Trump’s Civil Fraud Verdict Appeal and the ‘No Victims’ Defense
Trump’s Defense Strategy
Donald Trump plans to appeal a $355 million judgment against him in his civil fraud case. He contends that there were no actual victims from his conduct at issue in the case, which was brought under a New York anti-fraud law.
The Lawsuit Details
New York state Attorney General Letitia James filed the civil lawsuit in 2022. It centered on misleading financial statements that Trump provided to banks to secure better loan terms that he ultimately repaid. Unlike many similar cases, this one did not involve ordinary people losing lots of money.
Argument from Attorney General’s Office
The attorney general’s office argued that the law at issue does not require the existence of victims to be enforceable. They also disputed the notion that there were no victims, saying Trump’s bankers were harmed because they could have charged higher interest on loans if they knew his true net worth was lower than he claimed.
Implications of Trump’s Claim
Trump’s claim that there were no obvious victims could be a matter of concern for appellate judges. This is unusual and raises questions about the nature of the proceedings against a large New York business.
Restrictions and Denials
In a Friday ruling, Justice Arthur Engoron barred Trump from running a corporation in New York or applying for a loan with a bank registered or chartered in the state for three years. Trump, however, has denied wrongdoing and accused James and Engoron of political bias.
Application of New York Executive Law
James brought her lawsuit under New York Executive Law 63(12), which gives her office broad powers to file civil lawsuits for “repeated” or “persistent” fraud. This law historically has been used to protect consumers, investors, and small businesses from scams, price-gouging, and other predatory business practices.
Potential Focus of Appeal
On appeal, Trump’s lawyers are expected to reiterate arguments they made during the trial. They told the judge that lenders at Deutsche Bank were finance experts who were obligated to do their own due diligence and were savvy enough to know that Trump was probably exaggerating his property values.
Expert Opinions
Severe penalties in a novel case like this one could potentially be met with skepticism on appeal, legal experts said. They could also prompt appellate judges to consider whether the attorney general overstepped her authority.
Expected Defense and Rebuttal
The state’s lawyers are expected during the appeal to offer the same arguments they presented to Engoron. They are likely to emphasize Trump’s “outrageous” conduct and argue that Trump’s case is unusual because few companies are accused of fraud on this scale.
In his Friday ruling, Engoron also barred Trump from running a corporation in New York or applying for a loan with a bank registered or chartered in the state for three years. The lending restriction could be particularly painful because most major banks are chartered in New York.
Trump, the frontunner for the Republican nomination to challenge Democratic President Joe Biden in the Nov. 5 U.S. election, has denied wrongdoing and accused James and Engoron of political bias.
James, a Democrat, brought her lawsuit in 2022 under New York Executive Law 63(12), which gives her office broad powers to file civil lawsuits for “repeated” or “persistent” fraud. This law historically has been used to protect consumers, investors and small businesses from scams, price-gouging and other predatory business practices.
