New York vs. Trump: What You Need to Know for Day One of the $250M Civil Fraud Trial

Former President Donald Trump is expected to personally appear in court on Monday morning for the start of a $250 million civil fraud trial that could put him out of business in New York.

The case is nearly half a decade in the making.

In March 2019, New York Attorney General Letitia James launched her investigation into Trump, his family, and his businesses after Trump’s ex-fixer Michael Cohen told Congress the then-president artificially inflated his assets for tax benefits. 

The state attorney general scrutinized Trump’s businesses for more than three years before filing her massive civil lawsuit in September 2022. 

A little less than a week before the trial's start date, Manhattan Supreme Court Justice Arthur Engoron issued a ruling finding Trump liable for fraud and imposing the so-called “corporate death penalty” on his key New York business, potentially wresting the former president of control over his signature New York properties like Trump Tower, 40 Wall Street, Trump Park Avenue and the Seven Springs Estate.

To prevail on her remaining six claims, the AG will have to prove the conduct also violated ​​New York Penal Law statutes prohibiting falsification of business records, issuing false financial statements and committing insurance fraud. Her office plans to call dozens of witnesses to make that case, including Trump, his sons Eric and Donald Trump Jr., and his daughter Ivanka Trump. They have asked the judge for a disgorgement of "ill-gotten gains" — at a price tag to be determined at trial — and an order barring Trump, his sons Eric and Donald Trump Jr., and two of his business associates from ever serving as a director of a New York corporation.

In the 214-page complaint, James accused Trump of inflating his business assets by billions in statements of financial condition (SFCs) that he submitted to banks and insurers. She also accused Eric Trump, Donald Trump Jr., and Ivanka Trump of engaging in fraud, along with key members of the Trump Organization, including general counsel Allen Weisselberg and comptroller Jeffrey McConney.

The attorney general sought — and obtained — a rare order effectively revoking the certificates of Trump’s key businesses and putting them under a receivership. If Trump doesn’t win to overturn the order on appeal, experts believe he could lose control of his signature New York properties, including Trump Tower, 40 Wall Street, Trump Park Avenue, and the Seven Springs Estate in Westchester. 

Trump has accused the attorney general and trial judge of bias, noting that both were elected on the Democratic ticket. His attorney Christopher Kise, who also represents Trump in the classified documents case, has argued that nobody was harmed by the alleged fraud, since the Trump Organization’s financial statements went to sophisticated parties like Deutsche Bank, which performed their own due diligence. 

In finding Trump liable for fraud, Engoron ruled that the AG did not need to prove harm, only a pattern of “repeated and persistent fraud.” 

In the past, New York’s Appellate Division, First Department has largely upheld Engoron’s orders — with one notable exception. That intermediate appellate court affirmed a prior contempt of court finding against the former president in contempt of court for failure to comply with discovery orders and recently rejected a last-ditch effort to prevent the start of Monday’s trial. The appeals court did, however, dismiss all claims against daughter Ivanka Trump under the statute of limitations

The attorney general's witness list revealed plans to call the former president and all three of his adult children named in the original complaint, but they are not expected to take the stand until later in the trial. The government also plans to call Cohen, whom Trump sued in Florida, alleging breach of contract. Trump had been scheduled to sit for a deposition in his lawsuit against Cohen on Tuesday. A federal judge postponed that testimony, saying that Trump called it "imperative that he attend his New York trial in person — at least for each day of the first week of trial when many strategy judgments had to be made."

The New York proceedings could stretch on for months. 

In early September, Judge Engoron issued a scheduling order anticipating the trial would last until Dec. 22, 2023, but there have been multiple shake-ups to the court’s calendar since that time. His preliminary ruling was expected to streamline the trial, but Trump’s defense team now declared an intention to call 127 witnesses, potentially making the trial even longer than initially estimated.