In a bombshell development in the high-stakes civil fraud trial threatening former President Donald Trump’s business empire, Donald Trump Jr. testified on Wednesday that he never worked on his father’s contested financial statements that grossly inflated the Trump Organization’s assets.
The explosive revelation came as Donald Trump Jr. took the stand in the New York State Supreme Court trial examining whether the Trump family business engaged in years of fraudulent practices by exaggerating Trump’s net worth to secure loans and insurance coverage on favorable terms.
Prosecutors allege the former president and other Trump Organization executives repeatedly misstated asset valuations across the annual statements of financial condition from 2011 to 2021 to deceive lenders into advancing loans and underwriters into issuing policies on extremely favorable terms.
But Donald Trump Jr. stated under oath that he had “no specific knowledge or involvement whatsoever” with the preparation of the financial statements now central to the case. As executive vice president of the Trump Organization and trustee of a trust holding its assets during his father’s presidency, Donald Jr.’s denial of participating in or even reviewing the documents raises serious questions.
At Least One Financial Statement Stated Trustees “Are Responsible”
Significantly, Donald Trump Jr. acknowledged that he served as a trustee for the trust that controlled the former president’s company while he was in office. The trust arrangement was set up to address conflict-of-interest concerns.
At least one of the contested financial statements contained language stating the trustees “are responsible for” the document, which experts say indicates legal accountability. But Donald Jr. insisted he had no actual input.
“I was a trustee in name only. I did not work on, was not involved in, and did not approve any of the statements,” Donald Jr. testified.
The eyebrow-raising testimony suggests Donald Jr. and other Trump Organization leaders may point fingers at Allen Weisselberg, the indicted former chief financial officer who prepared the financial documents.
But as a legally empowered trustee, Donald Jr.’s denial of knowledge could still land him in hot water. The case’s outcome is far from certain.
Lawsuit Hinges on Whether Trump Inflated Net Worth
At the heart of the case are allegations that Donald Trump habitually exaggerated his net worth to lenders to secure hundreds of millions in loans and insurance policies for his properties.
Former Trump Organization CFO Allen Weisselberg already pleaded guilty to hatching a 15-year tax fraud scheme involving off-the-books compensation. Now he and the Trump family stand accused of lying about Trump’s riches to cheat the system.
The lawsuit alleges that Trump claimed inflated valuations of over $3 billion for marquee assets like golf courses and his Manhattan triplex apartment. Prosecutors say he embellished his liquidity and omitted hundreds of millions in unsavory loans.
“The statements were greatly exaggerated, grossly inflated, objectively false, and therefore fraudulent and illegal,” New York Attorney General Letitia James asserted. “Mr. Trump and his children falsely inflated their net worth to unlawfully enrich themselves.”
Trump attorneys dismiss the case as a political witch hunt. Donald Trump Jr.’s testimony seeks to shift blame onto Allen Weisselberg while absolving himself of responsibility.
Donald Trump Jr., Eric Trump Implicated in Alleged Fraud Scheme
While Donald Trump Jr. downplayed his participation, his brother Eric Trump and Weisselberg have already faced questioning under oath during the bombastic trial.
The defendants also include Seven Springs LLC, which owned a suburban estate that Trump valued at over $290 million — more than twice the IRS estimate just one year prior. Lenders pumped over $100 million into the property based on the inflated valuations.
Prosecutors slammed the former president and his associates for “numerous acts of fraud and misrepresentation” in cahoots with the Trump children to grossly exaggerate their wealth. The Trumps deny all allegations of unlawful conduct, painting the case as a political farce engineered by Democrats like Letitia James.
But the risks are profoundly real. If found liable for financial fraud, the Trump Organization faces potentially massive fines and Donald Trump himself could be barred from doing business in New York State. The implications would be far-reaching, possibly sinking his company’s chances of making a presidential bid comeback.
Trump Attorneys Downplay Lawsuit’s Threat
For their part, Trump attorneys say the lawsuit is all bark and no bite. They contend discrepancies in financial estimates are normal, assessments are subjective, and reasonable parties can differ on valuations.
Describing the case as trivial, Trump lawyer Alina Habba argued “disagreements over valuation” do not equate to “fraud.”
They say prosecution witness Mazars USA LLP surrendered documents under political pressure that auditors understood were mere opinions on which reasonable people can disagree. And no banks lost money or dealt with Trump in bad faith based on 40 years of successful business together.
But Attorney General James said just because the banks have not openly complained does not excuse clear financial duplicity. She emphasized that no organization is above the law.
Trump Denies any Intent to Mislead
On October 19th, Donald Trump himself is slated to testify in what could be dramatic courtroom fireworks. The former president will likely look to prove that any exaggerated claims were intended to show his brand power, not defraud or induce undeserved favors.
Trump insists the values in the statements were simply his own estimates, not hard appraisals. His lawyers say Trump deserves leeway as a famous magnate and define estimates as opinions, not binding declarations.
Legal experts say Trump faces challenges explaining away emails showing Trump Organization finance personnel openly discussing inflating valuations specifically for the financial statements. But Trump often dismisses incriminating evidence as “fake news” and denies intent to mislead.
The trial’s outcome rests on whether prosecutors can definitively prove he deliberately falsified financials to gain unfair advantage and knew the numbers were false. If not, Trump may slip the hook yet again through his mastery of advancing alternative facts.
High Stakes Lawsuit Threatens Trump Organization
All eyes are fixed on the headline-grabbing trial as Donald Trump floats a potential 2024 presidential run. The former president seems determined to keep his family business intact to help fund a reelection bid.
For the Trump Organization, the stakes are sky-high. Penalties could destroy the company’s ability to borrow capital for deals or even operate in New York at all if a far-reaching ban is ordered.
For Donald Trump himself, being found personally complicit in years of financial fraud would deal a devastating blow to his image and political aspirations. Prosecutors could bar him from entering contracts in New York for years.
But Trump is notoriously resilient and experts say he will likely barnstorm supporters to paint the trial as a partisan farce. He has survived lawsuits, impeachment and the Jan. 6th commission thus far. This time, the final verdict remains uncertain.
Yet if prosecutors decisively prove systemic financial fraud under Trump’s watch, the former president’s business and political future may finally be in genuine jeopardy.
Stay tuned to our publication as the gripping Trump Organization fraud trial continues. No matter the outcome, this historic legal battle promises to reshape the Trump family legacy and business dealings for years to come. We will keep you updated on all key developments.
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