If Judge Engoron Can Say This Stuff To Trump, He Can Say It To ANY World Historical Fraud Grifter
Just a little roundup of (more) of our favorite parts of Trump's $355 million civil fraud judgment.
On Friday afternoon, Justice Arthur Engoron finally released his verdict in the Trump civil fraud trial. The $350 million that’s really more like $470 million went off less like bomb than a firework, dropping as it did on the Friday of a long holiday weekend.
In light of the avalanche of death threats that rained down on the judge and his law clerk from Trump’s MAGA goons, it made sense to allow them to be safely out of the courthouse when the news broke. But while the three-day buffer before court resumes Tuesday sensibly promoted the safety of court staff, it had the additional effect of burying some of the more interesting — not to say hilarious — bits of the 92-page ruling. Because really, who’s reading that shit on a holiday when it’s cold and we’re tired and there’s a “President’s Day” sale on every website?
Not to worry, we got you, Wonkfam!
First let’s get the math out of the way, because it’s important to note that the court didn’t pull that $355 million verdict out of its ass. I’ve broken it down at length here, but in broad strokes, there are two categories of ill-gotten gains that Trump and his goons are going to have to cough up.
One is the difference between the deals Trump would have gotten if he’d been truthful about his finances, and the LIAR LIAR loans he got with his BS statements of financial condition (SFCs). Here’s how that shook out on the note for his Doral golf course in Florida:
In November 2011, Deutsche Bank’s commercial real estate group offered the Trump Organization a $130 million loan at LIBOR + 8%, with a LIBOR floor of 2 – a minimum 10% interest rate. Instead, Donald Trump agreed to a full-recourse loan (i.e., with an unconditional personal guarantee) with the much more favorable terms of an initial interest rate of LIBOR + 2.25% during a renovation period and LIBOR + 2% after renovations.
Trump saved upwards of $10 million annually on Doral alone. So $168 million of this verdict is calculated by forcing Trump to cough up all the interest he avoided paying by submitting fraudulent SFCs that said he was far wealthier than he actually was.
The second major subset of this verdict is the gain Trump realized when he sold properties obtained based on those bogus SFCs. So, in 2023 he sold the concession on the Ferry Point Brooklyn golf course for a profit of $60 million, which he’s now going to have to disgorge. And in 2022, he sold the Old Post Office Building concession, since with him out of the White House, nobody was willing to shower him with cash in DC anymore. That deal netted him $126 million in profit, along with $4 million for each of three eldest kids. Vanky gets to keep hers, for reasons having to do with the statute of limitations, and, whatever, you don’t care. But Trump has to give all that money to the state of New York, and the boys are going to have to hand over their shares as well.
Womp womp!
Okay, math over. Now let’s hit some of the finer points of the ruling itself, which finely filleted the Trumps and their preposterous “expert” witnesses.
Longtime Trump Org CFO Allen Weisselberg already went to Rikers to protect Trump over the tax scam they were running with respect to Weisselberg’s salary. He very clearly perjured himself on the witness stand in this very case when he testified that he had nothing to do with inflating the square footage of Trump’s Manhattan apartment from 11,000 square feet to 30,000. This exaggeration added an extra $200 million to Trump’s theoretical bottom line, “leading the Court to wonder in what universe is $200 million immaterial.”
But it was Weisselberg’s admission that the Trump Org was sitting on his million-dollar retirement payout pending the outcome of his testimony that really pissed off the court:
In that same vein, his testimony in this trial was intentionally evasive, with large gaps of “I don’t remember.” He conceded that his Separation Agreement, on which he is still apparently awaiting four payments, prohibits him from voluntarily cooperating with any entity “adverse” to the Trump Organization or its former or current employees. That alone renders his testimony highly unreliable. The Trump Organization keeps Weisselberg on a short leash, and it shows.
Finding that there was “substantial evidence that Allen Weisselberg’s $2 million separation agreement was negotiated to compensate him for his continued non-cooperation” with civil and criminal investigations of the Trump Org and that Weisselberg was “a critical player in nearly every instance of fraud,” the court ordered him to cough up the last million dollars.
Life comes at ya fast, man!
Trump Org controller Jeff McConney’s “credibility was severely impaired, as he obfuscated and equivocated at length before finally conceding” that he both coordinated with the appraiser valuing Trump’s properties and was responsible for putting fantastical valuations on the SFCs. He even went so far as to deny to the accountants that any such appraisals existed!
And while this may have impressed the boss, it did not impress the court:
When asked how he feels today about the work he did on Donald Trump’s SFCs, McConney replied: “I feel great. I have no problems with the work I did on this.”
Trump’s expert witnesses were a source of great comedy, both in court and in this order. For instance, Professor Eli Bartov of NYU’s Stern School of Business testified that Trump’s SFCs were immaculate, holy wonders of honesty and truth.
