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Donald Trump’s civil fraud trial has kicked off in New York. Here’s what you need to know

October 3, 2023
in Science
Donald Trump’s civil fraud trial has kicked off in New York. Here’s what you need to know
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A civil fraud trial that could deal a major blow to Donald Trump’s real estate empire has begun, with a New York state lawyer accusing the former president of generating funds by lying and Trump describing the case as a “scam”.

Here is a look at the case brought by Democratic New York Attorney-General Letitia James against the frontrunner for the 2024 Republican presidential nomination.

What is Trump accused of?

Trump, his businesses and his two adult sons are accused of inflating assets by as much as $2.9 billion to $5.6 billion per year between 2011 and 2021 to save hundreds of millions of dollars on loans and insurance.

James’ office says Trump and his associates used incorrect figures for the sizes of his properties and false or highly unrealistic assumptions about their development potential to arrive at the inflated values.

The judge in the case, Justice Arthur Engoron, ruled on 26 September that James had proven Trump and his co-defendants fraudulently inflated his assets. That means the trial will largely concern how much they must pay in penalties.

What consequences could Trump face?

Trump does not face any criminal penalties in the civil case but could suffer substantial financial and business consequences.

James is seeking at least $390 million in penalties, a 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 Organisation.

What will happen to Trump’s business empire?

Engoron in his ruling ordered the cancellation of certificates that 10 of Trump’s business entities need to operate some of his marquee properties — including Trump Tower and his golf clubs in New York — and said he would appoint independent receivers to oversee their “dissolution.”

Former US President Donald Trump sitting next to his two eldest two sons and his attorney inside the State Supreme Court of New York.

Former President Donald Trump appears in State Supreme Court for a civil fraud trial against him, his eldest sons, their companies and the Trump Organization executives in Manhattan, in New York. Source: SIPA USA / Brendan McDermid

The full implications of that ruling on Trump’s opaque network of business holdings is not yet clear, but the trial could provide clarity over whether the assets at the centre of the dispute will be liquidated.

What has Trump said about the case?

Trump’s lawyers have disputed James’ figures, saying they are based on flawed accounting methods that fail to consider Trump’s “investment genius” in arriving at his own asset valuations.

Trump himself was dismissive of the allegations during a meandering deposition in April where he touted his achievements as president and distanced himself from day-to-day decision-making at his flagship Trump Organisation.

In a post on his Truth Social platform the day of the ruling, Trump called accusations that he committed fraud “ridiculous and untrue”, and blasted Engoron as a “DERANGED” judge.

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