OCTOBER 6, 2023
The Mar-a-Lago Club, home of former US President Donald Trump, is seen on April 3, 2023 in Palm Beach, Fla. – Giorgio Viera/AFP via Getty Images, FILE
Former President Donald Trump is on trial in New York in a $250 million lawsuit that could alter the personal fortune and real estate empire that helped propel Trump to the White House.
Trump, his sons Eric and Don Jr., and Trump Organization executives are accused by New York Attorney General Letitia James of engaging in a decade-long scheme in which they used “numerous acts of fraud and misrepresentation” to inflate Trump’s net worth while lowering his tax burden. The former president has denied all wrongdoing and his attorneys have argued that Trump’s alleged inflated valuations were a product of his business skill.
Latest Developments
Judge doesn’t stop trial, but pauses dissolving of Trump Org
A New York appellate judge declined pause Donald Trump’s ongoing fraud trial, after attorney’s for Trump sought a stay of the trail while they appeal Judge Engoron’s summary judgment ruling last week that decided the core of the case.
Judge Peter Moulton issued the ruling minutes after hearing oral arguments from both sides. While he did not pause the trial, he did stop the immediate cancellation of Trump’s business certificates that Engoron had ordered last week.
“This is everything owned or controlled by the defendant. Once you dissolve you dissolve,” defense attorney Christopher Kise argued in an afternoon hearing convened at the Appellate Division’s First Department. “It’s chaos. It’s chaos right now.”
The New York attorney general’s office balked at halting the trial.
“There’s just absolutely no basis for an interim stay of trial that’s already been going on for a week,” said Deputy Solicitor General Judy Vale. “It has been an enormous endeavor to get this off the ground.”
Trump’s defense insisted a pause was warranted given the magnitude of the potential consequences for Trump’s business.
“We’re not seeking delay. We’re seeking a fair trial,” Kise said.
Questioning of controller ends on dramatic note
Prosecutor Andrew Amer ended the afternoon dramatically, questioning longtime Trump Organization controller Jeff McConney about whether he had ever helped Trump Organization CFO Allen Weisselberg commit tax fraud.
McConney initially responded that he had not — prompting Amer to confront McConney with his testimony from the Trump Organization’s 2022 tax fraud trial, at which he testified the opposite.
Among other offenses, McConney testified during that trial that he processed a payroll check to Weisselberg’s wife so she could claim social security benefits.
“You engaged in this illegal conduct because Mr. Weisselberg was your boss and if you refused his requests, you would lose your job?” Amer asked.
“Yes,” McConney said.
The trial adjourned until Tuesday, when it’s scheduled to resume with the direct examination of Weisselberg.
This afternoon, an appellate court will take up Trump’s request to pause the trial while he appeals Judge Engoron’s summary judgment ruling last week that decided the core of the case.
Controller valued Mar-a-Lago at $500M despite deed restriction
Longtime Trump Organization controller Jeff McConney continued to value Trump’s Mar-a-Lago Club in excess of $500 million — on the basis that the property could be sold as private residences — despite knowing that Trump has signed a deed in 2002 with the National Trust for Historic Preservation exclusively limiting the property to being used as a club.
“Mr. Trump had deeded away his rights to use the property for any purpose other than a social club,” prosecutor Andrew Amer said while questioning McConney, who initially claimed he was unaware of the requirement but subsequently testified that he was aware of the 2002 deed.
Despite the requirement, McConney — according to Trump’s financial statements — valued Mar-a-Lago as if the property could be sold as individual residences, every year that he oversaw the statements, between 2011 and 2017.
Oct 6, 12:58 PM
Golf club’s purchase price was inflated to cover refunds
When the Trump Organization purchased their golf course in Jupiter, Florida, in 2013, they paid $5 million for the club, longtime Trump Organization controller Jeff McConney testified.
But when they put the property in their books, they listed the purchase price at $46 million, said McConney.
The $41 million jump in price was attributed to the potential that Trump would have to pay back the purported “refundable” fees paid by each of the club’s members, according to McConney.
While listing $46 million as the total purchase price, the Trump Organization failed to account for the $41 million dollars in fees on the liability side of the company’s books, said prosecutor Andrew Amer.
“Even if they do have to repay at some point in time, that is way out in the future, correct?” Amer asked, which McConney conceded was the case.
Trump valued housing units at twice their appraisal, says controller
In 2013, the Trump Organization increased the value of Trump National Golf Club Westchester in Briarcliff Manor, New York, based on the planned addition of 71 midrise housing units, prosecutor Andrew Amer said during his questioning of longtime Trump Organization controller Jeff McConney.
The company said the units, when built, would be worth $101 million — even though the company was given an appraisal by real estate firm Cushman & Wakefield that put the value of the units at $43.3 million, Amer said.
“The value remained the same in 2015, based on a telephone conversation that you had with Eric Trump on Nov. 17, 2015, where Eric Trump said to you, ‘Leave value as is,'” Amer asked McConney.
“Correct,” McConney answered.
“So notwithstanding that there was this appraisal, Eric Trump told you to leave the value as is?” Amer repeated.
“Correct,” McConney replied.
McConney also testified that at some point, he and former Trump Organization chief financial officer Allen Weisselberg added a 30% “brand premium” to the valuations of some of Trump’s golf properties.
