Major NY Lawsuit Could Financially Devastate Donald Trump
For decades, there have been allegations that former president Donald Trump has acted poorly in business deals. Despite many claims that he’s done things like cheated his contractors out of their wages, it’s been hard to hold him accountable. However, the New York Attorney General finally thinks she might have a valid case against Trump. This upcoming lawsuit may result in massive financial losses for Trump.
NY Attorney General Accuses Donald Trump of FraudRead More »
The suit claims that Trump and his associates routinely misrepresented him as being worth billions more than he actually is. Trump then allegedly used these misleading claims to get banks to loan him money at a much lower rate than they otherwise would have. The lawsuit claims that between 2011 to 2021, Trump saved over $150 million with this fraudulent scheme.
Trump Only Has a Few Possible Defenses
Due to the nature of the Donald Trump lawsuit, Trump’s legal team only has a few options for defending him. They can claim that the fraud did not happen at all, say the false statements were mistakenly made in good faith, or say that the fraud did not cause any harm. The state already has an impressive amount of evidence gathered, so it may be hard for Trump’s team to claim that he did not purposefully misrepresent his wealth to get more favorable terms for loans.
Instead, it seems like they will primarily be focused on attempting to prove that no harm was done. In any civil lawsuit, if the plaintiff was not damaged, they cannot get compensation. In a statement released by Trump’s company, they claim that the banks were not harmed by any supposed lies. Since the loans were paid in full, the banks did not end up losing money on the loans.
Ultimately, the case may come down to whether or not the jury believes the banks were harmed by the alleged Donald Trump fraud. While it is true that they did not lose the money lent to Trump, they certainly lost the extra interest they would have charged if they had known Trump’s net worth was so low.
The Civil Suit Might Be Easier to Prove Than Criminal Charges
If the claims of the NY lawsuit against Trump are true, he has violated several New York laws related to fraud. However, Attorney General James has made the decision to only charge him in the civil court, not the criminal court. Why is James doing this? There are several potential benefits to hearing the case as a civil matter instead of a criminal one.
First of all, the standard of proof is far more lenient in civil cases. In a criminal case, the prosecution must prove the defendant’s guilt beyond a reasonable doubt. Meanwhile, in a civil suit, they only have to prove that it is more than likely that the alleged actions occurred. Instead of needing unanimous agreement from a jury, a civil case in New York only requires five-sixths of the jurors to agree.
Even more importantly, trying the case in a civil suit helps the court address Trump’s chosen method of dealing with allegations. In the majority of criminal cases against him, Trump has refused to testify. His team routinely fights to keep him from being deposed as a witness, and when he must testify, he pleads the fifth. In a civil trial, this could work against him. During civil cases, the judge can instruct the jury to assume alleged facts are true if the defendant refuses to testify. This would allow the jury to automatically accept James’ evidence as fact because Trump may not offer an alternate explanation in court.
There Have Already Been Many Conflicts in the Early Stages of the Suit
So far, the lawsuit is still in the very early stages. These sorts of massive civil cases take a lot of time, so it may be months or even years before any statements are heard in court. However, even though the main legal battle hasn’t begun yet, there are already many conflicts.
Currently, the two sides are arguing over who should hear the case. Currently, Supreme Court Justice Arthur Engoron is the judge for the case. He has already encountered Trump in court before, where he ordered Trump to be deposed during the criminal investigation before the civil lawsuit was filed.
Attorney General James argues that Judge Engoron is already up-to-speed on all the particulars of the case, and since he ruled on earlier matters in the case, the suit is already in his jurisdiction. However, Trump’s legal team claims that the case should instead be handled by the Commercial Division of the state court. They believe this specialized court is better equipped to handle corporate matters, and some suspect that the team doesn’t want Engoron to hear the case since he has ruled against Trump in the past.
In addition to the disagreement about the suit, the latest Donald Trump news also mentions some legal injunctions related to Trump’s finances. James filed a request on October 13 requesting that the court block Trump from transferring any assets to a new company. There are concerns that he may put his assets in this new corporation to avoid having to pay fines if he loses the suit.
What Happens If Trump Loses?
If Trump’s team eventually loses this case, it could lead to some consequences that even he cannot ignore. Unlike previous lawsuits that have only been over small sums, Trump stands to lose up to $250 million. If he is unable to defend himself against the suit, he may have to pay the banks for the lost funds and pay punitive damages and legal fees. This sum could be high enough to put a dent in Trump’s bank account. With a current net worth of around $3 billion, the lawsuit judgment could take up to one-twelfth of his total assets.
Even worse for Trump, Attorney General James is also attempting to ban the Trump Organization from running their business. The Trump fraud lawsuit would keep them from buying commercial real estate for five years or applying for business loans. If Trump loses this portion of the lawsuit, his business may be unable to operate within the State of New York altogether.
This consequence in a lawsuit is somewhat rare, but there is precedent. In cases where a businessperson has committed massive fraud, the state can bar them from doing anything where they could perpetuate fraud in the future. If the court does rule against Trump, these consequences could be even worse than the fines and fees he must pay. They could potentially cause him to lose out on major opportunities for his company.
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