Trump Goes to Trial

Donald Trump appeared this morning for a trial in New York City on the civil fraud charges that were brought against him by Democratic Party activist Letitia James. Politico has an account of this morning’s activities.

This is an Alice In Wonderland trial, as judge Arthur Engoron issued an order last week finding Trump and others liable in fraud for providing documents to banks and insurance companies that inflated the value of his properties. Judge Engeron, who is, I believe, another Democratic Party activist, has already purported to put Trump and his companies out of business in New York. So what remains to be tried, beginning today? Further penalties, including up to $250 million, and a ban on Trump doing business in New York State.

As usual, Andy McCarthy has a good take on these events. Did Trump overstate values of properties in documents he supplied to others? Yes:

Engoron finds that, between 2014 and 2021, Trump and his co-defendants overvalued assets by between $812 million and $2.2 billion. And some of the whoppers are jaw-dropping. Trump overstated the 10,996 square feet of his Trump Tower apartment as 30,000 square feet — a 200% inflation that had him pegging its worth as $327 million, at a time when the highest sale for a comparable New York luxury triplex on record was $88 million. A Westchester golf club, appraised over the years at no more (and usually much less) than $56.6 million, was valued in Trump’s SFCs at between $261 million and $291 million — a mark-up of more than 400%. At his Aberdeen property, the Scottish authorities gave him authorization to develop 500 residential homes; Trump’s SFCs listed the number as 2,035, overstating value by £164 million. And so on.

Of course, no one suffered any harm as a result of these over-valuations. Banks don’t lend tens of millions of dollars on the basis of an itemization of net worth by the borrower. And to say that this is an instance of selective law enforcement is an understatement. I suppose in the last ten years, residents of New York State have supplied banks with statements of financial condition more than a million times. Based on my own experience, a considerable portion of these statements over-valued the borrower’s assets. Has New York’s Attorney General brought a comparable charge against a single New York resident, other than Donald Trump? I doubt it.

Further, while square footage obviously is fixed, the value of commercial real estate is not. Such values often can only be speculated about until a sale actually takes place. And real estate values are volatile: if you were to look at statements of net worth created by developers and owners of commercial real estate in, say, 2019, and compare them against market values for those properties today, you would find, with hindsight, that many or most had been significantly over-valued. And of all the participants in the commercial real estate market, developers’ measures of net worth are the most slippery.

Trump will be visiting several more courthouses in the months to come, as the Democrats try one legal ploy after another to try to bring him down. Or, perhaps, to assure him of the Republican presidential nomination, which looks, at this point, like a more plausible motive. Certainly the current civil case won’t do anything to dent Trump’s popularity among Republicans. Whether the criminal trials to come will have any greater effect remains to be seen.

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