NEW YORK ATTORNEY GENERAL SUES TRUMP AND KIDS FOR BUSINESS FRAUD

New York Attorney General Letitia James filed a civil lawsuit – for an estimated $250 million in penalties – against former President Donald Trump, three of his adult children, and the Trump Organization – for alleged business fraud.  The suit would also ban the former President, his three children and members of their executive team from operating businesses in New York state.  Former U.S. Attorney Kendall Coffey joins us for analysis of the case.

Aired on September 22, 2022

TRANSCRIPT

> THE PATTERN OF FRAUD AND DECEPTION THAT WAS USED BY MR. TRUMP BE THE TRUMP ORGANIZATION FOR THEIR OWN FINANCIAL BENEFIT IS ASTOUNDING.

INFLATING THE VALUES OF ASSET BY WHATEVER MEANS NECESSARY TO INCREASE MR. TRUMP'S PURPORTED NET WORTH.

GOOD EVENING, AND WELCOME TO 'METROFOCUS.'

THAT WAS NEW YORK ATTORNEY GENERAL LETITIA JAMES ANNOUNCING A SWEEPING LAWSUIT YESTERDAY AGAINST FORMER PRESIDENT DONALD TRUMP, THIEF HIS CHILDREN, AND THE TRUMP ORGANIZATION.

THE CIVIL LAWSUIT ACCUSES THE FORMER PRESIDENT OF NUMEROUS ACT OF FRAUD AND DELIBERATELY INFLATING HIS NET WORTH BY BILLIONS OF DOLLARS IN ORDER TO OBTAIN LOANS, INSURANCE, AND TAX BREAKS.

THE SUIT INVOLVES SOME OF MR. TRUMP'S MOST PRIZED ASSET, INCLUDING PROPERTIES IN MANHATTAN.

IT SEEKS $250 MILLION IN PENALTIES AND WOULD ALSO LOOK TO BAR THE TRUMPS FROM EVER RUNNING A BUSINESS IN NEW YORK STATE AGAIN.

IN A STATEMENT POSTED ON THE TRUTH SOCIAL WEBSITE, TRUMP CALLED IT ANOTHER WITCH-HUNT MOTIVATED BY JAMES' RE-ELECTION BID.

JOINING US TO UNDERSTAND ALL THIS IS KENDALL COFFEY, FORMER ATTORNEY FOR THE SOUTHERN DISTRICT OF FLORIDA, ONE OF THE NATION'S LARGEST PROSECUTION OFFICES.

KENNEDING, WELCOME.

NICE TO SEE YOU AGAIN.

THANKS FOR INVITING ME, JACK.

LET'S START OFF WITH THE LAWSUIT ITSELF.

I MENTION IN THE INTRODUCTION, IT IS A CIVIL LAWSUIT, BUT YOU HEAR WORDS WITHIN ITS CONTEXT THAT SOUND LIKE WORD YOU HEAR IN CRIMINAL INDICTMENTS SUCH AS DEFRAUDING BANKS OR INSURANCE COMPANIES.

EXPLAIN TO US BRIEFLY FOR CONTEXT THE DIFFERENCE BETWEEN THIS AS A CIVIL LAWSUIT AND A FEDERAL CHARGE OR A CRIMINAL CHARGE I SHOULD SAY.

THERE ARE A LOT OF CATEGORIES, ESPECIALLY OF WHITE COLLAR CRIME, ALLEGED FINANCIAL IMPROPRIETIES, FALSIFICATIONS TO BANKS, THAT CAN BE SUED UPON CIVILLY BECAUSE THEY VIOLATE THE CIVIL LAW, AND ONE CAN SEEK DAMAGES AS A PRIVATE PARTY OR NEW YORK ATTORNEY GENERAL.

AND THOSE SAME ACTS AND CONDUCT, IF PROVEN IN TERMS OF INTENTIONALITY BEYOND INTO THE EXCLUSION OF A REASONABLE DOUBT, CAN ALSO BE PROSECUTED AS CRIMES.

AND THE SYSTEM ALLOWS YOU TO HAVE WHAT WE CALL PARALLEL INVESTIGATIONS OR PARALLEL CASES WHERE BOTH OF THEM GO ON AT THE SAME TIME.

NOW, HERE, TO BE VERY CLEAR, THERE HAVE BEEN NO CRIMINAL CHARGES BROUGHT AGAINST THE TRUMP FAMILY, AND NONE AT ALL WITH RESPECT TO THIS SET OF ALLEGATIONS.

NEVERTHELESS, THE CONDUCT CAN SEEM TO BE CRIMINAL TO A LOT OF MEMBERS OF THE PUBLIC, BUT IT'S IMPORTANT TO REMEMBER THAT THESE, ALTHOUGH THEY ALLEGED FRAUD, THESE ARE CIVIL ALLEGATIONS BASED ON THIS LAWSUIT NO ONE'S GOING TO JAIL.

