing and defended the valuations of his properties, saying the case is a "fraud" and a political witch hunt.

Speaking to reporters outside the courtroom when the trial ended for the day, Trump called Cohen a "disgraceful fellow."

"The witness is totally discredited already," Trump said.

James' civil suit is one of many legal woes Trump faces as he campaigns for the presidency. He has pleaded not guilty to four criminal indictments, including federal cases tied to efforts to overturn the results of the 2020 election and the removal of government documents from the White House.

COHEN SAYS HE LIED AT TRUMP'S DIRECTION

Cohen, who once said he would "take a bullet" for Trump, turned on his onetime boss in 2018, when he pleaded guilty to a campaign finance violation and lying to Congress about Trump's business dealings in Russia.

In an apparent effort to head off expected attacks by Trump's lawyers on Cohen's credibility, Colleen Faherty, a lawyer for the attorney general's office, began her questioning of Cohen by reviewing his criminal history. Cohen said he lied at Trump's direction.

Cohen began a three-year prison sentence in 2019 but was released to home confinement the following year during the coronavirus pandemic.

Prosecutors never accused Trump of criminal wrongdoing stemming from his business dealings with Russia.

During about a half hour of cross-examination on Tuesday, Cohen - a disbarred lawyer - rattled off case law to support an objection by the attorney general to a question by Trump lawyer Alina Habba.

"We can also go on to your favorite, United States vs. Nixon," Cohen said, referencing a landmark U.S. Supreme Court decision ordering former President Richard Nixon to hand over records related to the Watergate scandal.

Trump's appearance in court on Tuesday was his first after being fined $5,000 by Justice Arthur Engoron, the judge overseeing the case, for violating a gag order.

In September, before the trial began, Engoron found that Trump fraudulently inflated his net worth and ordered the dissolution of companies that control crown jewels of his real estate portfolio, including Trump Tower in Manhattan. That ruling is on hold while Trump appeals.

The trial largely concerns damages. James is seeking at least $250 million in fines, a permanent ban against Trump and his sons Donald Jr and Eric from running businesses in New York and a five-year commercial real estate ban against Trump and the Trump Organization.

(Reporting by Jack Queen; Writing by Jack Queen and Luc Cohen; Editing by Noeleen Walder, Nick Zieminski, Lisa Shumaker and Rod Nickel)