Trump glowers as he appears in court on day one of blockbuster civil fraud trial

The former president sat with his attorneys for hours on the first day of a months-long trial that could deal a critical blow to his business interests

Alex Woodward
inside New York Supreme Court in Manhattan
Monday 02 October 2023 21:09 BST
Donald Trump appears in court as civil fraud trial begins in New York

Former president Donald Trump leaned forward in his chair while staring at the front of a courtroom in downtown Manhattan as a judge slowly and deliberately outlined the stakes of a trial stemming from a multi-million dollar lawsuit against him.

The former president – wearing a dark blue suit and light blue tie – slowly walked towards the defence table when he entered yet another New York courtroom on 2 October.

He sat beside his attorneys to begin the first day of a trial expected to stretch until three days before Christmas, as a team with the office of New York Attorney General Letitia James argued that the former president, his adult sons and chief associates defrauded banks and insurers by overvaluing properties by billions dollars to fraudulently obtain benefits based on his grossly exaggerated net worth and assets.

Last week, New York Supreme Court Judge Arthur Engoron determined that no trial was necessary to determine that Mr Trump’s financial statements were fraudulent, allowing a bench trial to move forward that will address six other claims in Ms James’s blockbuster lawsuit. None of the parties asked for a jury trial, according to the judge.

Mr Trump has spent decades navigating legal threats that would reveal his alleged reputation as a fraud, but a brutal 35-page decision from Judge Engoron – if allowed to stand – could threaten to dismantle his business interests in the state.

The remaining, unresolved counts from Ms James’s lawsuit to be determined at trial allege that Mr Trump and the defendants illegally falsified business records and conspired to make them; issued false financial statements and committed conspiracy to issue them; insurance fraud; and conspiracy to commit insurance fraud.

“Each of the defendants participated in that fraud,” according to Kevin Wallace, senior enforcement counsel with the Division of Economic Justice under the attorney general. Plaintiffs allege that “repeated, persistent and illegal acts” – combined with the fraud established under the judge’s order – should mean that Mr Trump and his business allies should be barred from commercial real estate transactions, borrowing from New York banks, among other sanctions.

Both sides have offered up long lists of potential witnesses for the trial, including Mr Trump and his adult children. Their attorneys said they are expected to testify.

Donald Trump, centre, appears in court on 2 October with his attorneys Christopher Kise, left, and Alina Haba, right.
Donald Trump, centre, appears in court on 2 October with his attorneys Christopher Kise, left, and Alina Haba, right. (POOL/AFP via Getty Images)

Monday marked Mr Trump’s second time inside a Manhattan courtroom in recent months, after he was criminally charged in a case surrounding so-called hush-money payments to an adult film star in the leadup to the 2016 election in an alleged effort to quash compromising stories of his affairs.

This time, Mr Trump sat for several hours, intently listening to his attorneys speaking to the judge or in his ear, with his arms crossed or while leaning forward in his chair. Before entering the court, he spoke to the dozens of cameras on either side of a short hallway near the door to proclaim his innocence and rage against the case in front of him.

At the centre of the case are statements of financial condition that approximated Trumpworld’s assets and net worth, which the attorney general’s office argues were routinely inflated to secure and maintain lucrative financial benefits.

In opening arguments, counsel from the office of the attorney general played several clips from witness depositions taped months earlier, including a statement from former Trump attorney Michael Cohen, who stated that the goal of those statements “was to use each of the assets and increase its value in order to get to the end-result number.”

That number, he said, had to be the one that “Mr Trump wanted”.

New York Attorney General Letitia James enters Judge Arthur Engoron’s courtroom on 2 October.
New York Attorney General Letitia James enters Judge Arthur Engoron’s courtroom on 2 October. (EPA)

Christopher Kise, an attorney for Mr Trump, claimed that the trial arguments and evidence will show that the former president legitimately made his billions through his real estate investments as “one of the most successful and highly recognized brands in the world,” with “trophy properties, low debt” and an “exceptional operational track record.”

He stated that testimony from a bank officer will prove that Mr Trump was “overqualified” to receive favourable loans, rejecting arguments from the attorney general that he said show “somehow the defendants received access on terms they otherwise could not have obtained.”

Mr Trump’s “net worth far exceeded the minimum required” to receive those benefits, according to Mr Kise.

He claimed that the use of disclaimers that Mr Trump has defended – and which the judge rejected in his ruling – are not “intentional defrauding”.

“It’s simply the opinion of the owner of the property, and it’s up to [financial institutions] to do their own due diligence,” he said.

Donald Trump speaks to media on 2 October during a recess on the first day of a trail stemming from a fraud lawsuit from New York Attorney General Letitia James.
Donald Trump speaks to media on 2 October during a recess on the first day of a trail stemming from a fraud lawsuit from New York Attorney General Letitia James. (Getty Images)

“We are attacking a sitting president and two of his children and his employees for a [statement of financial condition] that is frankly worth less than what they are worth,” Trump attorney Alina Habba told the judge.

Echoing statements from the Trump family in the days after Judge Engoron’s ruling, she condemned one $18m valuation of the former president’s Mar-a-Lago estate in Florida by the assessor’s office and accused Ms James of conflating a tax assessment and a property’s “market value”.

Defendants will have “experts” show that the value of the former president’s resort property is well over $1bn, she said.

“The value is the value, and the value of anything … is what someone is willing to pay,” she said. “The Trump properties are ‘Mona Lisa’ properties. … That is not fraud. That is real estate.”

The defendants’ statements of financial condition were “disclaimed, it was under value … and the [attorney general] is setting a very dangerous precedent for all business owners in the state of New York,” Ms Habba told the judge.

A fleet of news trucks and camera crews were staged in front of the New York State Supreme Courthouse, surrounded by dozens of New York City Police Department officers and barricades forming a maze around the imposing Roman classical complex. Inside the court, several police and US Secret Service officers stood watch over the nine rows of seats and chairs lining the sides of the courtroom.

A small group of protesters briefly blocked traffic while waving signs and chanting “Trump lies all the time”.

In a statement before her arrival, Ms James argued that the former president “falsely inflated his net worth to enrich himself and cheat the system.”

“We won the foundation of our case last week and proved that his purported net worth has long been rooted in incredible fraud. In this country, there are consequences for this type of persistent fraud, and we look forward to demonstrating the full extent of his fraud and illegality during trial,” she said.

“No matter how rich or powerful you are, there are not two sets of laws for people in this country,” Ms James added. “The rule of law must apply equally to everyone, and it is my responsibility to make sure that it does.”

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