JUST EXPLAIN AGAIN, LAST POINT ON THIS DIFFERENCE HERE, ONE OF THE SIGNIFICANT DIFFERENCES BETWEEN A CIVIL LAWSUIT AND CRIMINAL PROSECUTION IS THE STANDARD OF PROOF.

JUST GIVE US A QUICK -- I KNOW YOU HAVE BEEN A LAW PROFESSOR FOR A NUMBER OF YEARS.

GIVE US A QUICK INDICATION OF WHAT THE DIFFERENCE IS BETWEEN THE TWO.

WELL, AS WE KNOW, TO PROVE A CRIMINAL CASE YOU HAVE TO PROVE ALL THE ALMOSTS, WHICH INCLUDES REQUISITE INTENTION, STATE OF MIND, BEYOND THE EXCLUSION OF A REASONABLE DOUBT, AND THAT CAN BE A CRITICAL BURDEN PROSECUTORS SOMETIMES CAN MEET AND WHY THERE CAN BE CASES WHERE IT SEEMS LIKE SOMETHING'S REALLY WRONG HERE, BUT THEY NEVER RESULT IN A CRIMINAL PROSECUTION BECAUSE A THAT HEAVY BURDEN.

A CIVIL CASE JUST GOT APPROVED MORE LIKELY THAN NOT IT HAPPENED.

AND OF COURSE THE CONSEQUENCES OF A CIVIL CASE COULD BE A LOT OF MONEY.

THERE COULD BE DISQUALIFICATIONS OF TRUMP FAMILY MEMBERS, BUT THEY DON'T INCLUDE PRISON TIME.

LET'S TALK ABOUT SOME OF THE ANTICIPATED DEFENSES HERE BASE ON COMMENTS WE'VE SEEN BY THE FORMER PRESIDENT OR HIS REPRESENTATIVES.

YOU CAN GIVE US A SENSE OF WHAT THEY WOULD ARGUE AND THE FLIPSIDE BY THE STATE ATTORNEY GENERALS AFTER OFFICE.

ONE OF THE MORE PROMINENT DEFENSES SUGGESTED HERE WAS THAT THE BANKS DIDN'T LOSE ANY MONEY.

THEY ALLEGE THIS WAS NOT A SITUATION WHERE THE LOAN WAS DEFAULTED ON BE THE BANK WAS OUT MILLIONS OF DOLLARS.

THE BANKS, THEIR LOANS WERE REPAID OR ARE CURRENT.

TELL ME HOW THAT WOULD PLAY OUT FROM THE ZBEFS WHAT THE RESPONSE WOULD BE FOR THE ATTORNEY GENERAL.

FROM THE STANDPOINT OF THE PUBLIC, IT MAKES THE CASE LESS CULPABLE, LESS GUILTY.

BUT IT IS STILL A CRIME TO SUBMIT FALSE FINANCIAL RECORDS TO A BANK.

EVEN IF IT'S REPAID, BOTH UNDER CIVIL LAW, CRIMINAL LAW, STATE, AND FEDERAL.

WHAT THE A.G.'S OFFICE DID THOUGH WAS MADE THE POINT THAT THIS ISN'T SCHISMLY A NO HARM, NO FOUL DAYS.

WHAT HAPPENED IS BECAUSE ACCORDING TO THEIR THEORY, THE TRUMP ORGANIZATION GROSSLY INFLATED ITS ASSETS, IT GOT BETTER FINANCIAL TERMS.

IN OTHER WORDS, THE BANK GAVE THEM LESS OF AN INTEREST RATE, MAYBE LESS OTHER FEES, AND SO WHETHER OR NOT IT WAS REPAID, THE TRUMP ORGANIZATION GOT A BIG FINANCIAL BENEFIT.

AT ONE POINT IN THE COMPLAINT THEY SAY IT'S $150 MILLION BETTER POSITION WITH RESPECT TO THE FINANCING AND, LOGICALLY THAT MEANS THE BANKS COULD HAVE, SHOULD HAVE, WOULD HAVE GOTTEN A LOT MORE MONEY BASED ON THE TRUE, NOT THE INFLATED -- THE TRUE FINANCIAL CONDITION OF THE TRUMP ORGANIZATION.

WHAT ABOUT THE ARGUMENT THAT GOES, WELL, YOU KNOW WHAT?

ALL THESE BANKS, THEY HAD THEIR ABILITY TO DO THEIR OWN EVALUATIONS OF THIS PROPERTY, AND IF THEY ACCEPTED OURS, WELL, THAT WAS THE BUSINESS DEAL.

THAT'S ANOTHER GREAT POINT THAT SORT OF FOLLOWS IN A SIMILAR WAY.

