Donald Trump Organization will have to pay $250 million in damages in Manhattan trial

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Donald Trump Organization will have to pay $250 million in damages in Manhattan trial

The future of Donald Trump's real estate business will be determined in a Manhattan court case that began Monday.

The New York attorney-general, Letitia James, is taking Donald Trump to court after a five-year investigation found that he and other members of the Trump Organization repeatedly utilized false or misleading financial statements to broker deals, obtain favorable loans, and bolster the appearance of his net worth.

The New York supreme court justice, Arthur Engoron, presiding over the trial, has already found Donald Trump guilty of financial fraud in a pre-trial judgment. The trial will focus on determining whether or how much Trump would have to pay for the verdict.

James has argued that the Trump Organization should be owed at least $250 million for profiting off loans that were awarded based on false and misleading financial statements. The trial's attorneys have appealed the decision, though it's unlikely to affect the trial's proceedings.

James is suing Trump for creating false and misleading financial statements that inflated the value of various assets. The FBI found false reporting for 23 Trump Organization properties and assets from 2011 to 2021.

In 2015, Trump declared his triplex apartment in Trump Tower at $327 million, describing the property as 30,000 sq. ft. The lawyer general called the claim absurd given that the apartment was actually less than 11,000 square feet and that at that point, only one apartment in New York City ever sold for even $100 million.

Trump also said that his office building, 40 Wall Street, was valued at $530 million. Professional appraisers calculated a valuation that was less than half that, according to independent professional appraisers. In 2010 Donald Trump's Park Avenue condo's rent-stabilized units were estimated to be worth about $750,000. In 2012, the Trump Organization said that those same apartments were worth $50 million.

The attorney-general said the financial statements made Donald Trump's net worth appear to be $2.2bn to $2.2bn higher than it actually was.

What was the court's pre-trial ruling?

On 26 September, Engoron dealt a significant blow to Trump when he issued a pre-trial judgment ruling that he committed financial fraud. In his ruling, Engoron said that documents submitted as evidence showed that Donald Trump repeatedly used fabricated financial statements to artificially increase the value of his assets. He wrote that Donald Trump was operating in a 'fantasy world, not a real world'.

What is the impact of the pre-trial ruling?

In punishment, Engoron canceled the business certificates of Trump and other defendants, including his sons Donald Trump Jr. and Eric Trump, along with those belonging to Trump's companies. The Trumps will be unable to operate their real estate business in New York.

It is not clear what this will mean for the future of the Trump Organization, especially for its New York properties, such as Trump Tower and the Trump International Hotel & Tower. The future of the family business will be based on how much Engoron decides the Trumps will have to pay in monetary damages. If Trump loses the fine, it's likely he will have to sell some of his properties to pay it off.

Will Donald Trump be in court for a sentencing?

Donald Trump, who has maintained that the case is a 'witch hunt' and called Engoron on social media 'deranged', attended the New York trial on Monday.

Donald Trump Jr., Ivanka Trump and four other children, Donald Trump Jr. and Eric Trump Jr., have been put on a list of potential witnesses. That does not mean they will be called to testify, and they can choose not to show up, though the judge can use that against them when deciding the case.

Michael Cohen, Trump's former lawyer who served three years in prison for tax evasion, is among those who could make appearances as witnesses. Cohen told Congress in 2019 that Trump lied about his wealth in his financial statements, eventually sparking James' investigation into Trump. Allen Weisselberg, the chief financial officer of the Trump Organization, could also testify.

The case is a bench case, so there will be no jury. The court will decide the outcome of the case, according to Engoron.

What would happen if Donald Trump is found guilty?

As this is a civil trial, Donald Trump will not be sent to prison for his crimes. The judge found Donald Trump guilty of the charge in a pre-trial judgment. What's up in the air is exactly how much Donald Trump will have to pay for the fraud he commits.

The attorney general is trying to get disgorgement of profits or take back Trump's false financial statements. The statement was sent to banks and other lenders who helped the company buy properties such as Trump's golf club in Miami, the Trump International Hotel & Tower in Chicago and the Old Post Office building in Washington.

The attorney general is urging the Trump Organization to pay at least $250 million in disgorgement.

The trial is scheduled to begin on December 22 and will likely take much less time because Engoron already issued a major pre-trial ruling.