Donald Trump has 5 ways to fight Letitia James’ lawsuit, former NY AG prosecutors tell Insider.
Trump will play dumb, shout biased and delay, delay, delay, they said.
James filed a 220-page lawsuit against Trump, his family and the Trump Organization on Wednesday.
Donald Trump will try every possible legal tactic to save his Manhattan-based business empire from the trial of New York Attorney General Letitia James, former prosecutors have said.
It won’t be pretty, and unless there’s a settlement, it won’t be quick, they said of the slow-motion legal tussle ahead. But it will be hot, these New York AG veterans said of Wednesday’s trial battle and its potentially crippling penalties for businesses.
James has accused Trump of regularly lying about the value of his properties to obtain hundreds of millions in bank loans and tax breaks; she wants a judge to order $250 million in penalties and prohibit the Trump family from selling, buying, collecting rent or borrowing money in New York.
The result is by no means guaranteed.
Insider spoke with three defense attorneys who, before going into private practice, spent years pursuing complex financial cases for the office of the New York AG. Here are their picks for Trump’s 5 best defenses.
Trump Defense No. 1: She’s Here To Get Me
“I’ve never heard of her,” Trump complained to Fox News host Sean Hannity on Wednesday, hours after the lawsuit was dropped.
“But I saw this woman,” he said of James’ 2018 run for AG. “And she said, ‘We’re going to get it. “”
“His whole campaign was based on that,” he added.
This wasn’t the first time Trump had raised the “She wants to have me” defense. He has repeatedly and unsuccessfully cried out “bias” in the fight against James’ three-year investigation into the Trump Organization. In February, he even compiled his history of anti-Trump statements into an 11-page spreadsheet.
“They’re definitely going to waste a lot of paper trying to make this argument again,” in motions to dismiss filed in the coming weeks, predicted Tristan Snell, the lead prosecutor for the office’s separate and successful investigation. ‘AG on Trump University.
“It won’t get them anywhere” except to “raise their own followers,” said Snell, who later founded MainStreet.law.
“It’s definitely not going to fly with the judge,” agreed another former NY AG prosecutor, attorney and author, Kenneth McCallion.
But another former prosecutor in the AG’s office, Armen Morian, believed the bias defense might still have arguments to dismiss the lawsuit.
“It’s not trivial that she said, ‘I’m going to go after Trump,'” said Morian, who prosecuted complex financial frauds from 2006 to 2019 before founding Morian Law.
“It is a violation of his oath of office and a violation of his due process rights,” Morian said.
Defense n°2: real estate valuations are subjective
Property value is subjective, and Trump’s side will certainly support it in trying to beat James’ lawsuit. But you can’t simultaneously set low (for tax relief) and high (to impress lenders) values for the same property, as James claims Trump has done for years, former prosecutors said.
“They can’t both be true” at the same time, McCallion said. “And you don’t have to prove which was true and which was false” to show fraud.
You also cannot draw a valuation out of nothing.
“There’s subjective and there’s complete Neverland,” Snell noted.
Fantasyland, as in Trump’s objectively false claim in 2015 that his Trump Tower triplex on Manhattan’s Fifth Avenue was 33,000 square feet. It was actually 11,000 square feet, a huge exaggeration first reported by Forbes.
Tripling its square footage allowed Trump to claim his triplex was worth $327 million as collateral for a bank loan.
It’s an “absurd” assessment, James told reporters when breaking the lawsuit, given that at the time, “a single apartment in New York City sold for even $100 million.”
Morian countered, however, that it’s common in real estate for companies to seek out and use vastly different valuations, depending on whether you’re trying to cut your taxes or impress a bank.
“As long as the assessment is based on justification, you don’t have to use the same methodology” for every assessment, Morian explained.
“The methodology could have been wrong. The methodology could have been optimistic. But that doesn’t make a fraudulent claim,” he said.
“You can’t say your 3-year-old daughter’s version of the Mona Lisa is worth the same as the Mona Lisa,” Morian explained. “That would be ridiculous. And you can’t say the Mona Lisa is worth $3. But basically there’s a wide range of discretion in how you value assets.”
Defense #3: I just signed everything they gave me
Trump claimed to have signed all the dodgy documents without actually looking at them.
“If he weren’t a sophisticated, or allegedly sophisticated, investor and developer, that might be true,” said McCallion, who runs McCallion & Associates and is the author of “Profiles in Cowardice in the Trump Era.”
“But Trump was a very active guy, for better or for worse, in the world of the Trump Organization.”
It’s also safe to assume, Snell said, that Trump was repeatedly asked in his August deposition whether, in fact, he had blindly relied on his appraisers and accountants.
But instead of responding, Trump repeatedly pleaded the Fifth. If the lawsuit were to go to trial, the case law allows the judge to infer that Trump was hiding the truth.
“Answering ‘I plead the fifth’ translates to ‘No, it was me,'” Snell said.
Still, the judge must at least weigh any defense “I just signed what they gave me,” Morian said.
“Does that absolve him? Probably not,” Morain said. “But it can be a very strong factual defense that the courts should consider.”
Defense #4: I never said you should trust me
“We have a disclaimer, right at the start,” Trump told Hannity of the financial statements James is pursuing, ones she says grossly overstated his worth.
“And that basically says, you know, get your own people. You’re at your own risk…so don’t trust whatever statement you get,” Trump said, warning his warnings, “because it might not be the case. be specific. It can be far.
Also, Trump said, the banks that lent him money “have the best lawyers in the world.” They should know not to take him at his word.
“She’s trying to defend banks that had incredible legal talent,” Trump complained.
Trump is actually right, Morian explained.
“All you have to do is put a little footnote” in a financial statement, putting the bank on notice to double-check the numbers, “and that may be enough” to avoid liability for fuzzy calculations, a he declared.
“Because the reader of financial statements is assumed to be a sophisticated party,” Morian added. Besides, “I bet you all these [banks] were applying a ‘Trump haircut’ – they assumed he was overdoing the shit by, say, 30%, who knows.”
Defense #5: No Victim, No Harm, No Fault
“By the way,” Trump also told Hannity, “I paid them back… They didn’t lose money… the banks made a lot of money. She’s trying to defend the banks that got paid back.”
It is defense without victim, without harm, without fault.
Or, as Trump’s White House budget director Mitch Mulvaney tweeted on Friday, “Seriously, who’s the victim here? If the banks think they’ve been defrauded, they could sue themselves.”
Morian also sees their point of view.
“There is a gaping silence” from the banks that Trump allegedly got to lend to him, he noted.
And it’s almost as if James filed what’s called a private complaint, Morian added – “as if the attorney general is suing on behalf of Deutsche Bank. She doesn’t have standing to do so.”
“It will be central to the motions to dismiss,” McCallion agreed. “It will be up to her to show that she has the power to carry this case.”
But James doesn’t call the banks victims.
The victims, she tweeted on Wednesdayare those she is sworn to protect, the people of New York State.
“Trump’s crimes are not without victims,” she told reporters.
“When well-connected and powerful people break the law to get more money than they are entitled to, it reduces the resources available to workers, small businesses and taxpayers.”
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