Former U.S. President Donald Trump is facing a civil fraud trial in Manhattan that could have serious consequences for his business empire and his political future. The trial, which began on Monday, is expected to last for several weeks and will determine whether Trump and his sons inflated the value of their assets to secure loans and insurance.
Trump accused of lying about his net worth
The lawsuit was filed by New York Attorney General Letitia James, a Democrat, who alleges that Trump and his associates engaged in a “systematic pattern of fraud” from 2011 to 2021. According to James, Trump and his sons Donald Jr. and Eric lied about the value of their properties, golf courses, hotels, and other assets by billions of dollars to obtain favorable terms from lenders and insurers. James is seeking at least $250 million in fines, a permanent ban against Trump and his sons from running businesses in New York, and a five-year commercial real estate ban against Trump and the Trump Organization.
James’ office presented evidence on Monday that showed how Trump inflated the value of his assets by using different methods, such as adding phantom floors to buildings, claiming ownership of land he did not own, and omitting liabilities and expenses. For example, James’ attorney Kevin Wallace said that Trump claimed that his Seven Springs estate in Westchester County was worth $291 million in 2012, when it was actually worth only $56.5 million. Wallace also said that Trump claimed that he owned 2,000 acres of land in California, when he actually owned only 200 acres.
Trump denies wrongdoing and blames political motives
Trump attended the trial on Monday with his trademark glower and a retinue of secret service agents. He sat hunched over the defendant’s table and occasionally spoke to his lawyers as Wallace accused him of “lying year after year” in financial statements he provided to lenders and insurers. Trump’s lawyer Christopher Kise said during his opening statement that Trump’s valuations actually understated the value of his assets and were based on the business acumen that allowed him to build “one of the most successful real estate empires in the world.”
Trump has denied any wrongdoing and has accused James of pursuing a politically motivated witch hunt against him. He has also used his legal troubles as a fundraising tool for his presidential campaign, saying without evidence that Democrats are using sham court cases to prevent him from retaking the White House. Trump is the frontrunner for the 2024 Republican presidential nomination, according to polls.
Trump’s business empire in peril
The civil fraud trial is not the only legal challenge that Trump is facing. He has also been criminally charged in four states over various allegations, such as inciting the Jan. 6 insurrection at the U.S. Capitol, interfering with Georgia’s election results, mishandling classified documents, and paying hush money to a porn star. He has pleaded not guilty to all charges.
The civil fraud trial could have a significant impact on Trump’s business empire, which is already struggling due to the COVID-19 pandemic, public backlash, and debt repayments. Last week, Justice Arthur Engoron, who is presiding over the case, ruled that Trump committed fraud and canceled business certificates for companies that control some of his most valuable properties, such as Trump Tower and 40 Wall Street in Manhattan. Engoron said he would appoint receivers to oversee their dissolution.
The trial could also affect Trump’s ability to do business in New York, which is one of his main markets. If James succeeds in obtaining a permanent ban against Trump and his sons from running businesses in New York, it would effectively shut them out of the state’s lucrative real estate sector.
