Trump Family on Trial: The Fraud Case Explained
Image source: Pexels.com
Hi there, welcome to my blog! Today I want to talk about a very interesting topic: the Trump family on trial. You may have heard that the former president Donald Trump and his three adult children are facing a civil fraud lawsuit in New York. But what is this case all about? And what are the possible consequences for the Trumps? In this post, I will explain the main facts and arguments of the case, and share my personal opinion on it. Let’s get started!
What is the lawsuit about?
The lawsuit was filed by the New York attorney general Letitia James in September 2022. She accuses Trump, his sons Donald Jr and Eric, his daughter Ivanka, and several executives of the Trump Organization of using “false and misleading” financial statements to defraud lenders, insurers, and other entities. According to James, the Trumps inflated the value of their assets by billions of dollars to get better deals and pay less taxes. She claims that they did this for over a decade, from 2011 to 2021, and that they derived more than 200 false and misleading valuations of assets in 11 financial statements.
James is seeking at least $250 million in damages and penalties from the Trumps, as well as an order to ban them from serving as officers or directors of any New York company for 10 years. She also said that she has made referrals to federal law enforcement authorities for possible criminal charges.
How did the Trumps inflate their assets?
The lawsuit is based on a massive amount of documents and emails that James obtained from the Trump Organization and its accountants, Mazars USA, after a long legal battle. The documents show that the Trumps often used different sets of books for different purposes, and that they manipulated the value of their assets depending on the situation.
Example 1: Seven Springs estate
The lawsuit alleges that the Trumps inflated the value of their Seven Springs estate in Westchester County, New York, from $20 million to $291 million in different financial statements. They did this by claiming that the property had development potential for 24 luxury homes, even though they never obtained the necessary approvals from local authorities. They also claimed that the property had a conservation easement worth $21.1 million, even though they never donated it to a land trust. By doing this, they were able to get a $21.1 million tax deduction and a lower property tax assessment .
Example 2: Trump International Hotel and Tower in Chicago
Another example is the Trump International Hotel and Tower in Chicago, which the lawsuit claims was valued at $398 million in 2012, even though it had a negative cash flow of $3.7 million that year. The Trumps allegedly used this inflated value to secure a $160 million loan from Deutsche Bank, and to persuade Forbes magazine to rank Trump as one of the richest people in the world. However, in 2015, when the Trumps had to pay property taxes, they valued the same building at only $93 million, and claimed that it was worth even less due to the negative impact of Trump’s presidential campaign .
How did the Trumps defend themselves?
The Trumps have denied any wrongdoing and have accused James of being politically motivated and biased against them. They have also blamed their accountants and lawyers for any errors or discrepancies in their financial statements. They have argued that the financial statements were not audited or certified, and that they were only prepared for internal use or for preliminary discussions with potential partners. They have also claimed that the value of their assets is subjective and depends on various factors and assumptions .
What are the possible outcomes and implications?
The trial, which started on October 4, 2023, is expected to last for several weeks. The judge, Arthur Engoron, has already ruled that the documents prove that the Trumps lied about the value of their assets, and that the only question left is how much they should pay for their fraud. He has also issued a gag order to prevent the Trumps and their lawyers from making public comments about the case or the court staff, after Trump called the judge “a total disgrace” and “a political hack” in a statement.
The outcome of the trial could have serious consequences for the Trumps, both financially and legally. If they are found liable, they could face a hefty fine and a ban from running any New York business. They could also face criminal charges from federal prosecutors, who are reportedly investigating the Trump Organization for tax fraud, bank fraud, and insurance fraud. Moreover, the trial could damage their reputation and credibility, especially if they decide to run for office again in the future.
I hope you enjoyed reading this blog post and learned something new. Thank you for your time and attention!
0