Trump fraud trial live updates: Trump never risked defaulting on loan covenants, banker suggests

(NEW YORK) — Former President Donald Trump is on trial in New York in a $250 million civil lawsuit that could alter the personal fortune and real estate empire that helped propel Trump to the White House.

Trump, his sons Eric Trump and and Donald Trump Jr., and other top Trump Organization executives are accused by New York Attorney General Letitia James of engaging in a decade-long scheme in which they used “numerous acts of fraud and misrepresentation” to inflate Trump’s net worth in order get more favorable loan terms. The trial comes after the judge in the case ruled in a partial summary judgment that Trump had submitted “fraudulent valuations” for his assets, leaving the trial to determine additional actions and what penalty, if any, the defendants should receive.

The former president has denied all wrongdoing and his attorneys have argued that Trump’s alleged inflated valuations were a product of his business skill.

Here’s how the news is developing. All times Eastern:

Nov 28, 4:20 PM EST

For 3rd time, defense asks for directed verdict

Defense attorney Christopher Kise requested Judge Engoron issue a directed verdict at the conclusion of testimony from Deutsche Bank managing director Dave Williams — marking the third time the defense has asked the judge to stop the proceedings and decide the case in their favor.

“Was an event of default ever declared by Deutsche Bank on the loans to the Trump Organization?” defense attorney Jesus Suarez asked Williams at the end of Williams’ testimony.

“No,” Williams replied, prompting Kise to jump up and make his request.

“This witness has again testified the bank conducted its own due diligence” and was not defrauded by Trump’s statements of financial condition, Kise argued.

“This is a subjective exercise. There isn’t a right answer. There isn’t an ‘Ah-ha, you picked the wrong number,'” Kise said. “The bank is in a relationship whose job it is to make these determinations. It’s not the attorney general’s job to insert herself into a private transaction ten years later.”

Judge Engoron took the defense’s motion under advisement but signaled he was unmoved.

“The mere fact that the lenders were happy doesn’t mean the statute wasn’t violated,” Engoron said.

Kevin Wallace, an attorney for the state, took issue with the Kise’s analysis of the testimony.

“The witness did not say none of this matters. The witness said he expects clients to tell the truth,” Wallace said.

Nov 28, 2:19 PM EST

Trump easily met Deutsche Bank loan requirements, banker says

Deutsche Bank did its own due diligence to estimate Trump’s net worth, landing on a figure that differed from Trump’s reported net worth by over $2 billion — but the difference didn’t concern the bank, according to testimony from managing director Dave Williams.

Trump reported a net worth of nearly $5 billion in 2013, according to documents shown at trial. The bank’s own Valuation Services Group produced an estimate of only $2.6 billion, a difference that Williams described as “not unusual or atypical.”

“My reaction was probably pretty measured,” Williams said about learning that the bank determined that Trump’s net worth was nearly half the estimate provided by Trump. “We are expected to conduct due diligence and verify information to the extent that is possible.”

Even with Deutsche Bank’s lower estimate, the former president easily met the bank’s $100 million net-worth requirement for high-net-worth individuals, according to Williams.

“He reported both a net worth and investable assets well in excess of our minimum requirements,” Williams said, confirming that the bank set the interest rate for Trump’s commercial loans between 2%-2.5%.

The testimony also appeared to bolster Trump’s arguments that his lenders did their own due diligence, diminishing the importance of his statements of financial condition that are at the center of the case.

Nov 28, 12:16 PM EST

Trump never risked defaulting on loan covenants, banker suggests

Deutsche Bank managing director Dave Williams downplayed the possibility that Donald Trump could have defaulted on the net-worth covenants included in his loans.

While both parties agree that Trump never defaulted on his loans, New York Attorney General Letitia James alleges that had Trump accurately reported the value of his assets, he could have risked defaulting on a loan covenant that required he maintain a net worth of $2.5 billion.

Defense attorney Jesus Suarez pushed back on that allegation by asking Williams about the severity of a covenant default — i.e., breaching the terms of the loan — compared to a payment default triggered by a missed payment.

“Generally speaking, a payment default is a more material default than a covenant default,” Williams said. “It speaks definitively to the repayment of the loan.”

