NEW YORK -- New York Attorney General Letitia James, in a written brief filed a week before closing arguments in her civil fraud trial against former President Donald Trump, has asked the judge in the case to fine Trump over $370 million to disgorge profits from what James says is a decade of fraudulent business conduct.
James also requested that Trump and his two former deputies at the Trump Organization, Allen Weisselberg and Jeffrey McConney, barred for life from participating in the New York real estate industry.
Trump, his sons Eric Trump and and Donald Trump Jr., and other top Trump Organization executives are accused by New York Attorney General Letitia James of engaging in a decade-long scheme in which they inflated Trump's net worth on this statements of financial condition in order get more favorable loan terms.
The former president has denied all wrongdoing and his attorneys have argued that Trump's alleged inflated valuations were a product of his business skill.
Two sides submitted written briefs Friday, ahead of closing arguments scheduled for Jan. 11.
Arguing that "virtually every action they took in preparing those [statements of financial condition] was part of a fraudulent scheme," James said the only way to prevent future fraud was to bar Trump from New York's real estate industry for life. James also alleged that the Trump Organization under Eric and Donald Trump Jr. lacks "lacks effective leadership" and should be placed into court-appointment monitorship for at least five years to ensure it no longer violates the law.
The request for a $370 million fine, plus 9% annual interest, is a sharp increase from James' initial request for disgorgement totaling roughly $250 million. In Friday's filing, she justified the increase by arguing that Trump, his sons, and his top deputies knowingly engaged in the fraud and personally benefited from it.
The largest portion of the requested fine stems from the business loans the Trump Organization obtained using allegedly fraudulent financial statements. Based on expert testimony, James argued that Trump cost his lenders $168,040,168, which the banks would have made if Trump was given the appropriate interest rate corresponding to the actual value of his assets.
James also argued that the Trump Organization used fraudulent documents to win their bid to renovate and operate a hotel in the Old Post Office Building in Washington, D.C., which netted a profit of $139,408,146 from its sale. Donald Trump personally profited $126,828,600 from the deal, and his sons made $4,013,024 each.
The profits from the sale of Trump's Ferry Point golf course in New York also netted the company roughly $60 million in profit.
James argued that Weisselberg and McConney each profited from these deals through their generous severance agreements, which the Trump Organization used to control their former executives through multiple investigations.
"After these illegal acts came to light, Eric Trump and Donald Trump, Jr. allowed Weisselberg and McConney to remain on the payroll and rewarded them with lucrative severance packages that restricted their ability to cooperate with law enforcement investigations, rather than immediately terminating their employment," James wrote.
In their defense filing, Trump's lawyers said the attorney general's theory for disgorgement was "fundamentally flawed." No lenders testified that they would have done anything differently had they known about Trump's misstatements, and James attempted to fill that evidentiary void with expert testimony, according to Trump's lawyers.
Trump's lawyers added that even if the attorney General proved that some of Trump's profits were ill-gotten, they lack the authority under New York Executive Law 63(12) to request the disgorgement.
"The Court is simply not free to accept the invitation of the NYAG to ignore the actual facts, the unrebutted evidence, and the testimony of the actual transaction participants," Trump's lawyers wrote.
Trump's defense team added that in the 11 weeks of the trial, "The NYAG introduced no evidence that anyone relied on any alleged misrepresentation and/or that anyone was injured."
The attorney general's office, in their brief, said that "The conclusion that defendants intended to defraud when preparing and certifying Trump's statements of financial condition is inescapable; the myriad deceptive schemes they employed to inflate asset values and conceal facts were so outrageous that they belie innocent explanation."
The dueling arguments will be presented in court on Jan. 11 when the two sides deliver closing statements before Judge Arthur Engoron, who has already found Trump, his eldest sons, and his namesake family real estate business liable for repeated and persistent business fraud.
The defense argues that the state's case is vague and has failed to prove any wrongdoing by the former president.
"There is no specificity in the record as to which Defendants, if any, are responsible for which conduct," the defense filing said. "There is no clear and convincing evidence (or any evidence) that President Trump intentionally filed a misleading SFC," referring to statements of financial condition the Trump Organization submitted to banks and insurance companies.
The state insisted it presented "direct evidence from multiple witnesses" establishing that Trump had a desired target net worth each year prior to assuming public office in 2017, "which his CFO and Controller then dutifully set out to hit by reverse-engineering the asset values in the SFC, a practice that continued under the leadership of Eric Trump and Donald Trump, Jr.," their filing stated.
The closing briefs and arguments will guide Judge Engoron as he decides the remaining six causes of action against Trump and what, if any, financial penalty to impose.
The most recent opinion Engoron issued in the trial, on Dec. 18, denied Trump's final request to throw out the case and signaled the judge's skepticism about his defense team's arguments, describing Trump's claims as "bogus statements at best and fraud at worst."