# People v. Trump > New York Supreme Court, New York County · February 16, 2024 · 2024 NY Slip Op 30493(U) URL: https://www.frixlaw.com/law-library/cases/9942359 ## Case - **Court:** New York Supreme Court, New York County - **Decided:** February 16, 2024 - **Citations:** 2024 NY Slip Op 30493(U) - **Precedential status:** Unpublished - **Opinion:** Opinion - **Cited by:** 1 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9942359 ## Opinion text People v Trump 2024 NY Slip Op 30493(U) February 16, 2024 Supreme Court, New York County Docket Number: Index No. 452564/2022 Judge: Arthur F. Engoron Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 $$$$ SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. ARTHUR F. ENGORON PART 37 Justice ------------------------------------------------------------------------------------ X PEOPLE OF THE STATE OF NEW YORK, BY LETITIA INDEX NO. 452564/2022 JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK, Plaintiff, -v- Decision and Order DONALD J. TRUMP, DONALD TRUMP JR., ERIC TRUMP, After Non-Jury Trial ALLEN WEISSELBERG, JEFFREY MCCONNEY, THE DONALD J. TRUMP REVOCABLE TRUST, THE TRUMP ORGANIZATION, INC., TRUMP ORGANIZATION LLC, DJT HOLDINGS LLC, DJT HOLDINGS MANAGING MEMBER, TRUMP ENDEAVOR 12 LLC, 401 NORTH WABASH VENTURE LLC, TRUMP OLD POST OFFICE LLC, 40 WALL STREET LLC, SEVEN SPRINGS LLC, Defendants. ------------------------------------------------------------------------------------ X Arthur F. Engoron, Justice After presiding over a non-jury trial that began on October 2, 2023, and ended on December 13, 2023, with closing arguments on January 11, 2024, this Court makes the following findings of fact and conclusions of law and issues this Decision and Order: SUMMARY Donald Trump and entities he controls own many valuable properties, including office buildings, hotels, and golf courses. Acquiring and developing such properties required huge amounts of cash. Accordingly, the entities borrowed from banks and other lenders. The lenders required personal guarantees from Donald Trump, which were based on statements of financial condition compiled by accountants that Donald Trump engaged. The accountants created these “compilations” based on data submitted by the Trump entities. In order to borrow more and at lower rates, defendants submitted blatantly false financial data to the accountants, resulting in fraudulent financial statements. When confronted at trial with the statements, defendants’ fact and expert witnesses simply denied reality, and defendants failed to accept responsibility or to impose internal controls to prevent future recurrences. As detailed herein, this Court now finds defendants liable, continues the appointment of an Independent Monitor, orders the installation of an Independent Director of Compliance, and limits defendants’ right to conduct business in New York for a few years. 1 of 92 Page 1 of 92 [* 1] FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 INTRODUCTION In this civil action, plaintiff, the People of the State of New York, by Letitia James, Attorney General of the State of New York, seeks monetary penalties and injunctive relief against Donald John Trump (“Donald Trump”) (the former president of the United States); Donald Trump, Jr. (“Donald Trump, Jr.” or “Trump, Jr.”) and Eric Trump (two of his sons); Allen Weisselberg and Jeffrey McConney (two former employees of defendant The Trump Organization, Inc.); and various real estate holding entities. Plaintiff essentially alleges (1) that the individual defendants violated New York Executive Law § 63(12) by submitting false financial statements to banks and insurance companies to obtain better rates on loans and insurance coverage; and (2) that the holding entities are liable for the individual defendants’ misdeeds. Defendants (1) allege that the statements were completely or substantially correct; and (2) crow that the borrowers paid back all loans fully and on time. Common Law Fraud The instant action is not a garden-variety common law fraud case. Common law fraud (also known as “misrepresentation”) has five elements: (1) A material statement; (2) falsity; (3) knowledge of the falsity (“scienter”); (4) justifiable reliance; and (5) damages. See, e.g., Kerusa Co. LLC v W10Z/515 Real Estate Ltd. Partnership, 12 NY3d 236, 242 (2009) (“[T]he elements of common law fraud” are “a false representation . . . in relation to a material fact; scienter; reliance; and injury.”). Alleging the elements is easy; proving them is difficult. Is the statement one of fact or opinion? Material according to what standard? Knowledge demonstrated how? Justifiable subjectively or objectively? In mid-twentieth century New York, to judge by contemporary press reports and judicial opinions, fraudsters were having a field day. Executive Law Section 63(12) Along came Executive Law § 63(12), which began life as Laws of 1956, Chapter 592, “An