Williams described a loan covenant as a “guardrail,” and suggested that breaching the covenant would have brought Trump back to the negotiating table to adjust the loan terms.

Williams also reiterated that he was not aware of any loan or covenant defaults by Trump.

James is expected to request a fine of nearly $400 million for Trump’s allegedly ill-gotten gains, including over $140 million based on the potential interest she says was lost by Deutsche Bank. By proving that the loan agreements were lawful, Trump’s lawyers could significantly lower the fine Trump faces.

Nov 28, 11:44 AM EST

Net worth is subjective, banker says

The managing director of Deutsche Bank, which was Trump’s primary lender in the 2010s, testified that it would be impossible for the bank to calculate their client’s net worth with mathematical certainty.

“I don’t believe that is possible,” said Dave Williams, testifying for the defense. “I think an individual’s net worth as reported is largely subjective, or subject to the use of estimates.”

The assertion bolsters a recurring theme of the defense’s case — that determining the value of Trump’s assets was less of a science than an art form.

Williams said that, regardless of what Trump reported, Deutsche Bank made more conservative estimates about the value of his assets.

“I think it’s a difference of opinion. We expect clients provide information to be accurate. At the same time, it’s not an industry standard that these financial statements are audited,” Williams said.

Nov 28, 9:24 AM EST

Deutsche Bank executives to testify for defense

A day after Trump lawyer Chris Kise asserted that the only person who believes the former president committed fraud in his business transactions is New York Attorney General Letitia James, that claim will face a key test over the next two days as Trump’s lawyers call four executives from Deutsche Bank, Trump’s primary lender at the time of the alleged conduct.

Trump’s lawyers claim that the executives will prove that the bank would have still done business with Trump despite his inflated claims about his assets.

“They’re skipping over the part where they have to establish that the gains are ill-gotten, meaning that the loans would not have been issued in the first place or that the terms would have been different,” Kise said in November during an argument for a directed verdict.

James, however, says that the banks lost millions in potential interest based on Trump’s inflated valuations.

Nov 27, 6:52 PM EST

Trump Organization VP returns to witness stand

Trump Organization Vice President Patrick Birney returned to the witness stand to describe his role preparing Trump’s statement of financial condition between 2016 and 2021.

“Every new year, I would just copy and paste the spreadsheet from the year before,” Birney said, testifying this time for the defense.

Birney largely testified about the spreadsheets of supporting data he prepared, as well as the supporting data he cited from year to year.

Court was adjourned for the day following Birney’s testimony. He is set to return to the witness stand later this week after the court hears from witnesses from Deutsche Bank.

Nov 27, 5:59 PM EST

Trump exec disputes independent monitor’s findings

Trump Hotels chief operating officer Mark Hawthorn disputed an August 2023 report from the Trump Organization’s independent monitor that said the company continued to provide incomplete information to lenders.

Hawthorn had earlier testified that the monitor never communicated that they “uncovered fraud or any irregularities.”

State attorney Andrew Amer confronted Hawthorn with the letter from the Trump Organization’s independent monitor Barbara Jones flagging inconsistencies.

“Were you aware that Judge Jones had identified such inconsistencies?” Amer asked.

“Yes,” Hawthorn answered — but said that he stood by his initial statement that the monitor never uncovered fraud, claiming that the flagged issues were consistent with accounting practices.

“Did the monitor accuse the Trump Organization of disseminating false and misleading information?” defense attorney Clifford Robert asked on redirect examination.

“No,” Hawthorne said.

Trump defense attorney Chris Kise used the disagreement about the monitor’s findings to renew his request to question Jones, which Judge Engoron denied earlier in the afternoon.

“What the monitor thinks is clearly and squarely at issue,” Kise said, describing the Trump Organization’s issues as “minor accounting discrepancies which happen in a large corporation all the time.”

“Every time you talk, there’s a campaign speech,” Engoron quipped following Kise’s lengthy argument.

Engoron ultimately stood by his initial ruling, but said he would allow Kise to present cases, if they exist, supporting the defense’s right to call the monitor.

“I will decide what reports mean and what implications there are,” Engoron said about the monitor’s findings.

