An appeals court in New York is set to hear arguments in the case. Donald Trump’s He is fighting to overturn a civil fraud verdict that could destroy his real estate empire and cost him nearly half a billion dollars.
The former president and current Republican candidate is asking the state’s intermediate appellate court to overturn a judge’s findings that he defrauded banks, insurance companies and others for years by lying about his wealth on papers used to make deals and secure loans. His lawyers argue that Judge Arthur Engoran’s ruling was “egregious” and should be reversed.
The office of New York Attorney General Letitia James, which sued Trump on behalf of the state, argues that Engoron’s decision is based on “substantial evidence.”
Here are some things to know about Thursday’s hearing:
What is this appeal about?
Engoran ruled that Trump had inflated his net worth by billions of dollars by grossly overvaluing his assets in his annual financial statements. These assets include golf courses and hotels in his name, his Mar-a-Lago estate in Florida, and his Trump Tower penthouse in Manhattan.
The judge issued his ruling after a 2½-month trial that included testimony from 40 witnesses, including Trump. He ruled the case was a no-brainer because state law does not allow a jury in such a trial and neither side had asked for one.
Engoran found Trump, his company and executives, including his sons Eric and Donald Jr., responsible for falsifying records, conspiring to defraud insurance companies and issuing false financial statements. He also found former Trump Organization executives Allen Weisselberg and Jeffrey McConkey responsible for insurance fraud.
Trump and his co-defendants are also challenging Ingarone’s ruling, even before testimony began, that the state had proven Trump fraudulently inflated his financial statements. The judge ordered Trump and the other defendants to pay a $363.9 million fine — a sum that has since grown to more than $489 million with interest.
The judge placed the Trump Organization under the supervision of an independent monitor for at least three years and ordered other sanctions, most of which have been stayed pending the appeal.
When will Trump’s appeal be heard?
Oral arguments are scheduled for noon Thursday in the Appellate Division of the First Judicial Department in Manhattan. The mid-level appeals court is one rung higher than Engoran’s trial court in New York’s state court system.
A panel of five judges will hear the case. Each side has been given 15 minutes to argue. It is expected that it will also be livestreamed.
Trump has chosen D. John Sawyer, who successfully argued his presidential immunity case in the U.S. Supreme Court, to argue his behalf. Sawyer, a former solicitor general of Missouri, was a Rhodes Scholar and served as a Supreme Court clerk for the late Justice Antonin Scalia.
Judith Welle, New York’s deputy solicitor general, will argue on behalf of James’ office.
Trump’s lawyers have gone to the Appellate Division at least 10 times to challenge Engoran’s previous rulings, including unsuccessful attempts to overturn a gag order and Engoran’s decision to fine Trump $15,000 for posting false and derogatory information about the judge’s law clerk on social media.
What is Trump’s argument?
Trump and his lawyers say the penalties imposed on Trump were “grossly unjust,” that some of the charges should have been barred by statutes of limitations and that the state should not have looked into private business transactions. They also say James improperly sued Trump under a consumer protection law that is typically used against businesses that defraud customers.
Trump and his lawyers have repeatedly complained about Engoron’s approach to the case, accusing the judge of “obvious and extreme” bias and overstepping his authority.
Trump says he did not lie about his wealth or the value of his properties and that his actions harmed no one. He has denounced the decision as “interference in the election” and a “weapon against a political opponent.” He has complained that he is being punished for building “a great company, great cash, great buildings, great everything.” James and Engoran are Democrats.
Trump’s lawyers argue that upholding the decision would give James “unlimited power to target anyone she pleases, including her self-proclaimed political opponents.”
What do the state attorneys say?
James’ office argues that Trump’s appeal is filled with “nonsense legal arguments” and ignores evidence that shows he engaged in “massive fraud and illegality.”
“At the time of the appeal, defendants blatantly ignored nearly all of their deception,” Assistant Solicitor General Daniel Magee wrote in a document filed with the court.
Magee wrote that Trump, his company and top executives, including Eric and Donald Trump Jr., “prepared and used financial statements filled with blatant misrepresentations and omissions to maintain more than a half-billion dollars in debt and obtain false profits of more than $360 million.”
The state has argued that Trump inflated his net worth by $800 million in financial statements, to a total of $2.2 billion per year.
Magee said the statute of limitations was properly applied and that state law authorizes the state attorney general to take action against fraudulent or illegal business conduct, “whether it targets consumers, small businesses, large corporations or other individuals or entities.”
Has Trump had to pay anything yet?
Trump posted a $175 million bond in April to halt collection on the judgment and prevent the state from seizing his assets while he appeals. The bond guarantees payment if the judgment is upheld. If that happens, Trump and his co-defendants will have to pay the state the full amount, plus interest, which is growing at $114,553 per day.
Normally, an appellant would have to post the full amount to prevent collection. After Trump’s lawyers complained that it was “practically impossible” to obtain such a large sum, the Appellate Division said it would allow him to post a $175 million bond instead.
what happens next?
The Appellate Division typically issues a ruling about a month after arguments, which means a decision could come before election day. The court can either uphold the verdict, reduce or modify the penalty, or overturn Engoran’s decision altogether.
If either side doesn’t like the outcome, it can ask the state’s highest court, the Court of Appeals, to consider moving the case forward. Trump has vowed to fight the decision “all the way to the U.S. Supreme Court if necessary.”
Trump says he owes billions of dollars in assets. James has said she would seek to seize some of Trump’s assets if his appeals fail and he is unable to pay.
Since this is a civil matter, there is no chance of going to jail.