Trump's Legal Troubles: Fraud Law Violations

Former US President Donald Trump has been involved in a number of legal cases, including civil and criminal fraud, tax disputes, defamation, and sexual assault. In February 2024, a New York judge ruled that Trump must pay $354.9 million in penalties for civil fraud, specifically for overstating his net worth to dupe lenders. Trump has also been convicted of 34 felonies related to hush money payments, election subversion, and retaining classified documents. He is currently facing a number of other civil and criminal lawsuits.

Inflating and deflating the value of his assets

Former US President Donald Trump has been accused of inflating and deflating the value of his assets. In September 2023, a New York judge ruled that Trump and his company committed fraud by overstating the value of their assets.

The Accusations

New York Attorney General Letitia James sued Trump, the Trump Organization, and his business associates, including his children, for fraud. She alleged that the ex-president made hundreds of false statements that inflated the value of Trump Organization assets to boost his net worth and obtain more favorable business deals.

The Ruling

Manhattan-based Judge Arthur Engoron found Trump and the other defendants guilty of fraud. Engoron wrote that the documents uncovered in the case "clearly contain fraudulent valuations that defendants used in business," and none of Trump's defenses held up. The judge pointed to several Trump properties that were overvalued, including Mar-A-Lago, a building on Park Avenue, an estate in Westchester County, and his penthouse in Trump Tower.

The Consequences

As a result of the ruling, Engoron canceled several of Trump's business certificates and ordered the dissolution of Trump-related LLCs. He also sanctioned several of Trump's attorneys $7,500 for making arguments that the court had repeatedly dismissed.

Trump and his co-defendants opposed James' motion, arguing that the valuations were subjective and that James was "uneducated" about real estate. They brought their own motion, asking the court to rule in their favor and throw out the case entirely before the trial.

The Trial

The trial against Trump and his business allies is set to begin soon and will run until December, though that date is subject to change. The trial will focus on other allegations, such as falsifying business records, financial statements, and committing insurance fraud, as well as determining the intent to commit fraud and the damages Trump and his co-defendants will face.

The Penalties

James' lawsuit asks the court to impose a range of penalties on the defendants, including barring Trump from engaging in any commercial real estate acquisitions for five years, blocking him and his children from serving as officers or directors in any New York business, and forcing the defendants to pay an approximately $250 million fine.

Trump's Response

Trump's attorneys called the ruling an ""outrageous decision" that is "completely unhinged from the facts and governing law." They stated that Trump will seek all available appellate remedies to rectify this "miscarriage of justice."

Fraudulently reporting the value of properties

In a civil fraud case, former US President Donald Trump was accused of fraudulently overstating his net worth to mislead lenders. The New York Attorney General Letitia James accused Trump and his family businesses of overstating his net worth by as much as $3.6 billion a year over a decade to secure better loan terms from bankers.

Trump's Florida Mar-a-Lago club, for example, was overvalued on one financial statement by as much as 2,300%. The former president also lied about the size of his Trump Tower penthouse apartment, claiming it was nearly three times its actual size and worth $327 million.

Justice Arthur Engoron, who presided over the case, described Trump's financial statements as "a fantasy world". He ruled that Trump and his companies had "massively overvalued his assets". Engoron also barred Trump from serving as an officer or director of any New York corporation for three years.

In his ruling, Engoron wrote that Trump and the other defendants in the case were "incapable of admitting the error of their ways". He further stated that their "complete lack of contrition and remorse borders on pathological".

Trump's lawyers have vowed to appeal the ruling.

Lying to banks about his wealth

In February 2024, former US President Donald Trump was ordered to pay $355 million in penalties for lying about his wealth in a New York civil fraud case. The ruling, handed down by Judge Arthur Engoron, found that Trump, his company and executives, including his two eldest sons, had schemed to dupe banks, insurers and others by inflating his wealth on financial statements.

The decision, which Trump is appealing, is a significant setback for the Republican presidential frontrunner, threatening to dent his financial resources and damage his identity as a savvy businessman.

Trump's true punishment could be far costlier because, under state law, he is also required to pay interest on the penalties, which New York Attorney General Letitia James said puts him on the hook for a total of more than $450 million.

The judge made clear, however, that the Trump Organization will continue to operate, backing away from an earlier ruling that would have dissolved Trump's companies. Engoron imposed a three-year ban on Trump serving as an officer or director of any New York company and barred his sons for two years, effectively requiring the company to find new leadership, at least temporarily.

