New York's attorney general seeks $370m from Donald Trump and co-defendants in new fraud case

Donald Trump (L) and New York State attorney-general Letitia James (R).
Donald Trump (L) and New York State attorney-general Letitia James (R). Photo credit: Getty Images/Reuters.


The New York attorney general is seeking more than $370 million from Donald Trump and his co-defendants and to bar the former president from doing business in the state, according to a post-trial brief filed Friday in Trump's civil fraud trial.

New York Attorney General Letitia James argued that Trump and his co-defendants' intent to defraud while preparing the former president's financial statements was "inescapable," seeking the repayment of $370 million in disgorgement, or "ill-gotten gains" – a dramatic increase over the original figure of $250 million.

"The myriad deceptive schemes they employed to inflate asset values and conceal facts were so outrageous that they belie innocent explanation," the attorney general wrote.

Judge Arthur Engoron has already ruled in a summary judgment ruling finding that Trump and his co-defendants were liable for persistent and repeated fraud. He also ordered the cancellation of Trump's business certificates in New York. Trump has appealed that decision and the court has paused dissolving the companies.

The attorney general is also asking for a five-year ban for Donald Trump Jr. and Eric Trump.

Trump's attorneys on Friday argued that Engoron should reject the allegations against Trump, writing in their briefs that most of the transactions in the attorney general's complaint were beyond the statute of limitations, that Trump's statements of financial condition did not contain material misstatements, and that the attorney general did not demonstrate any real-world impact.

"There is no evidence in the record that the terms or pricing of any of the subject loans would have been different based on the purported misstatements alleged by Plaintiff," Trump's lawyers wrote. "Not a single witness from any bank (or anywhere else) testified to this at trial."

The post-trial briefs filed Friday set the stage for closing arguments before Engoron next week. The judge could issue his ruling as soon as later this month.

Engoron has already rejected several of the arguments from Trump's attorneys, including challenges to the statute of limitations and disgorgement, finding that both were legally appropriate.

The 11-week trial was conducted to determine how much the Trumps and their company must pay and the fate of the former president's business in New York. The attorney general's office sought to prove six additional claims against Trump, including conspiracy, issuing false financial statements, falsifying business records, and insurance fraud.

If Trump's attorneys had hoped their arguments during the trial had swayed the judge to change course from his initial ruling, Engoron made clear he was unconvinced last month in a scathing denial of the former president's attempt to toss the case.

In the three-page opinion denying the motion for a directed verdict to dismiss the case, Engoron wrote that the experts called at trial by Trump's attorneys were not credible and that the defense's key arguments were unconvincing.

Trump's attorneys made clear repeatedly at the trial they plan to appeal Engoron's ruling, on top of the appeal that's already been filed after his summary judgment decision.

'Reaped hundreds of millions'

The briefs filed Friday offered a summary of the fights that have played out inside the courtroom since the trial began in October.

The attorney general's office reiterated its allegations that the defendants "reaped hundreds of millions of dollars in ill-gotten gains through their unlawful conduct."

Initially the attorney general's office sought more than $250 million in disgorgement, but the AG raised that significantly, arguing Trump saved $168 million from favorable interest rates and made $60 million in profit from its license of the Ferry Point golf course and nearly $140 million in total profit from the sale of its lease for the Old Post Office building, Trump's hotel in Washington DC.

The attorney general's office said Trump, as owner of the company, had a "financial motive to defraud."

Pointing to Trump's own testimony, which the attorney general's office argued wasn't credible, the lawyers noted that Trump professed to "know more about real estate than other people," which the attorney general said made it, "implausible he lacked peculiar knowledge of his own assets."

The attorney general alleged that Trump would have been short on cash while he was president, from 2017 to 2020, had it not been from the lower interest rates he paid relying on fraudulent financial statements.

After removing $16.5 million in cash held in a partnership with Vornado, which Trump did not have control over, from Trump's financial statements, the attorney general's office said, "Trump would have been in a negative cash position without the $73,811,815 saved through reduced interest payments."

The attorney general wrote that Trump used the additional capital he had to invest in a number of projects – including his 2016 presidential campaign.

Trump's lawyers argued that the attorney general failed to prove that Trump had any intent to defraud, saying he reviewed his financial statements but was minimally involved in their preparation and did not think they were important.

Michael Cohen, Trump's former lawyer and fixer, was the only witness called to prove intent, Trump's lawyers wrote, arguing his testimony should be disregarded.

"Testimony from Michael Cohen, who NYAG considered the linchpin of her case, must be disregarded, as he admitted to perjury on the stand," Trump's lawyers wrote. "Cohen's uncorroborated testimony that President Trump 'speaks like a mob boss' and 'tells you what he wants without specifically telling you' does not support a finding of conspiracy."

In their legal briefs, Trump's lawyers also argued that the attorney general did not prove there were "material misstatements" in Trump's financial statements. Trump's attorneys argued that Trump would have qualified for the rates he received even with a lower net worth, and that the attorney general "failed to elicit any testimony reflecting that the banks would have pursued a different course of action had they known of the alleged inaccuracies in the SFCs."

Engoron, however, suggested he was unconvinced by that argument in his opinion last month, saying the attorney general's expert testimony that Trump was liable for disgorgement was credible.

"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," Engoron wrote.

AG seeks five-year ban for Trump's sons

In addition to barring the former president from doing business in New York, the attorney general is asking for a five-year ban for Donald Trump Jr. and Eric Trump.

In a separate briefing, attorneys for Trump's sons wrote that Engoron should dismiss the claims against Eric Trump and Donald Trump Jr., arguing that no witness testified that either of Trump's eldest sons "had anything more than a peripheral knowledge or involvement in the creation, preparation, or use of any of the Statements of Financial Condition."

The attorney general argued that Trump's sons were involved in the valuations of specific properties and took "direct control" of preparing the statements of financial condition in 2021.

The attorney general pointed to steps the Trump sons took, including retaining the accounting firm Whitley Penn, signing the final representation letter and supervising former Trump Org. controller Jeff McConney, another codefendant in the case.

McConney testified that he consulted Eric Trump on certain valuations for Donald Trump's financial statements, which was also apparent in company emails between the two shown at trial. Eric testified at trial that he didn't know the information would be used for his father's personal financial statements.