(photo by Jabin Botsford/The Washington Post via Getty Images)
If at first you don’t succeed, try, try again … so as to give the court maximum opportunity to dunk on you and say your arguments “personify frivolity.” That’s the Trump legal motto, and the family should definitely translate it into latin and put it on the next coat of arms they steal.
On Friday, defense lawyers in the former president’s civil fraud case in New York filed a fifth motion for directed verdict repeating again the same arguments they’ve been making for two years without success.
Trump never lied on his financial statements. Or if he lied, he had an “ironclad disclaimer clause” that immunized him from prosecution. And nobody was hurt by his fake finances, it’s a victimless crime. Anyway how can there be a “lie” about subjective valuations, it’s all vibes, man. Plus Michael Cohen is a liar, and the state has no authority to bring this case. Also, if the original loan is outside the statute of limitations, then all the annual statements of finance submitted to the lender are time-barred. So, please don’t murder the Trump Org?
Justice Arthur Engoron wasn’t persuaded the first 1,000 times Trump made these arguments, and he didn’t break his streak yesterday. Although, honestly he seemed a little bored with the whole thing.
“Valuations, as elucidated ad nauseum in this trial, can be based on different criteria analyzed in different ways. But a lie is still a lie,” he sighed. “Valuing occupied residences as if vacant, valuing restricted land as if unrestricted, valuing an apartment as if it were triple its actual size, valuing property many times the amount of concealed appraisals, valuing planned buildings as if completed and ready to rent, valuing golf courses with brand premium while claiming not to, and valuing restricted funds as cash, are not subjective differences of opinion, they are misstatements at best and fraud at worst.”
Luckily Trump gave the judge a little something to sink his teeth into in the form of two “expert” witnesses: NYU Professor Eli Bartov and former SEC accountant Jason Flemmons.
Bartov made news at the trial by first testifying that Trump’s financial statements were beautiful and perfect, and then admitting that he’d been paid almost $900,000 for his testimony.
“Bartov is a tenured professor, but all that his testimony proves is that for a million or so dollars, some experts will say whatever you want them to say,” the judge snarked, adding that “By doggedly attempting to justify every misstatement, Professor Bartov lost all credibility.”
The court also noted that the professor had suffered the same fate when he appeared before Justice Barry Ostrager of the New York State Supreme Court’s Commercial Division, who in 2019 found Bartov’s testimony to be “unpersuasive” and “flatly contradicted by the weight of the evidence.” (This also served as an unsubtle reminder that, while Trump has been agitating for two years to get this case transferred to the Commercial Division, his claims would probably have fared little better there.)
As to Flemmons, well …
Mr. Flemmons also, inexplicably, acknowledged that future income had to be discounted to present value on a financial statement, while at the same time stating there were no Generally Accepted Accounting Principles (“GAAP”) departures where defendants failed to apply a discount rate to future income. He opined that Mazars should have followed up on items in the SFCs but then stated, adamantly, that it would have been “highly unusual” for Mazars to make an inquiry for any appraisals in the client’s possession. He was reluctant to acknowledge that an asset controlled by a third-party cannot be considered “cash,” while also acknowledging that it was a “red flag.”
There was also some ominous rattling about disgorgement in a case where the state is asking for a $250 million fine.
“Disgorgement is the return of ‘ill-gotten gains,’” the judge lectured in response to Trump’s claim that no one was damaged, and thus a fine was inappropriate.
If you pay a lower interest rate on a loan by overstating the value of any of your assets, thus lowering the perceived risk to the lender, your gains are ill-gotten. The lender has lost money, although the loss is not out-of-pocket, and so the loss is not what the law traditionally thinks of as damages. That the instant lenders made millions of dollars and were happy with the transactions does not mean that they were not damaged by lending at lower
TL, DR? Hahahahaha, NOPE. Try your luck with the First Judicial Department.
Post-trial briefs are due January 5, with closing arguments scheduled for the 11th. After that …
Liz Dye lives in Baltimore where she writes the Law and Chaos Substack.