Fraud like nobody's watching: Trump was probed for 5 years, and still wouldn't clean up his act

Trump couldn’t stop with the fugazi math, even while under a state microscope for five years. Chris Seward/AP, left. LM Otero/AP, right.

• Trump’s fraud-trial verdict targets his cash, his NY business address, and his control of Trump Org.
• The verdict notes that Trump continued to commit fraud even while under investigation.
• Now, any fuzzy math will be sent back to Trump for corrections by his court-appointed monitor.

Donald Trump’s fraud verdict targets three things he values dearly: his cash, his New York business address, and the Trump Organization steering wheel.

It’ll take many months of appeals to get there. But if Friday’s verdict is upheld, Trump must relinquish $355 million in ill-gotten gains, plus yet-tallied interest that could approach $100 million.

He’ll be banned for three years from running a New York business, from borrowing from a New York-registered bank, and from buying commercial property anywhere in the state.

And his finances will continue to be overseen by a now strengthened court-appointed monitor who, so far, no appeal effort has managed to dislodge.

These penalties — his punishment for a decade of fraud-filled financial statements he sent to banks and insurers — did not sneak up on the GOP frontrunner.

For the past five years, Trump has known he was being first probed, then sued, then put on trial for his financial frauds.

He’s known he was being looked at since March, 2019, when New York Attorney General Letitia James sent her first blizzard of subpoenas snowing down on his banks, accountants, and assessors.

Yet Trump has spent these five years frauding like nobody’s watching.

He dodged his subpoenas. He continued inflating his worth in financial statements by as much as $3.6 billion a year.

And even while being watched, these past 14 months, by a court-installed independent monitor, he still hid a transfer of $40 million, state Supreme Court Justice Arthur Engoron noted in Friday’s verdict.

The verdict actually ratchets back many penalties James sought. Trump’s properties won’t be placed under receivership and sold, and he’ll lose his Trump Org steering wheel for three years, rather than permanently.

But Trump’s persisting addiction to fraud, even under an investigatory microscope for five years — means he’ll be watched far more closely now.

Trump’s monitor, retired federal judge Barbara Jones — still in place despite his prior appeals — has for 14 months reviewed all of his company’s financial disclosures to third parties after they were sent out.

Now, as the verdict orders, “the Trump Organization shall be required to obtain prior approval — not, as things are now, subsequent review — from Judge Jones before submitting any financial disclosure to a third party, so that such disclosure may be reviewed beforehand for material misrepresentations.”

That means for at least the next three years, Jones will be checking Trump Org’s math in advance.

That’s every financial disclosure to a bank, to an insurer, or to a potential buyer of his properties. That’s the paperwork for his many branding and licensing deals, and even his corporate tax returns.

Jones will send any fugazi math back for corrections. Meanwhile, Trump must continue, under the verdict, to give Jones 30 days notice of any restructuring, refinancing, or selling of assets.

Otherwise, as Engoron noted in his verdict, Trump, his company, and his sons, Donald Trump, Jr., and Eric Trump, “are likely to continue their fraudulent ways.”

Knew he was being watched

The AG’s office believes Trump knew he was under investigation in March 2019. That’s when the AG served her very first fraud-probe subpoena, demanding records from Trump’s favorite lender, Deutsche Bank.

Two months later, Trump’s outside accountants, Mazars USA, got a subpoena. Cushman-Wakefield, Trump’s go-to assessor, got one a month later. Trump Org lawyers met with the AG’s office regarding these subpoenas throughout the summer of 2019.

Yet the following Halloween, the AG’s office has said, Trump still issued an intentionally inflated 2019 net worth statement, claiming he was worth $6.1 billion, well over twice his actual worth. The statement’s accuracy was certified by Donald Trump, Jr., and by then-Trump Org CFO Allen Weisselberg.

Trump was still president in 2019, and clearly otherwise occupied. But Trump continued frauding over the next four years, as a civilian, inflating his net worth in official banking documents even as the AG’s investigation pressed forward, the judge found.

In 2020, more AG subpoenas snowed down. The Trump Organization got one. So did the company’s leadership, from Trump on down to Patrick Birney, an assistant finance guy, trial evidence showed.

(Some fun 2020 deposition facts: responding to his subpoena, Birney memorably swore that Weisselberg, the Trump Org CFO, told him, “Donald likes to see it go up.” And Weisselberg and Eric Trump invoked the Fifth Amendment more than 500 times each in their subpoena-ordered depositions.)

