Trump Organization Needed To Inflate Valuations Because They Were ‘Burning Through Cash,’ AG Argues At Fraud Trial

Topline Former President Donald Trump’s company fraudulently inflated the value of their assets as a way to stop the company from running out of cash, the New York attorney general’s office argued in court Thursday, as they delivered their closing arguments in a monthslong fraud trial that could result in the ex president being forced to pay $370 million.

Former President Donald Trump speaks after his defense team finished presenting closing arguments in ... [+] his civil fraud trial on Jan. 11 in New York City. Key Facts New York Attorney General Letitia James is suing Trump, his associates—including his sons—and the Trump Organization for allegedly fraudulently misstating the value of their assets on financial statements for personal gain, including to reflect a higher net worth for Trump and obtain more favorable business deals, such as loans with lower interest rates.

During closing arguments Thursday, the attorney general’s office argued the Trump Organization needed those favorable business terms because the company was “burning through cash” between 2012 and 2017, as it spent significant amounts of money on golf courses in Miami and Scotland and Trump’s former Washington, D.C., hotel.

If Trump had been forced to pay higher interest rates, he could have run out of cash or been required to cut back on his spending—including potentially on his 2016 campaign—the state argued in court. Trump attorney Christopher Kise objected in court to the state characterizing the Trump Organization as running out of cash, MSNBC reports , saying there was no evidence to support that.

While Trump’s lawyers spent their closing arguments Thursday trying to distance the ex president and his associates from any alleged fraud or issues with the financial statements, the state argued Trump and his co defendants had an intent to defraud, noting Trump signed off on the financial statements at issue and would have been aware some numbers—like the size of his Manhattan penthouse —were wrong.

Tangent Trump appeared in court in the morning during Thursday’s closing arguments and spoke on his own behalf, declaring he was an “innocent man” and the case against him is a “political witch hunt.” “The financial statements were perfect,” he said in court. “The banks are happy as can be.” The ex president was not in court during the afternoon session as the state presented his case, however, instead holding a press conference at his property at 40 Wall Street in which he continued to decry the case against him.

What To Watch For Judge Arthur Engoron, who’s overseeing the case, is set to issue a verdict in the case in the coming weeks, likely before the end of January. The judge will issue the verdict and decide punishments himself, as there’s no jury in the trial. The state is asking for a range of punishments against Trump and his co defendants, including forcing him to pay $370 million—up from $250 million the attorney general’s office initially requested—and barring Trump from the real estate industry in New York or leading any New York based companies for life.

James also asks for Trump’s sons to be prohibited from running New York companies for five years, and to block all defendants from making any commercial real estate acquisitions for five years. Engoron already found Trump and his co defendants liable for fraud before the trial began—though he still has to determine if that fraud was done knowingly—and ordered Trump’s business certificates to be canceled, though an appeals court has put that on hold.

Forbes Valuation Forbes estimates Trump’s net worth at $2.6 million as of October, with an estimated $426 million in cash and liquid assets—which means that being ordered to pay anything near $370 million could be a substantial financial hit, depending on how quickly he’s ordered to pay it. Trump’s estimated net worth between 2012 and 2017, the years the state highlighted in the closing arguments, ranged between $3.1 billion and $4.5 billion, with Trump recording his highest estimated net worth in 2015.

Key Background James has accused Trump and his associates of fraudulently misstating the value of assets more than 200 times between 2011 and 2021, including for some of Trump’s most high profile properties like Mar A Lago in Florida. Trump has strongly denied the claims, and his attorneys have argued in court that their valuations are subjective numbers based on Trump’s real estate expertise, and that Trump and his sons weren’t involved in the preparation of the statements, instead pinning the blame on the company’s accountants.

Trump and his attorneys have also claimed Trump’s actual net worth was higher than what was reflected on financial documents. While he still has to determine whether Trump and his co defendants committed the fraud knowingly, the judge struck down Trump’s claims that the valuations are subjective figures in his pretrial ruling finding the defendants liable for fraud, writing that Trump’s legal arguments are “out of a fantasy world, not the real world.” Further Reading Inside The Courthouse: Trump Team Makes Closing Arguments In Fraud Case (Forbes) Trump Gives His Own Closing Argument In Fraud Trial — Decries ‘Witch Hunt’ (Forbes) How Trump Fooled Deutsche Bank (Forbes) Bad Accounting Or Fraud? Trump’s Profit Numbers Don’t Add Up (Forbes) Trump Arrives In Court For Final Day Of Fraud Trial (Forbes) Trump Fraud Trial: Here’s What We Learned From Months Of Testimony As Case Nears End (Forbes).