Nov 27, 3:44 PM EST

Donald Trump to return to witness stand in December

Defense lawyers plan to call Donald Trump as their final witnesses in the former president’s civil fraud trial.

Asked to confirm the final witnesses for the defense’s case, defense attorney Chris Kise said that Trump is likely to testify on Dec. 11.

“I think we can make that work,” Kise said, adding that Trump’s exact schedule might change.

Eric Trump will also return to the witness stand on Dec. 6, according to Kise.

Those dates might change if Judge Engoron limits testimony from any of the remaining witnesses.

State attorney Kevin Wallace said that the New York attorney general may present a “minimal” rebuttal case.

Nov 27, 2:43 PM EST

Judge blocks testimony from independent monitor

Judge Arthur Engoron blocked the defense team’s plan to call the Trump Organization’s independent monitor, describing the last-minute change to the defense’s witness list as “untimely” and “inappropriate.”

The judge’s ruling came after defense lawyer Clifford Robert announced the plan to call former federal Judge Barbara Jones and her associate to testify for the defense.

Before Engoron issuing his ruling from the bench, attorneys from both sides appeared to privately meet with the judge in his chambers.

“I hereby preclude their testimony,” Engoron said from the bench, regarding Jones and her associate.

Engoron said that he determined that Jones and her staff are effectively “arms of the court” and thus cannot be called to testify.

He also expressed concern that Jones’ testimony could create conflicts of interest that force her to step away from her role overseeing the Trump Organization’s finances.

Nov 27, 2:27 PM EST

Defense plans to call Trump Organization’s independent monitor

Donald Trump’s lawyers plan to call former federal Judge Barbara Jones — who has served as the Trump Organization’s independent monitor since 2022 — as a witness for the defense case, according to defense attorney Clifford Robert.

Jones was installed as the firm’s independent monitor last November at the request of New York Attorney General Letitia James.

Though Jones was not originally included in the defense’s witness list, Robert flagged the change to the court near the end of the direct examination of Trump Hotels chief operating officer Mark Hawthorn.

Hawthorn testified that he has regularly met with Jones since her appointment, and that the two have a transparent and cooperative relationship.

“We believe everything they deemed as an objection we have responded to diligently and very accurately,” Hawthorn said. “No one from that team has ever communicated to us that they have uncovered fraud or any irregularities.”

Jones, however, wrote in an August 2023 report that the Trump Organization provided “incomplete” information and did not consistently provide necessary certifications to lenders, prompting Judge Engoron to chastise the defendants in his summary judgment order.

“Even with a preliminary injunction in place, and with an independent monitor overseeing their compliance, defendants have continued to disseminate false and misleading information while conducting business,” Engoron wrote.

Robert did not provide a timeline for when Jones might testify, and state attorney Andrew Amer reserved a right to object to the defense team calling Jones as a witness.

Nov 27, 1:53 PM EST

Threats against clerk are ‘just part of the game,’ said Trump lawyer

In their filing this morning arguing against the trial’s limited gag order, Trump attorneys Clifford Robert, Chris Kise, and Alina Habba downplayed Trump’s connection to the threats against Judge Engoron and his clerk, and argued that they do not justify the gag order’s limit on Trump’s constitutional right to free speech.

The arguments appeared to be foreshadowed by remarks made to reporters earlier this month by Habba, who has been a forceful voice for the former president both in and out of court.

“The president has never threatened her safety,” Habba said of Engoron’s clerk. “This is a high profile case, and unfortunately, this is what comes with it. There is not a day that I don’t get a threat. It’s just part of the game.”

“If she had a real threat, she should get off the bench and stop having her photograph taken, but she hasn’t done that,” Habba added.

Nov 27, 12:54 PM EST

Trump’s lawyers disavow threats against judge, clerk

Donald Trump’s lawyers, in a court filing this morning, doubled down on their criticism of the trial’s limited gag order while distancing Trump and his co-defendants from what they called the “vile and reprehensible” threats against Judge Arthur Engoron and his principal law clerk.