Still, even as the AG’s microscope focused ever tighter, the 2020 financial statement issued at year’s end again more than doubled Trump’s net worth, saying it was $4.7 billion rather than $2.2 billion, as officials say it actually was.

In 2021, Trump kept at it, the AG argued, even as Mazars very publicly dropped Trump as a client. Even as Weisselberg and Trump Org were indicted on payroll-tax fraud charges that a jury would convict on a year later.

“While the investigation was ongoing, defendants continued their efforts to actively conceal their fraud,” state lawyers said in a filing last month.

That includes Trump “failing to turn over more than one million pages of documents” in defiance of an AG subpoena, and “refusing to sit for testimony absent court order.”

On October 29, 2021 — AG microscope be damned — Trump claimed that he was worth $4.5 billion, nearly $2 billion higher than his actual worth. And Eric Trump certified the claim as accurate.

“Defendants were aware of our investigation since the middle of March 2019,” Andrew Amer, a lawyer for James, said in closings.

But over the next three years, “they issued three more statements of financial condition with the fraud continuing, while they knew they were under investigation for this activity.”

Not his first fraud rodeo

It wasn’t even Trump’s first fraud rodeo, the AG’s lawyers have noted.

In previous years, Trump has settled allegations of fraud involving the Trump Foundation, Trump University, and the 2017 Inaugural Committee, Amer pointed out in closings.

None of these legal exposures slowed Trump down. Nor would the AG’s fraud lawsuit itself.

The very same day James concluded her initial investigation and filed her massive Trump fraud lawsuit, on September 21, 2022, Trump incorporated “Trump Organization II” in what her office worried was an attempt to shift and protect assets.

Engoron at this point had already been presiding for two years over the AG’s fraud investigation, repeatedly ordering Trump defendants to stop defying her subpoenas for their testimony and documents.

The judge quickly agreed with the AG’s request for an independent monitor to oversee the Trump Organization, citing Trump’s “demonstrated propensity to engage in persistent fraud.”

Violations all over the place

Since her appointment just over a year ago, Jones has repeatedly criticized Trump Org’s transparency and its sometimes suspect money transfers.

Last August, she cited the company’s “incomplete” data to lenders, accusing it of hiding in its reporting such liabilities as “refundable golf-club membership deposits.”

In November — this is mid-trial — Jones dinged the company for failing to immediately disclose $40 million in cash transfers, money she said Trump used to pay $29 million in taxes and a $5 million civil judgment in the first E. Jean Carroll defamation case.

“It shows an inability to follow the law,” AG lawyer Kevin Wallace said during last month’s closings.

And in January, Jones suggested that Trump hid an internal, Trump Organization money transfer that amounts to a $48 million, tax-free loan.

“Even after the Independent Monitor was in place, defendants were still incapable of complying with Court orders,” the AG’s lawyers wrote last month.

“In short,” they added, Trump and Trump Org leadership “have proven themselves incapable, time and again, of following the law.”

But no outright fraud

Any discrepancies or requests for additional data have been promptly cleared up, and no allegations of outright fraud were ever made by Jones, Trump’s lawyers have said in his defense.

“The monitor has issued five reports so far,” Trump attorney Christopher Kise said in the fraud trial’s closing arguments last month.

“The word fraud does not appear in any one of those reports,” Kise argued.

But Jones is not authorized to accuse Trump of fraud, as she points out in her reports to the judge. She’s just there to alert the court to anything suspicious. And there’s been plenty of that.

Trump “submitted disclosures to third parties that fail to include significant liabilities,” the verdict noted, referring to Jones’ findings.

Not only that, but “the internal accounting structure of the Trump Organization continues to be plagued by math and/or reporting errors,” the verdict noted.

“There are no adequate internal controls over financial reporting in place at the Trump Organization” Engoron found, “to ensure that there will not continue to be misstatements and errors going forward.”

Until now.

If Trump continues to fraud like nobody’s watching, Jones and a yet-designated “Independent Director of Compliance” who will reports to her, can propose even more drastic oversight and punishment — whatever it takes “to keep defendants honest.”

That includes, under the verdict, “the restructuring and potential dissolution” of Trump’s properties.

And all this monitoring? That team of skeptical accountants with their noses in his books for at least the next three years? Trump will pay their salaries, on top of his $355 million verdict-plus-interest.