YES, IN THE REAL WORLD, IN THE FINANCIAL WORLD, BANKS DO PLENTY OF THEIR OWN INVESTIGATION, AND THEY HAVE PROFESSIONALS ON STAFF AND SEASONED BANK OFFICERS THEMSELVES WHO CAN MAKE DETAILED JUDGMENTS ABOUT VALUATIONS, AND THEY'RE OFTEN VERY SKEPTICAL OF BORROWERS WHO HAVE AN ETERNAL OPTIMISM ABOUT WHAT THEY THINK THEIR ASSETS ARE WORTH.

NEVERTHELESS, THE FACT THAT THE BANK WAS PERHAPS NOT DOING EVERYTHING IT SHOULD HAVE DONE ON ITS END OR THE FACT THAT THE BANK IN EFFECT DIDN'T DO ENOUGH DUE DILIGENCE TO KNOW THAT THE MISINFORMATION WAS WRONG, THAT'S NOT REALLY A DEFENSE, AND IT COMES DOWN TO, YOU CAN'T BASICALLY FALSIFY THINGS, TAKE ADVANTAGE OF, YOU KNOW, FALSE INFORMATION, AND THEN PUT THE VICTIM ON TRIAL BY TELLING THE VICTIM, HEY, YOU SHOULD HAVE KNOWN BETTER.

YOU NEVER SHOULD HAVE BELIEVED MY FINANCIAL STATEMENTS.

HOW ABOUT -- YOUR LAST COMMENT GETS ME TO THE NEXT QUESTION, WHICH IS -- AND AGAIN, WE HEARD THIS I BELIEVE FROM THE FORMER PRESIDENT AND HIS REPRESENTATIVES WITH REGARD TO THIS.

THE REAL ESTATE INDUSTRY, IT'S A NOTORIOUSLY SUBJECTIVE BUSINESS TRYING TO PUT VALUATIONS ON PROPERTIES.

EXCUSE ME.

AND WE KNOW THAT -- AND AGAIN WE'VE HEARD THIS -- OFTEN TIMES, FOR WHATEVER REASON, THEY MIGHT SAY, YEAH, THIS IS WORTH A LOT MORE.

OR MIGHT BE IT'S NOT WORTH SO MUCH.

BUT AGAIN, THE ARGUMENT SEEMS TO BE, HEY, IT'S THE WAY EVERYBODY DOES BUSINESS IN THE REAL ESTATE INDUSTRY.

WHAT ABOUT THAT ARGUMENT IS THIS.

THAT GETS CLOSER TO A REAL DEFENSE WHICH IS VALUATIONS OF REAL ESTATE ARE VERY SUBJECTIVE.

WE'VE ALL, JACK, HAD OPINIONS WHERE EXPERTS ON REAL ESTATE GO INTO A COURT AND TESTIFY AND HAVE TOTALLY DIFFERENT OPINIONS OF THE VALUE OF REAL ESTATE TO HAVE VALUE OF A BUSINESS.

SO I THINK A KEY AND PERHAPS THE MOST SIGNIFICANT PART OF THE DEFENSE WOULD BE, LOOK, THE TRUMP ORGANIZATION HAD THEIR VIEW OF THE VALUES.

YOU COULD HAVE FIGURED IT OUT FOR YOURSELF, AND THE TRUMP ORGANIZATION AND FAMILY MEMBERS WEREN'T INTENTIONALLY LYING.

THEY WERE OPTIMISTIC, BUT THEY WERE TAKING ACCOUNT OF MAYBE SOME OTHER FACTORS THAT WERE ON THE LANDSCAPE, THAT WERE ON THE HORIZON, THAT COULD REALLY ENABLE THEM TO JUSTIFY IT.

FOR EXAMPLE, THERE WAS ONE PROPERTY THAT I THINK WAS SAID TO BE, IN TERMS OF WHAT REAL ESTATE APPRAISERS THOUGHT, MAYBE $200 MILLION VALUE.

AND THAT WAS AROUND 2010.

WELL, TRUMP EXPERTS MIGHT SAY THE VALUES WENT UP A WHOLE LOT AFTER 2010.

REMEMBER, WE WERE COMING OUT OF THE GREAT RECESSION.

SO I THINK YOU CAN EXPECT A LOT OF DEFENSE EFFORT AND TESTIMONY ON THE BASIC PRINCIPLE THAT, YOU KNOW, MAYBE WE'RE OFF.

MAYBE YOU DON'T AGREE WITH OUR NUMBERS, BUT THESE WERE INTENDED TRUTHFULLY, NOT INTENDED TO BE A FRAUD THAT CAUSED IN EFFECT US TO GET BILLIONS OF DOLLARS OF INFLATED VALUES AND CAUSED US TO GET MUCH, MUCH BETTER FINANCIAL TERMS AND BASICALLY SAVE $150 MILLION OR MORE BECAUSE WE WERE VIEWED AS A MUCH STRONGER BORROWER WITH MUCH GREATER FINANCIAL VALUE.