As the court notes, “Professor Bartov bills at the rate of $1,350 per hour and has billed approximately 650 hours in this engagement.”
LOL.
Similarly, the defense offered up CPA Jason Flemmons to support the argument that the Trump books weren’t hopelessly cooked.
“The crux of Flemmons’s testimony was that so long as defendants selected one of the permissible methods under [current accounting standards], then any numbers may be inputted into such methodology, regardless of their accuracy or relationship to reality,” the court sniffed, adding that “Flemmons’s testimony is of no evidentiary value, as the plaintiff has not alleged that defendants used an impermissible method, but that they have inputted and used patently false data with a permissible method.”
Shit in, shit out.
The Trump Org offered up Gary Giulietti, Trump’s insurance broker, who plays golf with the former president and belongs to “a bunch of his clubs.” Giulietti said he was not being directly compensated for his testimony, but “this would be included in our overall relationship year over year.”
“In its over 20 years on the bench, this Court has never encountered an expert witness who not only was a close personal friend of a party, but also had a personal financial interest in the outcome of the case for which he is being offered as an expert,” the court quipped.
Justice Engoron was even more scathing on the subject of the Trump kids:
Eric Trump’s credibility was severely damaged when he repeatedly denied knowing that his father ever even compiled an SFC that valued his assets and showed his net worth “until this case came into fruition.” Upon being confronted with copious documentary evidence conclusively demonstrating otherwise, he finally conceded that, at least as early as August 20, 2013, he knew about his father’s SFCs (begrudgingly acknowledging: “It appears that way, yes”).
Don Jr. comes off as largely checked out, signing his name to documents he couldn’t be bothered to understand, unsure if and when his father resumed control of the business or the family trust, and ignorant of the org chart in his own company. And while the judge describes Ivanka as “thoughtful, articulate, and poised,” he “found her inconsistent recall, depending on whether she was questioned by OAG or the defense, suspect.” Luckily, she articulated her poised thoughts in copious emails, so, “in the absence of her memory, the documents speak for themselves.”
Trump himself “rarely responded to the questions asked, and he frequently interjected long, irrelevant speeches on issues far beyond the scope of the trial.” He denied basic facts multiple times on the witness stand, including a hilarious exchange where he insisted that it was entirely appropriate to treat illiquid assets over which he exercised no control like cash in the bank for the purposes of his SFCs.
When asked about his limited partnership interest in Vornado, and specifically, whether he had control over the assets, Donald Trump equivocated several times, extolling the virtues of his limited partnership, before ultimately conceding: “In the true sense, no.”
And, lest there be any doubt that this entire enterprise is built on lies, since the court installed an independent monitor last year to make sure it didn’t do any more fraud, it’s quit putting out SFCs altogether:
Moreover, the fact that the Trump Organization has refused to prepare SFCs, even though various loan covenants obligate them to do so, ever since the monitor was appointed, leads the Court to conclude that the Trump Organization cannot, or will not, prepare an accurate SFC that is GAAP [generally accepted accounting principles] compliant and that values assets at their estimated current values. That the Trump Organization has taken to manufacturing its own version of its assets, one that fails to include any valuations, is a telling admission that it simply cannot, or will not, prepare an SFC without committing fraud.
And finally, let me leave you with this last scheme to make up the loss from having to come clean about the size of that Trump apartment by adding a Trump Slept Here and Left His Meat Farts and Spray Tan on the bedding premium:
Indeed, there was such an effort to conceal the loss in value from the accurately reported Triplex that in a draft version of the 2017 SFC, dated October 10, 2017, Birney had added a 15-25% premiums to many of Donald Trump’s properties, calling them “premium for presidential personal residence”; “premium for presidential property”; “premium for presidential winter residence”; and “premium for presidential summer residence.” In total these various versions of “presidential premiums” amounted to an extra $144,680,601 for the year.
ONE HUNDRED AND FORTY-FOUR MILLION DOLLARS.
Is $470 million plus $83 million for E. Jean Carroll the kind of cash you can find in the couch cushions at the Imperial Presidential Gold Tone Look-of-Real Naugahyde Winter Palace?
Guess we’re all about to find out.
[Ruling]
Liz Dye lives in Baltimore where she produces the Law and Chaos substack and podcast.
So Trump is/was holding Weiselberg’s pension hostage to get favorable testimony? Nothing dodgy about that!
"That the Trump Organization has taken to manufacturing its own version of its assets, one that fails to include any valuations, is a telling admission that it simply cannot, or will not, prepare an SFC without committing fraud."
That's the kill shot. Right there. The organization is so corrupt and so hopelessly irredeemable that the only just outcome is to burn it all the way to the ground.