act to amend the executive law, in relation to cancellation of registration of doing business under an assumed name or as partners for repeated fraudulent or illegal acts.” Jacob Javits, then the Attorney General of the State of New York (the position that Attorney General James now occupies), pushed for the bill, as did the Better Business Bureau of New York City. See Senate Bill Jacket, February 21, 1956. State Comptroller Arthur Levitt asked, “Why not grant the Attorney General authority to enjoin anyone from continuing in a business activity if such person has been guilty of frequent fraudulent dealings.” The preponderance of the evidence standard, the one used in almost all civil cases would apply. Comptroller Levitt noted: “In a suit for an injunction, there is no need to prove the charge beyond a reasonable doubt, as in a criminal case—a mere preponderance of evidence would be sufficient.” Id. In the subsequent six decades, the State has toughened the statute. In Laws of 1965, Chapter 666, the definitions of the words “fraud” and “fraudulent” were expanded to include “any device, scheme or artifice to defraud and any deception, misrepresentation, concealment, false pretence [sic], false promise or unconscionable contractual provisions.” The statute casts a wide net. 2 of 92 Page 2 of 92 [* 2] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 “The general grant of power to the Attorney General under section 63(12) has traditionally been his most potent.” 3 Fordham Urb. L. J. 491, 502 (1975). Executive Law § 63(12) now reads as follows: Whenever any person shall engage in repeated fraudulent or illegal acts or otherwise demonstrate persistent fraud or illegality in the carrying on, conducting or transaction of business, the attorney general may apply… for an order enjoining the continuance of such business activity or of any fraudulent or illegal acts, directing restitution and damages and, in an appropriate case, cancelling any certificate filed under and by virtue of the provisions of section four hundred forty of the former penal law or section one hundred thirty of the general business law, and the court may award the relief applied for or so much thereof as it may deem proper. The word “fraud” or “fraudulent” as used herein shall include any device, scheme or artifice to defraud and any deception, misrepresentation, concealment, suppression, false pretense, false promise or unconscionable contractual provisions. The term “persistent fraud” or “illegality” as used herein shall include continuance or carrying on of any fraudulent or illegal act or conduct. The term “repeated” as used herein shall include repetition of any separate and distinct fraudulent or illegal act, or conduct which affects more than one person. Notwithstanding any law to the contrary, all monies recovered or obtained under this subdivision by a state agency or state official or employee acting in their official capacity shall be subject to subdivision eleven of section four of the state finance law. The Financial Marketplace This Court takes judicial notice that New York State, particularly New York City, is the financial capital of the country and one of the financial capitals of the world. The City’s fabled Wall Street is synonymous with capital formation, investing, trading, lending, and borrowing. In a summary judgment Decision and Order dated September 26, 2023, NYSCEF Doc. 1531, the Court addressed the State’s judicially recognized interest in an honest marketplace: “In varying contexts, courts have held that a state has a quasi- sovereign interest in protecting the integrity of the marketplace.” People v Grasso, 11 NY3d 64, 69 at n 4 (2008); People v Coventry First LLC, 52 AD3d 345, 346 (1st Dept 2008) (“the claim pursuant to Executive Law § 63(12) constituted proper exercises of the State’s regulation of businesses within its borders in the interest of securing an honest marketplace”); People v Amazon.com, Inc., 550 F Supp 3d 122, 130-131 (SDNY 2021) (“[T]he State’s statutory interest under § 63(12) encompasses the prevention of either ‘fraudulent or illegal’ business activities. Misconduct that is illegal 3 of 92 Page 3 of 92 [* 3] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 for reasons other than fraud still implicates the government’s interests in guaranteeing a marketplace that adheres to standards of fairness …”). Timely and total repayment of loans does not extinguish the harm that false statements inflict on the marketplace. Indeed, the common excuse that “everybody does it” is all the more reason to strive for honesty and transparency and to be vigilant in enforcing the rules. Here, despite the false financial statements, it is undisputed that defendants have made all required payments on time; the next group of lenders to receive bogus statements might not be so lucky. New York means business in combating business fraud. Procedural Background