Trump's monetary penalties involve what Engoron said were "ill-gotten gains" that Trump attained by making himself seem richer. They include money Trump saved by securing lower loan interest rates and profits from the sale of properties that he might not have been able to develop without that financing.

The fraud allegations centre on 11 years of financial statements with values based on disputed and sometimes outright false descriptions of properties used as collateral should his loans go bust.

Trump exaggerated the size of his Manhattan penthouse apartment by three times. He listed unfinished buildings as if they were complete, and apartments under rent-control as if they were free of such rules. He showed restricted funds as if they were liquid cash. And he valued Mar-a-Lago as a single residence, though he had signed away rights to develop it as anything but a club.

In his ruling, Engoron concluded that Trump and his co-defendants "failed to accept responsibility" and that experts who testified on his behalf "simply denied reality." He said their "complete lack of contrition and remorse borders on pathological" and "the frauds found here leap off the page and shock the conscience."

Trump has denied any wrongdoing, emphasising disclaimers on the documents that he says alerted lenders to do their own homework. He has also claimed that banks he did business with weren't harmed, made lots of money in his deals and "to this day have no complaints."

Fraudulently inflating his net worth

In 2024, former US President Donald Trump was convicted of civil fraud, specifically of "fraudulently overstating his net worth to dupe lenders". The New York Attorney General accused Trump and his family businesses of overstating his net worth by as much as $3.6 billion a year over a decade to secure better loan terms from banks.

In 2014, a year before entering politics and two years before winning the presidency, Trump inflated his net worth by as much as $2.2 billion, according to court filings by the New York Attorney General's office. The office stated that:

> "Mr Trump's net worth in any year between 2011 and 2021 would be no more than $2.6bn, rather than the stated net worth of up to $6.1bn, and likely considerably less if his properties were actually valued in full-blown professional appraisals."

The lawsuit, brought by New York Attorney General Letitia James, accused Trump of using the inflated value for business deals. James sought $250 million in damages and for Trump and his sons to be disqualified from running businesses in New York.

In February 2024, a New York judge ruled that Trump must pay $354.9 million in penalties for fraudulently overstating his net worth. The judge, Justice Arthur Engoron, also banned Trump from serving as an officer or director of any New York corporation for three years. Engoron wrote in his ruling that Trump and the other defendants in the case were:

> "incapable of admitting the error of their ways. Their complete lack of contrition and remorse borders on pathological."

In addition to the civil fraud case, Trump has faced numerous other lawsuits and legal challenges, including accusations of sexual assault and sexual harassment, tax evasion, and mishandling of classified documents. He has also been involved in legal disputes with businesses, individuals, and government entities, including several cases related to his business practices and financial dealings.

Falsifying business records

In 2024, Donald Trump was convicted of numerous counts of falsifying business records related to hush money payments to adult film actress Stormy Daniels. The conviction was related to a $130,000 payment made by Trump's attorney, Michael Cohen, to Daniels in the days before the 2016 election. The purpose of the payment was to keep voters in the dark about Daniels' allegation that she had sex with Trump years earlier, which he denies.

Trump was charged with 34 counts of falsification of business records in the first degree, a felony in New York. The charges related to 34 separate instances of checks, invoices and vouchers generated to reimburse Cohen for the payment.

Under New York law, falsification of business records is a crime when the records are altered with an intent to defraud. For the charges to be considered a felony, prosecutors must also show that the offender intended to commit another crime or aid or conceal another crime when falsifying records. In this case, prosecutors argued that the other crime was a violation of a New York election law that makes it illegal for "any two or more persons" to "conspire to promote or prevent the election of any person to a public office by unlawful means".

Trump pleaded not guilty to the charges, and his lawyers argued that the payments to Cohen were for his work as Trump's attorney, not reimbursements for the Daniels payment. They also portrayed Cohen, the only witness who testified that Trump knew about the true purpose of the reimbursements, as a liar. However, the jury rejected the defence's arguments and sided with the prosecution, convicting Trump on all 34 counts.

Trump has vowed to appeal the verdict, and his sentencing has been set for July 11, just days before the start of the Republican National Convention. While each count carries a maximum sentence of four years in prison and a $5,000 fine, legal observers expect Trump to receive little or no prison time, due to factors such as his status as a first-time offender and his age.

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