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In August of 2022, New York Attorney General Letitia James filed a civil fraud suit against Donald Trump, his three eldest children, their family business, and Allen Weisselberg, the Trump Organization’s longtime CFO. The complaint demanded disgorgement of $250 million in ill-gotten gains reaped from years of defrauding lenders and tax authorities. This eye-watering figure was only dwarfed by the demand that Supreme Court Justice Arthur Engoron give Trump the corporate death penalty, canceling all the Trump Organization’s licenses to do business in the state of New York and selling the pieces for scrap.
In September of 2023, on the eve of trial, the court did just that, granting partial summary judgment and ordering the Trump entities to be put into receivership and sold. That order was stayed on appeal, but in the meantime the parties went to trial on the issue of damages, i.e. how much Trump should have to disgorge for doing all that fraud. In preparation for closing arguments on January 11, the parties submitted their proposed findings of fact and conclusions of law today. Unsurprisingly, they do not agree on the appropriate remedy.
Trump’s lawyers Michael Madaio and Chris Kise insist that the AG has not met her burden as to materiality or intent, has not proved the existence of a conspiracy, and is not entitled to disgorgement under New York law. They insist that no bank was harmed, the AG lacks parens patriae authority to bring an enforcement action without a complainant, and the damages should be ZERO.
Or, more succinctly …
Well, to be fair, Kise and Madaio didn’t blame the Justice Department for the actions of a New York state prosecutor — at least not in this motion.
But with the benefit of hindsight, AG James has also recalibrated her figures. Now she wants $370 million in disgorgement, plus interest, of course.
The Court should order disgorgement which as of October 27, 2023 totaled $369,948,314, consisting of: (i) $168,040,168 in saved interest on four commercial real estate loans; (ii) $139,408,146 in profit from the sale of [the Old Post Office hotel]; (iii) $60,000,000 in profit from the sale of Ferry Point [Golf Course]; and (iv) $2,500,000 in bonuses paid to Weisselberg and [Trump Org Controller Jeff] McConney. The Court should order Defendants to pay prejudgment interest on those disgorgement amounts at the statutory rate of 9% per annum. (CPLR 5004)
The state asks for broad injunctive relief, calling the Trumps a pack of corporate incorrigibles who “continued their fraudulent scheme during the pendency of these proceedings, despite knowing that both OAG and the New York District Attorney’s Office were investigating the inflation of Trump’s net worth.” The motion asks that retired judge Barbara Jones, who was appointed as monitor after Trump got caught trying to move his assets out of New York, stay on to make sure that the family doesn’t commit more fraud while it appeals the court’s rulings. And the AG requests that the court impose “Lifetime injunctions barring Trump, Weisselberg and McConney from participating in the real estate industry in New York State or from serving as an officer or director of any New York corporation or other legal entity,” with five-year bans for Don Jr. and Eric Trump, who took over the company when their father took a job grifting in the public sector.
Perhaps mindful that now is really not the time to continue his campaign of rage against Justice Engoron’s wife and son, Trump has contented himself with screaming into the ether today about the judge and the AG.
“Letitia James is doing this to me, No Victims, No Crime, Great Financial Statements, yet Murder and other Violent Crime is RAGING OUT OF CONTROL in New York, as People and Businesses flee, in Record Numbers, to other States!” he moaned this afternoon on Truth Social.
This is what counts as good behavior from the former president. But considering his lawyers’ record in court thus far, whining on social media probably won’t make it any worse.
Liz Dye lives in Baltimore where she writes about law and politics and appears on the Opening Arguments podcast.
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