Judge Declines to Halt Trump's Civil Fraud Trial
Former President Donald Trump went to the courthouse for the first three days of the trial in New York Attorney General Letitia James' lawsuit, observing testimony and fulminating to TV cameras outside about a case he deemed a "a witch hunt and a disgrace."
October 09, 2023 at 11:15 AM
5 minute read
Donald Trump's civil fraud trial will roll ahead after the former president lost a bid Friday to halt the proceedings while he fights a pretrial ruling that could strip him of Trump Tower and other marquee properties.
An appeals court judge rebuffed Trump's push to pause the New York trial, but agreed to leave him in control of his holdings for now. The decision, after an emergency hearing Friday afternoon, came five days into the closely watched trial.
Trump went to the courthouse for the first three days of the trial in New York Attorney General Letitia James' lawsuit, observing testimony — and fulminating to TV cameras outside about a case he deemed a "a witch hunt and a disgrace."
Trump's lawyers had asked the state's intermediate appellate court to suspend the trial and prevent Judge Arthur Engoron from enforcing a ruling he made last week. Engoron's decision revoked the Republican presidential frontrunner's business licenses and puts a court-appointed receiver in charge of his companies.
"This is a massive error. It is irreparable," Trump lawyer Christopher Kise told the appellate judge, Associate Justice Peter H. Moulton. Kise argued that the ruling will make defendants in other cases fear that their companies and properties will be seized without recourse.
"We're not seeking a delay. We're seeking a fair trial," Kise said.
Trump's lawyers said Engoron's ruling could harm not only the ex-president and other defendants but as many as 1,000 employees.
State Deputy Solicitor General Judy Vale told the appeals judge that James' office had already offered to keep the business licenses as-is until after the trial. Kise acknowledged the offer, but said he was worried Engoron wouldn't allow it.
"We could have resolved some of this, and we're still happy to do so," Vale said, calling the defense arguments for a delay "completely meritless."
"No one thinks the lights will go off at 40 Wall Street tomorrow, that's not what's happening," Vale said.
Mounting the trial has been "an enormous endeavor," Vale said, entailing extensive court planning, security resources for Trump's attendance and special arrangements for press and public access.
In a statement, Kise said that he was pleased the appeals court "upheld New York law and put a halt to any cancellation of business certificates, receivers or dissolution."
"The trial court's attempt to reach issues, entities and assets beyond the scope of this case has been suspended," Kise said.
James countered that Trump's side was "falsely claiming victory" for a resolution that her office had proposed and that the big takeaway was that the trial goes on as scheduled.
"Once again, Donald Trump's attempts to delay this trial have been rejected," James said in a statement. "Yet another court denied his efforts to evade justice for his years of fraud. But Donald Trump lives in a fantasy world where money grows on trees and facts don't matter."
The appellate court last week rejected the defense's last-minute effort to delay the trial just days before it began. On Thursday, Trump's lawyers dropped a lawsuit they filed against Engoron as part of that challenge.
Engoron ruled last week that Trump committed years of fraud as he built the real estate empire that vaulted him to fame and the White House.
The judge, ruling on the top claim in James' lawsuit, found that Trump routinely deceived banks, insurers and others by exaggerating the value of assets on his annual financial statements, which were used in making deals and securing loans.
Trump has denied wrongdoing, arguing that some of his assets are worth far more than what's listed on the statements.
Before the appellate action, former Trump Organization controller Jeffrey McConney testified at the trial Friday that values he assigned to Trump's Mar-a-Lago resort in Florida — as much as $739 million in 2018 — were based on the false premise that it could be sold as a private residence. Such use is prohibited by Trump's 2002 agreement with the National Trust for Historic Preservation.
"Were you aware that Mr. Trump had deeded away his right to use the property for any other purpose than a social club?" state lawyer Andrew Amer asked.
"I was not aware," said McConney, who's also a defendant in this case.
The trial will resume Tuesday with Trump's longtime finance chief Allen Weisselberg on the witness stand. Weisselberg, a defendant, oversaw Trump's dealmaking, was involved in securing loans and supervised McConney's work on the financial statements. He left jail in April after serving about 100 days for dodging taxes on $1.7 million in job perks.
As the trial was unfolding this week, Engoron issued an order Thursday setting procedures for enforcing his ruling. He gave both sides until Oct. 26 to submit names of potential receivers and gave Trump and other defendants seven days to provide a court-appointed monitor, retired federal judge Barbara Jones, with a list of all entities covered by the ruling.
He also ordered the defendants to give Jones advance notice of any application for new business licenses in any jurisdiction and any attempts to create new entities to "hold or acquire the assets" of a company that's being dissolved under the ruling.
Trump's lawyers argued in court papers that Engoron had "no rationale or legal authority" to impose what they described as "the corporate death penalty." They also rapped the judge for not being clear in explaining the real-world effects of his decision.
At a pretrial hearing on Sept. 26, Trump lawyer Christopher Kise pressed Engoron to clarify whether his ruling meant Trump would be required simply to close up some corporate entities or if he'd be forced to relinquish some of his most prized assets.
Engoron then said he wasn't "prepared to issue a ruling right now."
Michael R. Sisak reports for the Associated Press. AP writer Jennifer Peltz contributed to this report.
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllDivided State Court Reinstates Dispute Over Replacement Vehicles Fees
5 minute readSecond Circuit Ruling Expands VPPA Scope: What Organizations Need to Know
6 minute read'They Got All Bent Out of Shape:' Parkland Lawyers Clash With Each Other
Courts of Appeal Conflicted Over Rule 1.442(c)(3) When Claims for Damages Involve a Husband and Wife
Trending Stories
- 1AI Expected to Transform Legal Field Even More as Technologies Evolve
- 2Attorneys ‘On the Move’: Morrison Cohen Adds White Collar Partner; Corporate/Securities Partner Joins Olshan
- 3Jury Says $118M: Netlist Wins Another Patent Verdict Against Samsung
- 4Big Law Communications, Media Attorneys Brace For Changes Under Trump
- 5Will England Accept that Digital Assets Are ‘Property’?
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250