Trump’s NY Fraud Trial Wraps Up. Here Are the Highlights

Erik Larson and Patricia Hurtado
·5 min read
33
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

(Bloomberg) -- New York state’s civil fraud trial against Donald Trump has gone on hiatus for the rest of the year, with the judge set to potentially return a verdict just as the first presidential nominating contests kick off in January.

Most Read from Bloomberg

Justice Arthur Engoron in Manhattan heard from the final witness Wednesday after more than 10 weeks of testimony. The trial will resume Jan. 11 with closing arguments, after which Engoron will decide the verdict without a jury.

“I wish you all a happy holiday season, and see you next year,” Engoron said as Trump attorney Alina Habba waved goodbye and another Trump lawyer, Chris Kise, shook hands with New York Attorney General Letitia James, who filed the suit.

The trial, one of six Trump faces as he campaigns to return to the White House, will wrap up days before the primary season kicks off with the Jan. 15 Iowa caucuses and the New Hampshire primary on Jan. 23. The front-runner for the GOP nomination will have a short reprieve before the start of his next trial on Jan. 16, in a $10 million defamation suit brought by writer E. Jean Carroll.

In the civil fraud case, James alleges Trump inflated the value of his assets by billions of dollars a year to get better terms on loans from Deutsche Bank AG and other lenders, reaping $250 million in illegal profit. He denies wrongdoing and says the case is part of a “witch hunt.”

Engoron found Trump liable for fraud on the eve of the trial, resolving the biggest claim in the case and putting Trump’s control of some assets at risk. Six claims remain, including conspiracy and falsifying business records. Penalties could include disgorgement of $250 million and a ban on the former president, 77, and his sons from serving as officers of any New York-based company.

Here are highlights of the trial:

The State

  • Documents showed that Trump wanted to move up on the Forbes billionaires list, allegedly by fudging numbers to make him appear wealthier.

  • Former Mazars USA LLP accountant Donald Bender told the court he learned in 2021 that Trump had withheld internal appraisals of his properties that conflicted with what he reported to Mazars. Bender said he wouldn’t have signed off on the financial statements if he had known.

  • Trump’s onetime lawyer Michael Cohen, a star witness for the state, testified that Trump would speak like a mob boss when asking Cohen to help “reverse engineer” his net worth to meet an inflated number.

  • Trump, called to the witness stand by New York, spent most of his time under oath clashing with the judge and the lawyer for the state while downplaying the significance of the personal financial statements at the center of the case. But he conceded he reviewed the documents.

  • Donald Trump Jr. testified that he never helped prepare the statements, even though they said trustees like him would have been responsible. He said he relied on Mazars to verify the documents’ accuracy. Eric Trump testified similarly, saying he was too busy with the big picture to focus on the records, even though he signed off on them.

  • Jeffrey McConney, who joined the Trump Organization in 1987, testified that in calculating the former president’s net worth, he regularly included fake mansions and valued rent-stabilized apartments at market rate.

  • James “Nicholas” Haigh, a former Deutsche Bank risk manager, testified that he made decisions on hundreds of millions of dollars in loans to Trump for years based partly on the financial statements, saying he assumed they were “broadly accurate.” He didn’t weigh in on whether he thought Trump misled him.

The Defense

  • The first defense witness was Donald Trump Jr., who returned to the stand to deliver an hours-long history of the Trump Organization, heaping praise on his father and his “genius” for real estate. Aided by a glossy PowerPoint presentation, he described his father’s properties as “spectacular,” “world class” and even “sexy.”

  • Deutsche Bank executive David Williams testified that it’s “atypical but not entirely unusual” for the bank to slash the stated net wealth of a proposed client by 50% and approve a loan anyway, as it did with Trump. The defense used the testimony to bolster its argument that no banks were harmed by Trump’s asset valuations, even if they were inflated.

  • Rosemary Vrablic, who worked with wealthy clients of Deutsche Bank from 2006 to 2020, testified about her efforts to land Trump, referred to internally as a “whale” for his riches. Her testimony showed how banks were eager for his business regardless of possible valuation discrepancies.

  • Eli Bartov, a prominent accounting professor who was paid $1,350 an hour to work on Trump’s defense, hailed his financial records for hours under oath while blasting the state’s case as “absurd.” He said he found no evidence of fraud in the records and testified that in his view Deutsche Bank knew what it was doing.

  • Trump had been scheduled to testify in his defense on Dec. 11 but backed out with less than 24 hours to go. His lawyer said in a statement that Trump had “nothing more to say.”

  • Kise repeatedly sought to undermine the legitimacy of the state’s final witness, professor Eric Lewis, who testified as an expert on accounting. Kise ridiculed Lewis on the stand during the last day of testimony, saying he had no real-world experience in accounting, and reading aloud negative comments about him posted online by students.

The case is New York v. Trump, 452564/2022, New York State Supreme Court (Manhattan).

(Updates with final witness being dismissed and with last bullet point. An earlier version of this story corrected the start date of the Carroll trial in the fourth paragraph.)

Most Read from Bloomberg Businessweek

©2023 Bloomberg L.P.