In a filing arguing against the limited gag order, defense lawyer Clifford Robert said that the attacks — which he said Trump neither condoned nor directed — do not justify the gag order’s unconstitutional restraint on Trump’s free speech.

“Respondents’ sole cognizable justification for the Gag Orders is that an unknown third party may react in a hostile or offensive manner to Petitioners’ speech,” Robert wrote.

While Robert characterized the threats as “disturbing, derogatory, and indefensible,” he argued that it could not be proven that Trump’s Truth Social post on Oct. 3 — which prompted the limited gag order prohibiting statements about the judge’s staff — led to an increase in threats. Trump and his lawyers have never called for violence, condoned the attacks, or encouraged threatening behavior, Robert said.

The threatening behavior “merits appropriate security measures,” Robert wrote. “However, it does not justify the wholesale abrogation of Petitioners’ First Amendment rights in a proceeding of immense stakes to Petitioners,” which Robert argued has been “compromised by the introduction of partisan bias on the bench.”

Nov 27, 11:58 AM EST

Eric Trump asked hotel exec to revamp firm’s outdated bookkeeping

Eric Trump needed help with the Trump Organization’s finances after the company’s chief financial officer Allen Weisselberg was removed from his role following his indictment in 2021, according to Trump Hotels executive Mark Hawthorn.

According to Hawthorn’s testimony, the company relied on an outdated and inefficient approach to bookkeeping, including authorizing only three individuals — Weisselberg, Donald Trump Jr. and Eric Trump — to write checks for the Trump Organization until as late as 2021.

Weisselberg signed most of the company’s disbursements, leaving Eric and Don Jr. in uncharted waters once Weisselberg was removed, Hawthorn said.

“He had a stack of checks [on his desk] to sign that was very high,” Hawthorn recalled regarding a summer 2021 meeting during which he said Eric Trump requested Hawthorn’s help applying his experience running Trump’s hotel division.

“Mark, how do you do this in the hotel division?” Eric asked, according to Hawthorn.

“We don’t do it like this,” Hawthorn said he replied.

The meeting, according to Hawthorn, prompted him to begin an effort to revise the Trump’s Organization’s bookkeeping policies to replicate his work in Trump’s hotel division, which he ran as its chief operating officer. Following Eric Trump’s request, he imposed a standardized paperless approach to bookkeeping, so entities could be compared on an “apples to apples basis,” Hawthorn testified.

Nov 27, 9:26 AM EST

Trump Organization execs to return to witness stand

Two current Trump Organization executives are scheduled to return to the witness stand today as part of the defense’s case as the trial resumes following the Thanksgiving holiday.

Mark Hawthorn, Trump Hotels’ chief financial officer, initially testified for the state’s case in October. State attorney Andrew Amer used his testimony as an opportunity to highlight that the Trump Organization had a qualified accountant who could have worked on Trump’s statement of financial condition, instead of the top executives who had less accounting experience.

“If any of them had asked you to work with them on preparing Mr. Trump’s statement of financial condition, would you have had the knowledge and experience to do so?” Amer asked.

“Yes,” Hawthorn responded, adding he was never asked to assist with preparing the statements that are at the center of the attorney general’s case.

Patrick Birney, an assistant vice president at the Trump Organization who also testified in October, offered some of the only testimony that supports the attorney general’s allegation of a conspiracy to inflate Trump’s net worth.

“Did Allen Weisselberg ever tell you that Mr. Trump wanted his net worth on the statement of financial condition to go up?” state attorney Eric Haren asked Birney.

“Yes, I think that happened in Allen Weisselberg’s office,” Birney said, prompting an objection from Trump’s lawyers.

Nov 22, 5:28 PM EST

Judge, clerk subjected to daily threats, official says in gag order filing

An attorney for Judge Arthur Engoron also filed in support of the gag order in Donald Trump’s civil fraud trial, arguing that violent threats have increased since the gag order was lifted.

The limited gag order, which prohibited Donald Trump and his attorneys from publicly commenting about Engoron’s staff, was issued by the judge last month after Trump posted about the judge’s law clerk on social media. Judge David Friedman of the appellate division’s First Department stayed the order on Thursday, citing constitutional concerns over Trump’s free speech rights.