AG says Trump’s request to pause trial would ‘sow chaos’
New York Attorney General Letitia James argued that Donald Trump’s legal team is trying to “sow chaos” by pausing the ongoing trial, and that a pause would risk creating a “cascade of delays” to Trump’s multiple legal matters, according to a letter filed by the AG after Trump sought to stay the proceedings.
“Defendants cannot come close to demonstrating that the equities or the merits favor the truly extraordinary relief of upending an ongoing trial midstream,” James wrote.
James argued that the request to pause the trial while awaiting the appeal of the judge’s partial summary judgment issued last week would be unreasonably disruptive to both parties and the witnesses scheduled to testify in the case.
“And tellingly, they waited until after Mr. Trump decided to stop attending the trial,” the letter said. “Defendants have thus sought to interrupt trial midcourse in a highly disruptive manner, and this Court should deny an interim stay on that basis alone.”
James also accused Trump’s legal team of attempting to “play one court against the other,” by pitting his civil matter against the schedule of Trump’s other pending cases.
The former president, over the next seven months, faces criminal trials in the Georgia election interference case, the federal election interference case, the New York hush money case, and the federal classified documents case.
Estate’s valuation included 7 mansions that weren’t yet built
When the Trump Organization valued its Seven Springs compound in New York’s Westchester County at $261 million, the company included seven mansions, estimated to be worth $23 million each, that had not been built, longtime Trump Organization controller Jeff McConney testified.
In contrast, an appraiser had said Seven Springs was worth $56 million, excluding development rights for the property, which hadn’t been awarded.
McConney testified that he did not factor into the valuation when, or whether, the homes would be built.
“You have treated, for the purposes of this valuation, a profit of $23 million per home as if it were realized immediately?” asked Andrew Amer with the New York attorney general’s office.
“Correct,” McConney said.
Amer said that Trump Organization VP Eric Trump, in a call with McConney the following year, instructed McConney to continue to value the seven mansions the same as he did in 2013.
McConney is testifying as a hostile witness since he is also a named defendant in the case. It gives Amer wider latitude in his examination, though defense attorneys have made several objections about leading questions.
The proceedings were briefly interrupted by the blaring of a horn that was audible in the courtroom, prompting Amer to interrupt his questioning and remark, “Someone is having a celebration.”
Judge Engoron, who has displayed a dry wit throughout the trial, responded, “Maybe they’re celebrating us.”
Trump wants trial paused while he appeals judge’s ruling
As expected, Trump’s lawyers have filed an application for an immediate pause of the ongoing trial, pending their appeal of Judge Engoron’s ruling granting partial summary judgment in the case last week.
Engoron, in last week’s ruling, ordered the cancellation of Trump’s business licenses in New York after finding that he had committed fraud in his business dealings.
In their application for a stay, Trump’s lawyers argue that Engoron’s order was “unprecedented,” incorrectly decided, and unfairly punitive.
Warning that the consequences of Engoron’s order would do “severe and irreparable harm” to not only defendant but also “innocent nonparties and employees who depend on the affected entities for their livelihoods,” the lawyers asked for an immediate pause of the trial.
“It is respectfully submitted that an immediate stay of enforcement of Supreme Court’s decision and order is necessary to prevent irreparable harm pending resolution of Appellants’ application to correct a grave miscarriage of justice,” the application says.
Trump withdraws lawsuit against judge
A week after an appeals court denied Trump’s request to halt the ongoing trial, the former president is withdrawing a suit he filed against Judge Arthur Engoron and New York Attorney General Letitia James.
Trump originally undertook the legal move to force the judge to either issue a ruling limiting the case against him or delay the trial.
The suit was discontinued without prejudice, according to a filing.
However, Trump’s legal team has told the court that it plans to file a new request for a stay of the trial, pending appeal, sometime today.
Trump Organization controller to resume testimony
Former Trump Organization controller Jeffrey McConney, a defendant in the case, is scheduled to return to the witness stand this morning for a half-day session of court.
Prosecutors are expected to continue to probe the Trump Organization’s internal procedures that resulted in the inflated values on Trump’s financial statements, including how the former president’s own Trump Tower penthouse grew in listed value from $80 million in 2011 to $327 million in 2016.
Judge Arthur Engoron already ruled last week that Trump overvalued the apartment by over $200 million based on the “false and misleading” claim that the residence was 30,000 square feet, rather than its actual size of 10,996 square feet.
When McConney asked Kathy Kaye, a Trump International Realty executive, for assistance valuing the residence in 2013, Kaye cited the penthouse’s ties to “celebrity” and its uniqueness as partial reasons to add $20 million to the apartment’s listed value, according to an email that was entered into evidence.
“I don’t see how one would list below 8K per sq foot at this point, which brings us to 240,000M … 200,000M is a safe estimate,” Kaye wrote in the email.
McConney also appeared to struggled to explain why he used asking prices, rather than the accepted practice of using sale prices, when valuing the penthouse.
The exchange prompted New York AG special counsel Andrew Amer to confront McConney with his testimony during a previous investigative interview, in which McConney said asking prices were a poor measure of value since “you can ask anything you want to.”
Courtesy: ABC News
