Appellate judges skeptical of New York civil fraud case against Trump
By: Jack Queen and Luc Cohen
Good news......................
S E E D E D C O N T E N T
NEW YORK (Reuters) -Appeals court judges signaled skepticism on Thursday toward the civil fraud case brought by New York state against Donald Trump as the former president asked them to toss a nearly half-billion dollar judgment against him over real estate business practices that a judge declared fraudulent.
Justice Arthur Engoron in February ordered Trump, the Republican candidate in the Nov. 5 U.S. presidential election, to pay $454.2 million in penalties and interest for inflating his net worth to dupe lenders and insurers into giving him better terms. The civil case was brought by New York state Attorney General Letitia James.
Members of the five-judge panel on the Appellate Division - the mid-level state appellate court hearing arguments in Trump's appeal - appeared concerned about possible overreach by James.
They asked what constraints applied to the law James cited in bringing the case - one that is typically used to go after fraudsters who target vulnerable consumers.
"How do we draw a line or at least put up guardrails? Justice John Higgitt asked.
Deputy Solicitor General Judith Vale, arguing for the state, said the statute - known as Executive Law 63(12) - is broadly aimed at stopping fraud and illegality, and was therefore appropriate in Trump's case.
Justice David Friedman pressed Vale on whether there was any precedent for the attorney general suing over transactions involving sophisticated parties where neither "lost any money."
"Every case that you cite involves damage to consumers, damage to the marketplace. ... We don't have anything like that here," Friedman said.
The case stemmed from Trump's leadership of his family real estate company, the Trump Organization, before he became president in 2017.
Trump's lawyer John Sauer told the judges that the case was brought too late and that it would be unfair to impose a "crippling financial penalty" for the former president's decades-old financial statements, which Engoron found were illegally inflated.
"This case involves a clear-cut violation of the statute of limitations and relevant case law," Sauer said.
Sauer also said that trial testimony showed that any discrepancies in Trump's net worth were irrelevant to his lenders.
"What is not disputed is the testimony that if the net worth had been as low as one million (dollars), the deal would've been exactly the same," Sauer said.
Sauer added that none of Trump's lenders and business partners were harmed by the discrepancies on the financial statements, an argument Trump's lawyers have made throughout the case.
"There were no victims, no complaints," Sauer said.
Two of the judges interrupted Vale's opening statement to ask if there were any other examples of the state suing over private business transactions between sophisticated parties under a law aimed at protecting market integrity.
"When risk is injected into the market, that does hurt the counterparties and it does hurt the market as a whole," Vale replied.
TRUMP'S EMPIRE
Engoron's ruling poses a threat to the business empire Trump has built over decades, which includes hotels, office buildings and golf courses around the world. With interest continuing to accrue, Trump now owes $478.3 million.
The case is one of a number of legal entanglements Trump has faced since leaving the White House in 2021. He owes nearly $90 million in federal civil penalties for defaming a writer who accused him of sexual abuse, and was convicted in May on criminal charges stemming from hush money paid to a porn star.
Trump has denied all wrongdoing and has said the cases were brought to interfere with his campaign. A Reuters/Ipsos poll on Tuesday showed Vice President Kamala Harris, the Democratic candidate, leading Trump 47%-40% nationwide, though the state-by-state results of the Electoral College determine the winner.
In a brief submitted in July to the Appellate Division, Trump's lawyers said that the financial statements he submitted to banks actually understated his wealth, and there was no indication that any of the lenders suffered losses.
The lawyers also accused James, a Democrat, of targeting a political adversary.
In September 2023, before a three-month trial with no jury, Engoron found Trump liable for lying about his asset values and net worth for a decade. The judge took particular issue with Trump's claim that his Manhattan penthouse apartment was 30,000 square feet (2,787 square meters), nearly three times its real size.
The trial focused solely on penalties. In addition to the financial penalties, Engoron banned Trump from serving in a top role at any New York company, or seeking loans from banks registered in the state, for three years.
Trump in April averted possible asset seizures in the case by posting a $175 million bond while he appeals.
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Finally, cooler heads without an agenda speak out. This was a ridiculous farce from the inception
It doesn't matter what these judges think.
Has no difference in the outcome.
These judges have no say in the matter whatsoever and will make no difference on the outcome whatsover.
It damn sure does.
Why do you think the article was written??
The article clearly states that Trump is appealing. Those judges opinions will be the ones which count.
Again, it damn sure could if they grant his appeal.
Well, the LAW states differently.
Where have you seen anyone espouse your view?
FFS Read. These are the appellate judges. You know, the ones considering the appeal? It has everything to do with it.
Oh well, if they rule in the con-man's favor, we know they were bribed.
The con-man appeals all the legitimate cases against him. If he wasn't guilty, he wouldn't have to delay.
Rule?
I thought you said their opinions didn't matter at all and would change nothing.
It makes no sense to bribe someone who can not effect the outcome.
Are you changing your earlier comments?
A conspiracy theory? Really? [deleted]
He nor his lawyers think he is guilty. That's why the appeal. No DELAY about it.
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There are ALWAYS conspiracy theories involving Trump coming from the left.
It matters a great deal. This trumped-up judgement is on the way to being overturned.
It really is going to make a difference.
It also makes no difference what the former 'president' says about it either because nothing he says is true.
They can be as skeptical as they want. Who cares?
If they rule in the former 'president' con-man's favor, I wonder how much they were bribed?
So now that you claim the judges opinion don't matter, and won't change anything, why would they be bribed?
That really doesn't add up.
I truly doubt they will since the case against Trump is solid as this hearing is proving. I think at best, his attorneys might get the amount of the judgement reduced but even that seems like a long shot. The attorneys aren't even contesting the facts, they're basically trying to convince the court that Duetsche bank was wearing a mini skirt, she was asking for it, and she liked getting lied to and taken advantage of and that there's really no victim here because the banks are just sluts so no harm, no foul. Thankfully the court isn't buying it.
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The thing is, despite what some here say, his attorneys KNOW HE IS GUILTY
So this is way different from the SC justices, like Ginni, I mean Clarence, and several others, who are bought and paid for. I get confused with so many actions against the former 'president' con-man convicted felon.
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I am watching the hearing live and the judges are just not having it...
Not having what?
No judge who wasn't bought and paid for would rule in the con-man's favor.
If they don't throw it out they will certainly lower the fines, like 70%.
Appellate courts usually take about 6 months to write up their decisions so the outcome might be anticlimatic
depending on the election.