New York Attorney General Letitia James laid out a strong legal case against Donald Trump, his three eldest children and the Trump Organization in her $250 million civil lawsuit — but the former president may be able to drag the legal action out for several years, former prosecutors said.
“This is going to be a very difficult case for the defendants to win,” said Duncan Levin, a former assistant district attorney and asset forfeiture chief in the Manhattan district attorney’s office. “One of the best defenses to this matter is to delay, delay, delay.”
James sued the Trumps and top executives at their company last week in connection with her yearslong probe into its business practices. The suit alleges more than 200 instances of fraud over 10 years and moves by Trump that “wildly exaggerated his net worth by billions of dollars.”
James is seeking to permanently bar members of the Trump family from serving as officers of New York-based companies, as well as monetary damages and other penalties, including a five-year ban on the former president and his company from entering into any commercial real estate acquisitions in the state.
Here are some possible defenses Trump’s lawyers may try:
‘Let’s stall this’
John Moscow, a former deputy chief of the Manhattan district attorney’s investigations division, said he could “see a projected defense strategy of saying, ‘Let’s stall this.'”
“Delay is always in the defendant’s favor,” and it would allow Trump to enjoy the “fruits” of his alleged scheme for as long as possible, unless the courts try to hold his feet to the fire, said Moscow, now a white-collar defense lawyer, adding that such cases “can go on forever.”
Judges at this point should understand that Trump is “not seeking his day in court,” Moscow said, pointing to his history of drawing out litigation with numerous motions and appeals.
Defendants in New York can easily use various stalling tactics, Levin said, and “good lawyering can draw these things out for many years.”
It’s a ‘witch hunt’
Trump has denied any wrongdoing. He and his lawyer Alina Habba have called James’ lawsuit a politically motivated “witch hunt.” They used that argument in a federal lawsuit filed late last year to stop the probe, contending that it was “guided solely by political animus and a desire to harass, intimidate, and retaliate against a private citizen who she views as a political opponent.”
To bolster the claim, they pointed to disparaging statements James had made about Trump — including one to NBC News after her 2018 election that she planned to “use every area of the law to investigate” transactions made by the Trump family and their business.
A judge dismissed the suit in May, finding that James’ probe had a “legitimate factual” basis, but Trump and his lawyers and allies have continued to try to undermine the credibility of the investigation in public remarks.
If Trump is re-elected in 2024, Moscow said, he could even seek to delay the lawsuit for the duration of his next potential term by re-invoking past arguments he has made in other lawsuits surrounding presidential power.
Their “number one defense is in the court of public opinion,” Levin said.
‘Never had a complaint’
In posts on social media and an interview with Fox News after the suit was filed, Trump began laying out his own defenses to James’ claims. He argued that there is no allegation that any of the supposedly duped banks and insurers were harmed and that the financial statements included disclosures saying they had not been audited.
James, Trump wrote on Truth Social, “is spending all of her time fighting for very powerful and well represented banks and insurance companies, who were fully paid, made a lot of money, and never had a complaint about me.”
But the former prosecutors say those arguments are unlikely to succeed in court, because James won’t need to prove harm suffered by any victims for Trump to lose.
The lack of damages might be a mitigating factor for Trump when it comes time a judge to decide on financial penalties, but it wouldn’t get him off the hook, Levin said. Just because the banks got paid back their money “doesn’t mean a crime hasn’t been committed.”
Moscow noted that the suit — which alleges that Trump and his company violated a New York law targeting those who commit repeated fraud or illegal acts in business transactions — doesn’t actually seek money damages on behalf of the banks and insurance companies.
It does, however, seek a remedy that would require Trump to give up the profits he pocketed from his alleged illegal or wrongful conduct conducts, including inflating his financial statements to obtain more favorable loans and lower premiums.
Blame it on the banks
A route Trump might take with some success, Levin said, would be to heap blame on the banks for not noticing that the valuations were too rosy.
“The core of that argument is the financial statements that were relied upon by these banks were marked as non-audited financials,” Levin said. “While the AG is making the statement that the valuations are far outside what they should be, the other part is the people who were on the receiving end of these financial statements were sophisticated Wall Street banks. They know how to read these financial statements.”
But that is unlikely to deliver Trump a win, Levin said, as James’ “incredibly thorough” complaint alleges that the company had falsely claimed that its statements were prepared in conformity with “generally accepted accounting principles” and that many of the valuations were so outsized — including saying a property valued at $200 million on Wall Street was worth over $500 million — that they couldn’t reasonably be considered honest mistakes or typical accounting tricks.
“It’s going to be very difficult to overcome some of that,” Levin said of the inflated financial statements.
Moscow also believes Trump and his company will struggle to explain away many of their alleged misrepresentations, such as his claim that his Trump Tower apartment was 30,000 square feet when it was really 10,000 square feet.
Trump would have been well aware of the size of the apartment because “he built it; he lived there,” Moscow said.
The civil suit is the culmination of a yearslong investigation by James’ office into the Trump Organization’s business practices, during which the former president and his son Eric Trump invoked their Fifth Amendment rights against self-incrimination hundreds of times to evade deposition by investigators. (Sources have said neither Ivanka Trump nor Donald Trump Jr. claimed the privilege during their depositions.)
While taking the Fifth can’t be used against a defendant in criminal court, asserting the privilege in New York civil cases can be used to draw an “adverse inference” against the person testifying.
Trump has been in the crosshairs of the attorney general’s office before, including for actions involving Trump University and the Trump Foundation, which were settled for $25 million and $2 million, respectively.
Asked whether she hoped to settle the business fraud case, James told reporters last week that while she has already rejected settlement offers from Trump’s side, her “door is always open” to reach an agreement out of court.
Trump indicated that isn’t likely, telling Fox News host Sean Hannity in an interview Wednesday, “I didn’t want to settle, because how can you? Even if I paid a very small amount, you’re sort of admitting guilt.”
Editor’s note: Duncan Levin represented former Trump Organization CFO Allen Weisselberg’s ex-daughter-in-law, who turned over evidence about the family’s finances to the attorney general and the district attorney’s office last year.