This action follows an extensive investigation conducted by plaintiff, the Office of the Attorney General of the State of New York (“OAG”). In 2020, OAG commenced a special proceeding to enforce a series of subpoenas against various named defendants and other persons and entities. This Court presided over that proceeding and issued several orders compelling, in part, compliance with OAG’s subpoenas. See People v The Trump Org., Sup Ct, NY County, Index No. 541685/2020. OAG filed the instant complaint on September 21, 2022. On November 3, 2022, in response to a motion by OAG, this Court found preliminarily that defendants had a propensity to engage in persistent fraud by submitting false and misleading Statements of Financial Condition (“SFCs”) on behalf of Donald Trump. NYSCEF Doc. No. 183. Accordingly, the Court granted a preliminary injunction against any further fraud and appointed the Hon. Barbara S. Jones (ret.) as an independent monitor to oversee defendants’ financial statements and significant asset transfers. NYSCEF Doc. Nos. 193 and 194. To date, Judge Jones has delivered six reports to this Court, dated December 19, 2022, February 3, 2023, April 11, 2023, August 2, 2023, November 29, 2023, and January 26, 2024. NYSCEF Doc. Nos. 441, 489, 617, 647, 1641, 1681. Defendants moved to dismiss the complaint. In a Decision and Order dated January 6, 2023, this Court denied the motion. NYSCEF Doc. No. 453. Defendants appealed, resulting in a June 27, 2023 Order, wherein the Appellate Division, First Department modified this Court’s order to the extent of: (1) declaring that in this case the “continuing wrong doctrine does not delay or extend [the statute of limitations]”;1 (2) finding that claims are timely against defendants subject to a tolling agreement2 if they accrued after July 13, 2014, and timely against defendants not subject to the tolling agreement if they accrued after February 6, 2016; and (3) dismissing the complaint 1 As this Court explained ad nauseum at trial, statutes of limitation bar claims, not evidence. 2 The Trump Organization’s Chief Legal Officer, Alan Garten, originally entered into a tolling agreement on behalf of “the Trump Organization” on August 27, 2021; the agreement was extended one time by an amendment dated May 3, 2022. NYSCEF Doc. No. 1260. It tolls the statute of limitations for the period from November 5, 2020, through May 31, 2022. Id. at 2. This Court previously found, pursuant to the terms of the agreement, that it binds “all directors [and] officers” and “present or former parents” of the Trump Organization and its affiliates and subsidiaries. 4 of 92 Page 4 of 92 [* 4] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 as against defendant Ivanka Trump on statute of limitations grounds, finding that she was not bound by the tolling agreement, as she was not an employee of the Trump Organization at the time Garten entered into the agreement. People v Trump, 217 AD3d 609 (1st Dept 2023). The Complaint The Complaint asserts seven causes of action. The first cause of action is of a type known as a “stand-alone § 63(12) claim.” Consistent with the wording of the statute, plaintiff need only prove that defendants used false statements in business. The second through seventh causes of action require plaintiff to prove that defendants intended to violate a provision of the Penal Law. The second cause of action, pursuant to New York Penal Law § 175.10, requires plaintiff to prove that defendants intended to falsify business records. The third cause of action requires plaintiff to prove that defendants intended to conspire to falsify business records. The fourth cause of action, pursuant to New York Penal Law § 175.45, requires plaintiff to prove that defendants intended to issue a false financial statement. The fifth cause of action requires plaintiff to prove that defendants intended to conspire to issue a false financial statement. The sixth cause of action, pursuant to New York Penal Law § 176.05, requires plaintiff to prove that defendants intended to engage in insurance fraud. The seventh cause of action requires plaintiff to prove that defendants intended to conspire to engage in insurance fraud. Summary Judgment In a 35-page Decision and Order, dated September 26, 2023, this Court granted plaintiff summary judgment only on liability and only on the first cause of action. Simply put, the Court found that plaintiff had capacity and standing to sue; that non-party disclaimers and party “worthless clauses” do not insulate defendants’ material misrepresentations; that intent, scienter, and reliance are not elements of a stand-alone § 63(12) claim; that disgorgement of profits is an available remedy; and that the subject financial statements materially misrepresented the value of the Trump Tower Triplex, The Seven Springs Estate, certain apartments in Trump Park Avenue, 40 Wall Street, Mar-a-Lago, and a