THERE'S AN INTERESTING TWIST TO THIS, AND IT MIGHT BE SURPRISING TO SOME PEOPLE.

IT'S BEEN REPORTED THE FORMER PRESIDENT BE AT LEAST ONE OF HIS CHILDREN DECLINED TO ANSWER QUESTIONS.

THEY WERE ORDERED TO SIT FOR A DPGS BUT ESSENTIALLY RELIED ON THEIR FIFTH AMENDMENT RIGHTS NOT TO ANSWER QUESTIONS PERHAPS HUNDREDS OF TIMES DURING THIS DEPOSITION.

JUST WATCH TELEVISION TO KNOW IF IN A CRIMINAL MATTER YOU RELY ON YOUR FIFTH AMENDMENT THAT CANNOT BE USED AGAINST YOU.

IN A TRIAL A JURY WOULD NOT KNOW I DID THAT.

WHAT ABOUT IN A CIVIL CASE?

ISN'T THERE A DIFFERENCE HERE?

THERE'S A HUGE DIFFERENCE.

AND WHILE IN A CIVIL CASE IN A DEPOSITION, YOU HAVE THE RIGHT TO TAKE THE FIFTH AMENDMENT -- AND A LOT OF TIMES ON ADVICE OF COUNCIL, PEOPLE DO WHEN THEY'RE BEING INVESTIGATED FOR ALLEGE FRAUD.

THEY TAKE THE FIFTH AMENDMENT ON ADVICE OF COUNSEL, BECAUSE AT THE END OF THE DAY IT'S A FAR GREATER CONCERN WHETHER YOU ARE AT RISK OF CRIMINAL PROSECUTION THAN YOU GET SUED, EVEN BY THE ATTORNEY GENERAL'S OFFICE, BECAUSE LAWSUITS GIVE YOU PLENTY OF TIME TO FIGHT, TO DEFEND.

BUT A FEDERAL INDICTMENT FROM THE SOUTHERN DISTRICT OF NEW YORK IS TERRIFYING, AND THOSE HAVE AN OVERWHELMING LIKELY HAD OF WINDING UP WITH SOME FORM OF A CONVICTION.

SO TRUMP'S LAWYERS PROBABLY DID THE PRUDENT THING INSTRUCTING HIM TO TAKE THE FIFTH AMENDMENT.

BUT AS YOU SAY, IT HAS A VERY SIGNIFICANT CONSEQUENCE IN A CIVIL CASE BECAUSE IF YOU TAKE THE FIFTH AMENDMENT IN A CIVIL CASE, THE JUDGE OR JURY IS ORDINARILY ALLOWED TO INFER, TAKE AN INFERENCE THAT THE TESTIMONY YOU REFUSED TO PROVIDE WOULD BE HARMFUL TO YOU, THAT THE TESTIMONY THAT YOU REFUSE TO PROVIDE BY INVOKING THE FIFTH AMENDMENT COULD ACTUALLY TEND TO PROVE THE CASE THAT'S BEING BROUGHT AGAINST YOU.

AND SO YEP, CRIMINAL PROTECTION IS IMPORTANT.

IT'S RIGHT IN THE CONSTITUTION.

BUT YOU DO CREATE SIGNIFICANT CONCERNS WHEN YOU TAKE THE FIFTH AMENDMENT WITH REGARD TO A CIVIL CASE.

AND I REFER TO IT AS A CLIENT OR DEFENDANT FIGHTING WITH ONE HAND BEHIND THEIR BACK.

VERY HARD TO OVERCOME THE ASSERTION OF THE FIFTH AMENDMENT.

COULD THEY, NOW THAT THEY'VE SEEN ALL THE ALLEGATIONS THAT THE STATE OF NEW YORK IS PRESENTING, COULD TRUMP'S LAWYERS SAY, WE'LL REVIEW THIS AND CONSIDER TESTIMONY NOW?

I ASSUME SO.

TAKE A LOOK AT IT.

KENDALL, THIS HAS BEEN VERY HELPFUL.

THE NEXT STEP YOU NEXT SECOND DOWN THIS HAS BEEN REFERRED TO THE SOUTHERN DISTRICT OF NEW YORK OF NEW YORK AND THE INTERNAL REVENUE VIS.

THANKS.

YOU BE WELL.

THANKS FOR HAVING ME ON, JACK.

©2022 WNET. All Rights Reserved. 825 Eighth Avenue, New York, NY 10019

WNET is a 501(c)(3) nonprofit organization. Tax ID: 26-2810489