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President Donald Trump holds up an executive order he signed in 2017.
AP Photo/Susan Walsh
Donald Trump has all kinds of tricks to avoid paper trails. He refuses to use email. He ditches cell phones. He’s famous for tearing documents to shreds. And when asked about something nefarious, like the inflated net worth statements he sent to lenders over the years, he feigns ignorance, even to authorities: “I didn’t get involved in it very much.”
But it’s hard to both convince lenders that you stand by documents and to persuade prosecutors that you had little to do with those same documents. That explains how Trump landed in his current predicament, accused by New York State of engaging in a years-long fraud by telling banks and insurers he had more money than he actually did. Judge Arthur Engoron sided with prosecutors Tuesday, ruling before the trial had even started that Trump was personally liable for fraud.
How could a judge come to such a conclusion before hearing a full trial? Documents. Prosecutors have submitted piles of them to the court. They have handed over statements of financial condition, the documents that borrowers submit to give their creditors an understanding of their balance sheets. More critically, prosecutors provided the backup documents to those financial statements, which lay out the distorted math that the Trump Organization used to arrive at its sky-high numbers. Tactics for boosting Trump’s net worth included counting square feet that did not exist, ignoring professional appraisals and adding arbitrary premiums. “That is a fantasy world, not the real world,” the judge wrote in his decision.
Engoron gave a succinct explanation for how he concluded that Trump was personally liable. “Each and every [statement of financial condition] was issued on behalf of ‘Donald J. Trump.’” There is much more evidence connecting Trump to the fraud, though. Year after year, on page after page, the documents sent to lenders repeated a line that followed the same rough formula: “The estimated value of” whatever number “is based on an evaluation by Mr. Trump in conjunction with his associates and outside professionals.”
Trump also signed his name to certify the accuracy of the financial statements. In addition, he personally touted the puffed-up financial statements to lenders. “Hopefully you will be impressed!” he wrote to the CEO of Deutsche Bank Securities in 2011.
On top of to the paper trail, Trump’s own words confirm his involvement. Trump admitted in a 2007 deposition that he looked over the statements with his former chief financial officer. He also said that he kept a copy on his desk.
Then there are the tapes. Forbes has previously released recordings of Trump inventing numbers as part of a long-running effort to climb higher on the annual Forbes 400 list of America’s richest people. In 2015, he seemed to hint that his lies to the media were part of a broader campaign to deceive his lenders: “It was good for financing,” he explained, when asked why Forbes’ valuations were so important to him.
Now facing a $250 million fraud suit, Trump is changing course, claiming that his statements did very little to help financing, given that they included a disclaimer. “I have a clause in there that says, don’t believe the statement, go out and do your own work. The statement is ‘worthless.’ It means nothing.” He added, “I think it had very little impact, if any impact on the banks.”
But if the statements were so meaningless, why would Trump have written a personal note to a Deutsche Bank executive touting the statements? The former president is a master of talking his way out of difficult situations. But it is harder to evade accusations when there is a clear paper trail, something Trump could not avoid in this case.
Trump lashed out after the decision Tuesday, calling the judge “deranged.” He also doubled-down on his decades-long lie about how much money he has, saying that his financial statements were inaccurate representations of his net worth—not because they were inflated but because they were too low. “My actual Net Worth,” he wrote on Truth Social, “is MUCH GREATER than the number shown on the Financial Statements.”
The case is scheduled to go to trial as soon as Monday.
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