Former President Donald Trump came face to face with New York Attorney General Letitia James again Tuesday as he returned to a Manhattan courtroom for the second day of his trial on civil charges alleging he and his company falsified business and personal records for financial gain.
Judge Arthur Engoron has already ruled against Trump and the other co-defendants on one of the charges, finding before the trial that they engaged in business fraud. The trial is focused on the remaining charges in the suit, related to alleged falsification of business records, issuing false financial statements and conspiracy.
Trump, the Trump Organization, several executives and two of his children — Donald Jr. and Eric — are the defendants in the civil trial in New York Superior Court. They will not face any jail time if found liable, since the charges are civil in nature, not criminal.
Trump voluntarily appeared for the first day of the trial on Monday, where a packed crowd gathered to observe the proceedings. Outside the courtroom, he harshly criticized James and Engoron over the case, which he called a “witch hunt” and a “disgrace.”
He returned to the large courtroom on Tuesday, where a noticeably smaller crowd of onlookers occupied just over half of the available seats.
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What happened on the first day of the trial
The trial kicked off Monday with opening statements from both sides and the appearance of the state’s first witness.
Kevin Wallace, the lead attorney for James’ office, delivered a 65-slide presentation outlining the remaining allegations in the case, which center on the preparation of allegedly false business records and personal financial statements over a number of years. The state alleges Trump and the company fraudulently crafted the documents in order to inflate the worth of the Trump Organization’s assets and the former president’s own wealth in order to obtain more favorable loan terms.
“The defendants knew that the statements were false, they then used them to pursue and obtain financial benefits,” Wallace said.
Attorneys for the defendants countered with their own opening statements, with Trump lawyer Christopher Kise saying the valuations were appropriate and accurate. He said Trump’s personal financial statements used a different accounting standard than the company’s statements, and said the defense would call witnesses who can attest to their soundness.
Wallace and his team called accountant Donald Bender from the accounting firm Mazars, which oversaw Trump and the company’s books for more than 30 years, as their first witness. He described the process by which he compiled financial statements based on information provided by the Trump Organization. He said he departed from generally accepted accounting principles, known as GAAP, for some of the Trump Organization’s business entities at the direction of the company. Bender testified that he would not have signed off on these statements if he had known that the information provided by the company was not true.
Day 2 of the Trump trial
Bender was back on the stand on Tuesday, resuming his year-by-year explanation of the financial records at issue in the case.
Kise, the Trump attorney, objected to many of the documents shown, arguing the relevant statute of limitations prohibited evidence from before either 2014 or 2016, depending on the document. Engoron overruled those objections, having found on Monday that material prior to 2014 is admissible. Wallace told the judge the state intends to tie the earlier documents to loans that matured at a later date within the statute of limitations.
Bender said Mazars would not have issued a statement of financial condition — or SOFC, essentially a snapshot of Trump’s personal finances — if the firm believed the material was untrue. In 2022, Mazars declined to issue an SOFC for the prior year, dropped Trump as a client and recanted a decade of SOFCs.
Beginning in 2013, Bender said he asked the Trump Organization to provide any available property appraisals when he was preparing SOFCs. He said he learned about three years ago that there were appraisals he did not receive, adding that he found out during a Zoom interview with the Manhattan District Attorney’s Office.
That office later charged two Trump Organization companies and former Chief Financial Officer Allen Weisselberg with tax fraud. Weisselberg entered a guilty plea and the companies were found guilty in December 2022 on 17 related counts.
Four months later, a Manhattan grand jury indicted Trump with 34 felony counts of falsification of business records. He entered a not guilty plea in the case.
