Trump ‘False Denials’ in Fraud Suit Merit Sanctions, NY Says

(Bloomberg) -- New York’s attorney general said she will seek sanctions against former President Donald Trump, his three oldest children and their lawyers for making “demonstrably false” denials in response to the state’s $250 million fraud suit.

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Attorney General Letitia James said Tuesday in a letter to the court that the Trumps’ formal answer to the state’s suit was peppered with denials of basic facts, including some that the Trumps had previously stated themselves under oath.

“Defendants falsely deny facts they have admitted in other proceedings, they deny knowledge sufficient to respond to factual allegations that are plainly within their knowledge, and they propound affirmative defenses that have been repeatedly rejected by this Court as frivolous and without merit,” James wrote to Justice Arthur Engoron.

As an example, she noted that Trump denied he was an “inactive president” of the Trump Organization while he was in the White House, even though he described himself that way in an October 2021 deposition in a separate case.

James said she intended to file a motion to have improper denials deemed admissions and to have the Trumps and their lawyers sanctioned. She asked Engoron to schedule a hearing on the matter.

The potential fight over sanctions in the case comes less than two weeks after a federal judge who dismissed an unrelated suit Trump filed against Hillary Clinton and dozens of other people ordered the former president and his lawyer, Alina Habba, to pay nearly $1 million in legal fees and costs for filing a “frivolous” and politically motivated complaint.

Habba, who is also representing Trump in the New York case, declined to comment on James’s letter to the judge.

The New York lawsuit against Trump, Donald Trump Jr., Eric Trump, Ivanka Trump and the Trump Organization alleges they manipulated the value of key assets for years to deceive banks and insurers. They have all denied wrongdoing.

Though not a criminal case, it is one of the biggest legal threats facing the former president. In addition to seeking a $250 million penalty, James also aims to bar Trump and his three oldest children from ever operating a business in New York again.

The case is set to go to trial in October after their motion to dismiss the case was rejected by Engoron.

In addition to denying previously admitted facts, James said the Trumps were implausibly claiming not to be aware of certain key information.

“Donald J. Trump claims that he lacks sufficient information about the structure of his own companies,” including whether a primary Trump entity called DJT Holdings LLC is a Delaware-based company with operations in New York, James said. And Ivanka Trump denied knowing whether she “personally met with bankers, or whether she can confirm the contents of her own emails,” James said.

Engoron has already signaled that he’s open to sanctions against Trump’s lawyers. When the judge denied the Trumps’ motion to dismiss the suit, he said the lawyers had barely escaped being sanctioned for claiming the suit was part of a “witch hunt” after that argument had been rejected earlier in the case.

Despite that warning, Trump’s filing last week again said one potential defense is his argument that James “in her conduct and public statements has acted contrary to the ancient and customary norms that prescribe the manner in which prosecutors are expected to conduct themselves under the rule of law.”

James blasted that criticism, pointing out that all of Trump’s past claims that the case was politically motivated and conducted improperly had been been rejected by multiple courts.

“Mr. Trump, Eric Trump and Donald Trump Jr. again raise the contention that they are being improperly targeted for investigation,” the attorney general said.

(Updates with Trump’s lawyer declining to comment.)

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