Dem
51
GOP
49
In Sept. 2022, New York AG Letitia James filed a civil lawsuit against Donald Trump's business empire, claiming he defrauded banks and insurance companies by giving them false financial information. He inflated his net worth so that the companies would give him better deals. He also deflated the value of his properties so he could pay less property tax. She claimed that just making up numbers to give to these organizations violated state law.
Judge Arthur Engoron has already ruled that she is right and Trump committed fraud. During the fall of 2023, there was a trial in Engoron's courtroom; its purpose was to determine how much Trump's fine would be for violating state law. All the witnesses have been heard and all the evidence has been presented. On Thursday, both the AG and the defense will make their closing statements. The prosecution will say Trump cheated the banks and insurance companies by claiming he was a much better risk than he really was. The defense will say that the organizations which got his false statements should have known he was lying on them and done their own research. Starting Friday, Engoron will begin writing his decision about how much Trump has to pay. Remember, this is a civil case, so the result will be a fine, not prison time. State law gives Engoron wide latitude in determining Trump's fine, possibly including some punitive damages.
Initially, James was asking for a fine of $250 million. Now that all the testimony is in, she has changed her mind. She now says that based on the actual testimony the judge heard, the fine should be $370 million. Engoron doesn't have to pay any attention to her request. He could go higher or lower. In any event, Trump will appeal both the decision that he violated state law and the fine.
Recently, two Georgia election workers got a judgment of $148 million against Rudy Giuliani. His net worth is probably below $10 million, so they will never collect most of it. Trump is different. Even if the fine is $500 million, he has real estate that could bring $500 million at auction. And unlike Giuliani, Trump can't hide his assets—58-story buildings on Fifth Avenue in Manhattan won't fit in a bathroom at Mar-a-Lago. Also, when all the appeals have run out, if the higher courts sustain Engoron's ruling and fine, the judge could simply send an order to the county recorder to change the ownership of, say, Trump Tower, to New York State, and then hire Sotheby's to sell it. The process could run for a while, but in the end Trump would lose one or more properties which would then be sold or auctioned.
It is hard to say what the political fallout will be. Most people won't understand the details, but Joe Biden could make commercials that said: "Donald Trump made his money by lying and cheating banks. He got caught and was hit with a massive fine for breaking the law. He is a crook."
That alone might not move the needle much, but there is another case starting Jan. 16. E. Jean Carroll claimed that Trump raped her in a New York department store. He repeatedly called her a liar and she sued him, twice. She won the first defamation case last year and the jury awarded her $5 million. After the verdict came down, he defamed her a second time and she added those comments to her remaining, still-pending defamation lawsuit. The second defamation trial will start Tuesday of next week.
On Saturday, Judge Lewis Kaplan ruled that Trump's lawyers cannot bring up the fact that in the first case, the jury determined that Trump committed sexual assault but not rape, due to the rigid definition of the latter in New York State law. Trump's lawyers wanted to bring that up and now they will not be allowed to do that.
The jury is likely to conclude that Trump knew exactly what he was doing, knew it was defamatory, and did it anyway. Carroll's lawyer is undoubtedly going to point out the $148 million judgment against Giuliani and say what Trump did was worse because he had been clearly warned by the award in the first case. She could ask for $200 million, $300 million, or whatever she wants to. The lawyer will probably get about 30% of the take, so she has every incentive to shoot for the moon. Carroll's lawyer is Roberta Kaplan, one of the savviest and best lawyers in the business. A sympathetic jury could award Carroll whatever she is asking for. By Feb. 1, Trump could have verdicts of somewhere between $500 million and $1 billion outstanding. These might be reduced on appeal, but might not be. Some voters, especially independents, might come to the conclusion that he is a crook.
Trump cares a lot about money. He values his worth as a person by his net worth. Judgments of $500 million and up could really get to him. This might lead him to say things that convince other voters that he is not mentally fit to be president. In the close elections we frequently have, a shift of even 2% could mean the difference between a President Biden and a President Trump on Jan. 20, 2025. (V)