Trump’s business empire in question during New York civil fraud trial

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• Amna Nawaz:

  Former President Donald Trump was in court today in New York for a civil fraud trial over his real estate dealings.

• Geoff Bennett:

  The judge already ruled on one of the major arguments from prosecutors last week, saying Mr. Trump and his executives fraudulently inflated the value of real estate holdings. The judge still has to weigh in on other claims in the suit.

  Before heading into the courtroom this morning, the former president accused prosecutors of interfering in the upcoming presidential election.

  Donald Trump, Former President of the United States: It's a scam. It's a sham. This trial could have been brought years ago, but they waited until I was right in the middle of my campaign.

• Geoff Bennett:

  Joining us now is Russ Buettner, who has been covering the former president's business dealings for The New York Times.

  Thank you for being with us.

• Russ Buettner, The New York Times:

  Thanks for having me.

• Geoff Bennett:

  And, as we mentioned, a judge has already found Donald Trump and his co-defendants liable for business fraud.

  This trial is aimed at determining the amount of damages. What is at stake? What are prosecutors seeking?

• Russ Buettner:

  Prosecutors are seeking a fine that they estimate to be about $250 million. That's a massive bite.

  They're also seeking essentially to have a receiver, somebody else put in charge, of running his company. It seems to make sure that enough cash would be available on hand to pay whatever fine is ultimately determined. As part of his order last week, the judge granted the receivership. That means somebody else will be in charge.

  And then there will be this long process to prove these remaining six counts to see what sort of damages should be assessed in relation to all this.

• Geoff Bennett:

  And we should say that Donald Trump didn't have to show up for court today, but he chose to.

  And the anger and frustration was fairly palpable. With a judge finding last week that Donald Trump and the other defendants have committed persistent and repeated fraud — that's a direct quote — what at this point is the Trump defense?

• Russ Buettner:

  So far, the Trump defense, in some ways, it revisits some of the prior defenses they have issued that have already been shot down by this judge in the appellate court. So they're sort of just trying this again.

  They're saying that — one, that reasonable minds can disagree when you're talking about property valuations, two, that some of these were based on professionally done products that should result in something that has a real value attached to it, and also that — if I can just check my notes quickly — also that no one really relied on this.

  That's sort of not a great defense. They're saying, yes, we assigned these values to these things, yes, we submitted them to banks and insurance companies to get more favorable rates, but they all do what they're going to do anyway, and so it doesn't really matter what we put on these documents.

• Geoff Bennett:

  So, in essence, the Trump team is saying that this is a victimless crime, that no one was really harmed by any of this.

• Russ Buettner:

  That's right, and that these loans were actually repaid.

  The judge has made clear that that's not a component of the particular law under which this case was brought. Whether or not there was a — whether or not the loans failed, whether or not the fraud resulted in damages to the other party is not important.

  However, in this case, there is some element of that still, because the banks and insurance companies gave Mr. Trump much lower rates than they would have if perhaps if he would have submitted truthful documents and records.

• Geoff Bennett:

  If the attorney general, if the New York attorney general, gets what she wants in this civil case, what would it mean for the future of the Trump Organization, this $250 million, at least $250 million in damages?

• Russ Buettner:

  That's the big question that's hanging on all this.

  I don't want to say at least, because that's what their estimate is. But they're still calculating how that's going to work out. It's all going to be appealed. This will probably take more than a year to get resolve after the case, this case, is brought to a conclusion, I would expect.

  And, look, if the final judgment is in the neighborhood of $250 million, and there's a receiver put in charge of this thing to figure out what has to be — whether something has to be sold to do that, and, at the end of the day, Donald Trump has a much diminished sort of empire and has lost all of his licenses to conduct business in the city of New York, that's an existential threat to the Trump Organization and the Trump family's enterprise over the course of his life.

  And really, more importantly, maybe even to him, why you see him looking so angry in court, to his personal identity, to everything he said about himself since he was a young man, that he built a massive empire entirely on his own. That, in itself, is not true either, but it's really important to him to hang on to that.

  And it's the argument that he makes over and over again to his supporters in the political realm as to why he has the sort of expertise and experience to be president.

• Geoff Bennett:

  As you have been speaking, we have been looking at court sketches from the hearing today.

  This case, as I understand it, is expected to last three months. There's some 200 names on the witness list. What comes next? What are you watching for?

• Russ Buettner:

  Well, right now, starting today, the accountant who filled out all of Donald Trump's tax returns for the last 15 or 20 years — we obtained a couple of years ago all of his tax returns going back 20 years.

  Some years, there are 500 returns filed for each entity, and this accountant's name is on every single one of those. And he — it seems he's going to testify: I just put on those returns the information I was given. They didn't tell me that they had an appraisal saying it was worth something else.

  He also will help them sort of backstop whatever things the Trump Organization cites in a part of that. I think the big thing is going to be the gap between what the Trump Organization knew to be true, because they had an appraisal on a property or a property had a restriction it, and then what they told the bank to try to seek their loans.

  When they had an appraisal in some cases of $200 million, they put that the property was worth $600 million. When they had an appraisal that was worth $30 million, in one case, they put $300 million. Then there were times that there were properties that they really couldn't build on much, but they created a value for the purpose of getting these loans that suggested that they could actually put whatever they wanted on it.

  And that's the gap where the fraud lies and where the damages will rest when they try to compute what were the gains that came out of this for the Trump Organization.

• Geoff Bennett:

  Russ Buettner of The New York Times, thank you for sharing your reporting with us this evening. We appreciate it.

• Russ Buettner:

  Thanks for having me.