Appeals Court Likely to Side With Trump on Civil Fraud Persecution

Donald Trump is getting some encouraging signals from the panel of appeal judges weighing in on his New York state civil fraud case. They appear to be leaning his way. That’s not surprising considering the whopping $464 million judgment entered against him.

Court hands Trump hope

On Thursday, September 26, a five-judge Appellate Division panel heard oral arguments in the civil fraud case against Trump in New York. For over an hour, the state’s mid-level appeals court heard attorneys for both sides bickering back and forth.

They were mostly interested in whether “any constraints apply to the law New York Attorney General Letitia James used” at trial. Any restraints at all.

Apparently, the prosecutor is of the opinion it gives her superpowers to do anything she wants. As the court observed, “the law gives the state sweeping power to bring actions.”

They can charge any business that engages in “repeated fraudulent or illegal acts or otherwise demonstrate persistent fraud or illegality in the carrying on, conducting or transaction of business.” What they accused Trump of doing is business as usual to most of New York.

“How do we draw a line, or at least put up some guardrails,” Justice John Higgitt inquired. The court needs some assurance that the Attorney General “is operating well within her broad — admittedly broad — sphere.” They won’t buy the suggestion she can do anything at all that she wants to anyone.

The court is demanding some guidance on “when she is going into an area that wasn’t intended for her jurisdiction.” The charges against Trump are spurious at best. They’re going to need to work much harder if they plan to justify the earth-shattering sum the Judge handed down as a fine.

Pay $464 million, plus interest

The rabidly Democrat trial judge, Arthur Engoron, ruled that “Trump, the Trump Organization and top executives, including two of Trump’s sons, falsely altered Trump’s net worth on key financial statements to reap tax and insurance benefits.” Between them, “they have to pay combined $464 million, plus interest.” Donald Trump’s share of that personally is $454 million.

The thing about a number that big is that it quickly mushrooms out of reality. “As of Thursday, interest on the judgment has surpassed $24.7 million.” It will only go up until it gets paid. Or tossed in the trash, which is more likely.

According to Trump attorney D. John Sauer, “the state’s case was brought too late.” Not only that, “decades-old financial statements should not be the basis for such a ‘crippling‘ financial penalty.” He also underscored at Thursday’s hearing that “banks wanted to work with the Trump Organization, did their own due diligence and found no fraud.”

The prosecution is using statutes meant to protect the fragile public from consumer fraud. Carefully quoting estimated figures to make things look as rosy as possible is standard business practice. Checking those numbers for accuracy is just as standard.

The lenders and insurers “did do their own due diligence.” They didn’t see anything wrong at all. Not only that, the numbers weren’t even factored in to the decisions. “The uncontradicted testimony in the summary judgment record is, ‘Everything we did was independent; we didn’t rely on the numbers.‘”

That’s why the judges are wondering about the broad powers the AG has. What she’s pinning on Trump doesn’t match the other times the same law has been used. Justice David Friedman pointed out that he had “gone through the case that you’ve cited, and all of them always involved consumer protection aspect — it involved protection of the market. You don’t have anything like that here.“

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