Trump's Fraud Trial Tirade Showcases His Fear Of Financial Ruin
Trump's Fraud Trial Tirade Showcases His Fear Of Financial Ruin
Facing a possible $370 million penalty experts say he can't afford, Trump unleashed a panicked courtroom rant attacking the judge who will decide his financial future.
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Thursday morning began with a bomb threat targeting the home of Judge Arthur Engoron. It ended with Donald Trump unleashing an explosive rant targeting Judge Engoron in the courtroom.
There’s a direct correlation between Trump’s fear of accountability and his desperate actions. That’s what we saw in the courtroom on Thursday.
At the conclusion of their closing statements in Trump’s civil fraud trial in New York City, Trump’s lawyer, Christopher Kise, asked if Trump could address the court.
This request came after Judge Engoron had previously revoked Trump’s ability to participate in closing arguments after his lawyers refused to agree to guidelines demanding that Trump limit his remarks to the facts of the case.
Judge Engoron acknowledged Kise's new request, asking Trump, “Do you promise to just comment on the facts and the law?”
Trump didn’t agree and instead chose to launch into a 5-minute tirade attacking New York Attorney General Letitia James and Judge Engoron - the man tasked with deciding the fate of his business.
"Well, I think, your honor, that this case goes outside just the facts. The financial statements were perfect…” Trump falsely proclaimed.
“This is a political witch hunt… We have a situation where I'm an innocent man, I've been persecuted by someone running for office… This is a fraud on me. What's happened here, sir, is a fraud on me," Trump said, addressing Judge Engoron directly.
"You have your own agenda. You can't listen for more than one minute. This has been a persecution," Trump snarled at Judge Engoron.
Judge Engoron looked at Kise and said, "Control your client."
But Trump wasn’t controlled, and their back and forth continued until Judge Engoron was forced to cut Trump’s rambling rant short. Trump’s angry tirade highlights how much is truly at stake in this trial and indicates he’s far more worried than his bravado alleges.
Needless to say, it’s not a smart tactic to go on the record in court, attacking the very same judge who is about to decide your punishment. This kind of speech might resonate on the campaign trail, but it backfires in a courtroom. This rant could also hurt him on appeal.
Former New York prosecutor Charles Coleman Jr. discussed this on MSNBC:
"I think that what he was trying to do was force the judge into a position where, by denying him an opportunity to speak, he would have created an issue on appeal for himself. Judge Engoron basically gave him the rope, and he hung himself, predictably.”
It’s important to note that this trial isn’t about whether or not Trump is liable for fraud. That has already been decided. Judge Engoron ruled that Donald Trump and his sons are liable for a decade of fraud at the Trump Organization. All that’s to be determined is what will happen to the Trump Organization and what the monetary penalties will be.
The NY AG lawsuit that triggered this trial found fraud related to assets that were inflated every year between 2011 and 2021, totaling over “200 false and misleading valuations.” The fraudulent scheme involved inflating the valuations of Trump Organization assets by as much as $2.2 billion to obtain loans with more favorable terms. Trump was also accused of deflating some assets to authorities for the purpose of tax avoidance.
Prosecutors argued that Trump needed these loans with more favorable rates because his cash position was weak. Experts on Trump’s finances claim that Trump’s “cash crunch” is an ongoing issue.
It can’t be overstated how consequential this trial is for Donald Trump as a businessman. Not only does this unmistakably poke a seismic hole in the myth of Trump’s image as a real estate mogul, Judge Engoron’s decision could also financially ruin him.
Let’s take a look at what Judge Engoron’s upcoming ruling could mean for Donald Trump and his family business.
What’s At Stake For Trump And His Family Biz?
The stakes are high for Donald Trump and the business that helped define his image as a successful businessman. It’s already been proven that he’s a fraud. Now, Judge Engoron will determine if this is the end of the Trump Organization in New York as we know it.
Attorney General Letitia James is now seeking $370 million in damages from Donald Trump and his sons, which is up from the initial $250 million ask. The Trump Organization could lose its business charter. Trump and his sons could be banned from ever doing business in New York again. The Trump Organization’s assets could be placed in a court-ordered receivership, where some assets could be sold off to pay the damages. This could be brutal for Trump because it appears he might not have the cash on hand to handle this.
New York Times Investigative Reporter Susanne Craig, who authored the groundbreaking reporting that revealed the extent of Trump’s family business frauds, offered insights to MSNBC’s Ari Melber about Trump’s likely cash crunch:
“The argument has been that he submitted these statements of financial condition in order to get better rates at the banks… The picture that the Attorney General painted this afternoon in court is that Donald Trump was, in fact, facing a cash crunch... [Trump] is facing coming into a judgment with this judge of penalties going up to $370 million. We're looking in the hundreds of millions of dollars range. The picture that was painted by the attorney general of his cash position is not good. And it also supports a lot of the analysis that we have done at The New York Times that he doesn't have a lot of cash on hand to meet a penalty of that size."
In a move that perhaps demonstrates this financial desperation, Trump defied a court order and transferred $40 million from accounts that the court was monitoring. This could also backfire on appeal.
Tristan Snell, former New York Assistant Attorney General and lead prosecutor in the Trump University case, told Lawfare that Trump had to borrow money to pay the $25 million Trump University fraud settlement, and that loan is actually one of the loans at issue in this Trump Org case. Snell also believes Trump has a liquidity issue and can’t make large cash payments of the size proposed in the penalty without liquidating assets.
The payments required by Judge Engoron’s upcoming ruling will likely be put on hold pending Trump’s appeal, but it’s likely that the bill will come due sooner or later. The case seems unlikely to be thrown out on appeal. Trump’s most credible defense is related to the statute of limitations, which could reduce the amount he has to pay but not nullify the entire case.
When this potential penalty does become due, Trump would likely have to sell off assets in order to make some of the payments. Also, the damage done by having the Trump Organization banned in New York could impact his ability to secure more loans. What bank in their right mind would lend to a proven fraud?
The idea that Trump has an ongoing cash crunch puts his 2024 campaign fundraising into perspective. Trump spends tens of millions of donor dollars on his legal bills, using his campaign as a grift to fund his legal defenses. Trump’s political strategy appears to supersede his legal one. He’s putting all his eggs in the 2024 basket. Winning the presidency seems to be his only way out.
This could end up being the worst year of Donald Trump’s life. He could be put into financial ruin. He could be convicted in multiple criminal trials. And he could lose the presidency, which is his last-ditch effort to save himself.
Americans should see Trump’s con for what it is and vote accordingly.
