NY state urges appeals court to uphold Donald Trump’s nearly $500 million civil fraud judgment

New York: New York state lawyers urged an appeals court late Wednesday to uphold Donald Trump‘s nearly USD 500 million civil fraud judgment, arguing there’s “overwhelming evidence” to support a judge’s finding that the former president lied for years about his wealth as he built his real estate empire. In paperwork filed ahead of oral arguments next month, New York Attorney General Letitia James’ office said the current Republican nominee’s appeal is awash in “meritless legal arguments” and ignores volumes of trial evidence showing that he and his co-defendants engaged in “fraud and illegality on an immense scale.”

“On appeal, defendants tellingly ignore almost all their deceptions,” Assistant Solicitor General Daniel S Magy wrote in a 168-page submission to the state’s mid-level appeals court known as the Appellate Division.

Trump, his company and top executives including his sons Eric and Donald Trump Jr “created and used financial statements rife with blatant misrepresentations and omissions to maintain loans worth more than half a billion dollars and to generate over USD 360 million in ill-gotten profits,” Magy wrote.

The Appellate Division said Wednesday that it will hear the case on September 26, about six weeks before Election Day and just after the start of early voting in some states. The court typically rules about a month after arguments, meaning a decision could come before the presidential race ends.

If upheld, the judgment threatens to dent Trump‘s personal wealth, disrupt his Trump Organization and damage his identity as a savvy businessman. As of Wednesday, the Trump defendants owe more than USD 485 million. That includes interest that continues to accrue even after Trump posted a USD 175 million bond in April to halt collection of the sum and prevent the state from seizing his assets while he appeals.

Trump is asking the Appellate Division to overturn Manhattan Judge Arthur Engoron’s February 16 finding that he lied to banks, insurers and others about his wealth on financial statements used to secure loans and make deals. He and his lawyers argue the verdict was “erroneous” and “egregious.” The Appellate Division could either uphold Engoron’s verdict, reduce or modify the penalty or overturn the decision entirely. If Trump is unsuccessful at the Appellate Division, he can ask the state’s highest court, the Court of Appeals, to consider taking his case. If he wins, he won’t have to pay the state anything and will get back his bond money. Trump and his lawyers contend the case should never have gone to trial, the statute of limitations barred some allegations, and the state shouldn’t be policing private business transactions. They also object to the legal mechanics of James’ lawsuit, arguing that the law she sued him under is a consumer-protection statute that’s normally used to rein in businesses that rip off customers.

Trump denies wrongdoing and he and his lawyers say no one was harmed. He has decried the verdict as “election interference” and “weaponization against a political opponent,” complaining he was being punished for “having built a perfect company, great cash, great buildings, great everything.” James and Engoron are Democrats.

In their response Wednesday, state lawyers said the statute of limitations was applied properly and that state law authorizes the state’s attorney general to take action against fraudulent or illegal business conduct, “regardless of whether it targets consumers, small businesses, large corporations, or other individuals or entities.”

Wednesday’s scheduling of oral arguments adds to a busy September for Trump, as he campaigns to retake the White House while navigating the aftermath of multiple courtroom losses.

Trump is scheduled to debate his Democratic opponent, Vice President Kamala Harris, on September 10. On September 16, the judge in Trump’s hush money criminal case is expected to rule on a defense request to overturn his felony conviction and dismiss the case on presidential immunity grounds. Two days later, Trump is scheduled to be sentenced in the criminal case – though his lawyers have asked that it be postponed until after Election Day, November 5.

Engoron found that Trump, his company and top executives schemed for years to puff up his financial statements to create an illusion that he and his properties were more valuable than they really were. Trump inflated his net worth on the financial statements by as much as USD 800 million to USD 2.2 billion a year, state lawyers said.

In addition to the hefty monetary penalty, the judge put strict limitations on the ability of Trump’s company to do business. Among other consequences, Engoron put the Trump Organization under the supervision of a court-appointed monitor for at least three years.

If upheld, Engoron’s ruling will force Trump to give up a sizable chunk of his fortune. The judge ordered Trump to pay USD 355 million in penalties, accounting for what he deemed “ill-gotten gains” derived from his inflated financial statements, including lower loan interest rates and profits from projects he wouldn’t have otherwise been able to finish.

With interest, the total was USD 485.2 million as of Wednesday – including USD 20.6 million in interest that has accrued since the verdict. The sum will increase by nearly USD 1,12,000 per day until he pays, unless the verdict is overturned.

Trump maintains that he is worth several billion dollars and testified last year that he had about USD 400 million in cash, in addition to properties and other investments. James has said that if Trump is unable to pay, she will seek to seize some of his assets.

In a filing last month, Trump’s lawyers said that if Engoron’s decision is upheld, it would bestow James with “limitless power” to target anyone she desires, including her self-described political opponents.