Engoron’s filing includes a report from Charles Hollon of the Judicial Threats Assessment Unit of the New York State Court System’s Department of Public Safety. According to the report, Engoron and his principal law clerk, Allison Greenfield, have been inundated with credible, violent and antisemitic threats since Trump began criticizing Greenfield.

“The threats against Justice Engoron and Ms. Greenfield are considered to be serious and credible and not hypothetical or speculative,” Hollon wrote in the report.

Greenfield has been the victim of daily doxing of her personal email address and phone number, receiving dozens of calls, emails and social media messages daily, according to Hollon. Approximately half the harassing messages have been antisemitic, according to Greenfield.

In the report, Hollon wrote that Engoron was the subject of credible threats before the trial had started, but Trump’s Oct. 3 Truth Social post directed at Greenfield exponentially increased the number of threats directed at her.

The report included multiple examples of voicemails that were left on the telephone in Engoron’s chambers.

Hollon said the messages have created an “ongoing security risk” for Engoron, his staff and family, but that the gag order had been effective in lowering the number of threats.

“The implementation of the limited gag orders resulted in a decrease in the number of threats, harassment and disparaging messages that the judge and his staff received,” Hollon said in the report. “However, when Mr. Trump violated the gag orders, the number of threatening, harassing and disparaging messages increased.”

Engoron’s lawyer, Lisa Evans, said the threats detailed in Hollon’s affirmation justify the gag order, which functions as a reasonable limit on free speech.

“The First Amendment does not prohibit courts from limiting speech that threatens the safety of the court’s staff,” Evans wrote.

Trump’s reply to the filing is due on Nov. 27, after which the First Department will decide whether to fully lift the gag order.

Nov 22, 4:53 PM EST

NY AG argues for limited gag order in court filing

A lawyer for New York Attorney General Letitia James, in a court filing Wednesday, argued in favor of maintaining the judge’s limited gag after an appeals court temporarily lifted the order last week.

The limited gag order, which prohibited Donald Trump and his attorneys from publicly commenting about Judge Arthur Engoron’s staff, was issued by the judge last month after Trump posted about the judge’s law clerk on social media. Judge David Friedman of the appellate division’s First Department stayed the order on Thursday, citing constitutional concerns over Trump’s free speech rights.

James’ court filing Wednesday alleges that Trump and his lawyers continue to harass Engoron’s law clerk “as part of an improper tactic to disrupt trial and undermine the proceedings.”

James said the gag order is a necessary and “exceedingly limited restraint” to protect Engoron’s staff, and Trump’s lawyers failed to prove that attacks on judicial staff during a trial are protected by the First Amendment.

“A speedy denial is necessary to ensure the safety of [the] Supreme Court’s staff and the integrity and the orderly administration of the proceedings through the end of the trial,” James wrote, describing Trump’s attacks as “extraordinary and dangerous.”

Arguing that Trump has engaged in a “pattern” of attacking civil servants involved in proceedings against him, James cited his attacks on the former lieutenant governor of Georgia, as well as officials in his federal election interference case. She also mentioned Trump’s renewed attacks against the clerk over the last week since the gag order was lifted, including calling for her prosecution, sharing an article suggesting she engaged in drug use, and describing her as “crooked and highly partisan.”

Trump’s lawyers have defended such attacks as constitutionally protected speech and argued that Engoron failed to articulate how the attacks present a “clear and present danger” to the clerk.

Trump personally sued Engoron last week using a provision of state law called Article 78, which is generally used to challenge New York government agencies. Trump unsuccessfully attempted to use an Article 78 proceeding on the eve of the trial to delay the proceeding; however, his most recent attempt successfully resulted in a temporary stay of the gag order.

Trump’s reply to the filing is due on Nov. 27, after which the First Department will decide whether to fully lift the gag order.

Nov 21, 3:27 PM EST

Court adjourns for extended Thanksgiving break

After two days of testimony for the defense, former Trump Organization controller Jeff McConney stepped off the witness stand.

Judge Arthur Engoron then adjourned court until Monday.

When court resumes after the Thanksgiving break, the defense plans to call two Trump Organization executives, followed by several Deutsche Bank employees.