golf course in Aberdeen, Scotland. NYSCEF Doc. 1531. This Court also held that the tolling agreement the parties entered into bound all defendants, such that the applicable statute of limitations allowed claims accruing on or after July 13, 2014. This Court also ordered the cancellation of defendants’ business certificates filed under and by virtue of GBL § 130. The Appellate Division stayed the cancellation of the certificates pending the final disposition of defendants’ appeal of the summary judgment rulings. The Trial The eleven-week trial of this action addressed whether defendants are liable pursuant to the second through seventh causes of action and what monetary penalties and/or injunctive relief this 5 of 92 Page 5 of 92 [* 5] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 Court should impose. Plaintiff is seeking “disgorgement” of “ill-gotten gains,” and to limit defendants’ abilities to conduct business in New York. Constitutional provisions guaranteeing a jury trial, such as the Seventh Amendment to the United States Constitution, apply only to cases “at common law,” so-called “legal” cases. The phrase “at common law” is used in contradistinction to cases that are “equitable” in nature. Whether a case is “legal” or “equitable” depends on the relief that plaintiff sought. Here, plaintiff seeks disgorgement and injunctions, each of which are forms of equitable relief. Thus, there was no right to a jury,3 and the case was “tried to the Court;” the Court being the sole factfinder and the sole “judge of credibility.” This Court listened carefully to every witness, every question, every answer. Witnesses testified from the witness stand, approximately a yard from the Court, who was thus able to observe expressions, demeanor, and body language. The Court has also considered the simple touchstones of self-interest and other motives, common sense, and overall veracity. 3 In any event, neither party applied nor moved for a jury trial. 6 of 92 Page 6 of 92 [* 6] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 FINDINGS OF FACT This Court heard testimony from 40 witnesses over 43 days4 and makes the following findings of fact: The Non-Party Witnesses Donald Bender Donald Bender is an accountant who worked for Mazars USA LLP (“Mazars”), an accounting firm, for approximately 41 years. From approximately 2011-2021, Bender spent approximately half of his time working on engagements for Donald Trump and the Trump Organization, and between 2-4% of his time working on Donald Trump’s SFCs. Trial Transcript (“TT”) 106-107. Donald Trump engaged Mazars to create SFC “compilations,” comprised of accounting data that defendants sent to Mazars; Mazars simply “compiled” that data into SFC format. “Audits” are the highest level of review of accounting data; “reviews” subject the data to medium-level scrutiny; “compilations” require the least scrutiny of the data. The accountant does not test or audit the raw numbers and thus cannot, and does not, assure the accuracy of the statement. TT 113. Mazars compiled Donald Trump’s SFCs from 2011 through 2020. Bender received all his information for the compilations from Jeffrey McConney or a member of his team, such as Patrick Birney. TT 114-116, 221-222, 387. Mazars would not have issued the SFCs if Allen Weisselberg had not represented that the information in the SFCs was in conformity with Generally Accepted Accounting Principles (“GAAP”) or if Mazars had learned that any of the representations in the letter were not true. TT 199, 254-255, 263-269. Bender made absolutely clear that under the terms of the engagement for compilation services, the client was responsible for ensuring that assets were stated at their “estimated current values,” and that Weisselberg was responsible for determining which GAAP departures were identified and disclosed. TT 237-238, 319-320. The engagement letters, signed by a combination of Weisselberg, Donald Trump, and Donald Trump, Jr., confirmed this by unambiguously acknowledging that Donald Trump, through his trustees, was responsible for the preparation and fair presentation of the personal financial information in accordance with GAAP. See, e.g., PX 741. Bender later learned that the Trump Organization had withheld records, such as appraisals, that Mazars had requested while preparing the compilations, leading Mazars to conclude that the Trump Organization had falsely represented that it had complied fully and truthfully with all inquiries from Mazars. Mazars subsequently terminated its relationship with the Trump Organization. TT 242-243; PX 2992, 2994. Bender stated that it was not until he was interviewed by the Manhattan District Attorney’s Office, in spring 2021, that he learned that the Trump Organization had withheld appraisals from Mazars. TT 536-538. Bender made clear that 4 Indeed, the trial transcript spans 6,758 pages, excluding closing arguments. 