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Former President Donald Trump and his family’s sprawling business empire will stand trial starting Monday in a civil fraud case brought by New York Attorney General Letitia James. The high-stakes lawsuit alleges Trump grossly inflated his net worth by billions to gain financial advantages.
The trial’s outcome could deal a devastating blow to the Trump Organization if the former president is found guilty of widespread financial misconduct. Trump himself is expected to attend at least some of the proceedings, taking a break from his 2024 campaign.
AG James Seeking Steep Penalties After Prevailing in Pre-Trial Ruling
Last week, Justice Arthur Engoron issued a damning pre-trial ruling that held Trump liable for fraud and misrepresentation. Engoron wrote that Trump “demonstrated propensity to engage in persistent fraud” through years of fabricating financial statements.
This sets the stage for penalties to be levied after trial. James is seeking over $250 million in fines, plus a permanent ban on Trump and his sons, Donald Jr. and Eric, from conducting business in New York state.
Her proposed injunction would also bar Trump from commercial real estate acquisitions for five years. If granted, these penalties could critically impair the Trump Organization’s operations and cut off growth opportunities.
“We have proven our case. Trump’s reign of misrepresentation ends here,” James said in a statement following Engoron’s liability ruling. Her office alleges Trump habitually exaggerated valuations to gain unfair economic advantages.
Trump Denies Wrongdoing, Blasts Case as Political Hit Job
The former president has strongly denied allegations of fraud, with his lawyers calling the matter a political “witch hunt.” Trump claims James, a Democrat, engineered the civil lawsuit to damage his business for partisan gain.
“Another Witch Hunt by a racist Attorney General in New York,” Trump wrote on Truth Social, referencing James’ 2018 campaign comments about investigating Trump.
But Justice Engoron maintained the case is strictly about Trump’s conduct as a businessman, not politics. The bench trial will focus on evidence and expert analysis of whether fraud actually occurred.
“This case is not about politics. Donald Trump brought this case on himself, period,” said James. Her office states the lawsuit aims to hold Trump accountable for breaking laws, not for being a political foe.
How Trump Allegedly Inflated Property Values
The civil complaint lays out numerous instances where Trump exaggerated valuations to mislead lenders and insurers for gain. Examples include:
- Claiming his Trump Tower triplex was 30,000 square feet when it was actually 10,996 square feet. Trump tripled the apartment’s true size to overvalue it.
- Valuing his Mar-a-Lago resort as high as $739 million but deed restrictions capped its value at $28 million. He used inflated figures to obtain loans.
- Adding 10 fictional “estate homes” worth $161 million to 12 Trump golf clubs’ valuations to appear more valuable as collateral.
- Overstating square footage and amenity figures to make properties seem more profitable than they were.
“Trump claimed fantasy valuations, as high as necessary to win business and financing,” said Attorney General James. Prosecutors say these practices amounted to flagrant, repeated fraud.
Potentially Severe Consequences If Trump Loses
Based on Justice Engoron’s liability finding, the penalties James proposed could profoundly impact Trump’s business dealings. He could permanently lose his New York real estate empire and family charity.
“Canceling the Trump Organization’s corporate certificates means their dissolution. Appointing receivers starts that process,” said legal analyst Randy Shapiro. “This could remove Trump from power in his own company.”
Fines exceeding $250 million would also deal financial harm, as would five years of commercial real estate restrictions in New York. Trump’s brand and operations concentrate heavily in the state.
Favorable trial rulings for James could compound Trump’s other mounting legal woes. He currently faces criminal indictments in four separate cases, including for mishandling classified records.
But Trump remains defiant despite risks. Sources say he views surviving the suit as key to preserving his billionaire image and political brand ahead of a likely 2024 White House run.
Trial Expected to Run Through Early December
The civil trial before Judge Engoron is projected to last around two months. Trump and his two eldest sons are on the witness list alongside over 150 others. The defense plans to call its own experts to dispute claims of valuation inflation.
“It will be a battle of the experts, with each side presenting evidence to support their position,” said trial attorney Jessica Roth. “The jury will have complex financial analysis to weigh in determining if fraud really happened.”
While penalties await Judge Engoron’s post-trial order, the publicity of the case itself threatens to damage Trump’s standing. He faces exposure of his private business records and shady practices described in court.
“Even without huge fines, Trump’s reputation takes a hit from weeks of fraud accusations,” said political strategist Hank Sheinkopf. “It could make lenders warier of trusting Trump’s word going forward.”
The trial’s outcome will also set boundaries around what Trump can claim about his net worth, which forms his celebrity image and underpins his political clout.
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