7 of 92 Page 7 of 92 [* 7] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 Mazars would not have issued the SFCs if it had known that it had not been provided with all appraisals. TT 251. Camron Harris Camron Harris is an audit partner at Whitley Penn, an accounting firm that compiled Donald Trump’s SFC for 2021. TT 442. His testimony buttressed Donald Bender’s that compilers simply use the numbers provided by the client; they do not check them. TT 447-448; PX-1497. Harris’s contemporaneous notes, taken during or shortly after a meeting with Jeffrey McConney and Mark Hawthorn of the Trump Organization, state: Patrick [Birney] explained that he is the primary preparer of the valuations. Patrick obtained all of the necessary information for the valuations from external and internal sources. He worked with other team members to pull this information together, such as Ray Flores. Ray Flores performs the first review of Patrick’s spreadsheet and financial statements. Prior to issuance of the SOFC, an individual from upper management of the Trump Organization, and also one of the Trump family members, will read and review the financial statements. TT 450-451. Harris also indicated that the Trump Organization designated McConney as the “individual with suitable skills, knowledge and experience to oversee [Whitley Penn’s] preparation of your financial statements,” as the Whitley Penn compilation engagement agreement required. TT 459-464; PX-2300. Harris stressed the “fundamental” importance of the client’s obligations, particularly during a compilation engagement, emphasizing that “[u]nder a compilation, we are not doing anything, you know, to verify the accuracy of that information, so that responsibility and accountability follows within the client to be doing those things so that the information is correct, because we didn’t do anything to verify that it is correct.” TT 464- 465. Harris further made clear that Whitley Penn would not have issued the 2021 SFC without a signed representation letter from the client, indicating that it acknowledged its responsibility for providing a fair presentation of values in accordance with GAAP. TT 480-481. Nicholas Haigh Nicholas Haigh worked as a risk officer and managing director of Deutsche Bank’s Private Wealth Management Division from 2008 to 2018. TT 980. The Private Wealth Management Division serviced high net worth individuals and provided various products to them, including credit products. As the risk officer, Haigh’s job was to examine the client’s credit exposure and determine whether a client’s credit request fit within the bank’s desired risk profile. TT 982. 8 of 92 Page 8 of 92 [* 8] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 When a client wanted a loan or other “credit facility” from the Private Wealth Management Division, a relationship manager would interface with the client and then speak with a lending officer at the bank. The lending officer would document the terms of a proposed loan in a credit memorandum that would be sent to Haigh and his team for final approval. TT 986-987. If the credit risk management team was comfortable with the terms and information contained in the credit memorandum, they would approve and sign off on the proposal. TT 989. Haigh was the most senior credit officer to sign off on the Deutsche Bank loans to the Trump Organization entities. TT 992. In 2011, the risk management team approved the terms of a credit facility to the “Trump Family”5 “based on the financial strength of the guarantor,” emphasizing that “[t]he financial profile of the guarantor includes on an adjusted basis, 135 million in encumbered liquidity, 2.4 billion in net worth and approximately 48 million in adjusted recurring net cash flow.” The risk management team noted that “[a]lthough facility is being extended to [a special purpose vehicle] for the purposes of financing the purchase of the resort, the credit exposure is being recommended primarily based on the financial profile of the guarantor,” further emphasizing the “[f]ull and unconditional guarantee of DJT which eliminates any shortfall associated with operating and liquidating Collateral.” PX 293; TT 1001. Haigh made clear that: The wealth management business at Deutsche Bank would not make loans secured just on collateral without a strong financial guarantee or personal guarantee from a financially strong person. Given that this was unusual collateral as a golf resort and spa, we would not really want to have to foreclose on that collateral and so we would most likely look to the guarantor to remedy any default – payment default on the loan. TT 1003-1004. In deciding to approve the credit facility, Haigh relied on Donald Trump’s 2011 SFC and assumed that the representations of value of the assets and liabilities were “broadly accurate.” TT 1009-1010; PX 330. The Deutsche Bank Credit Report’s “Financial Analysis” is based on numbers provided by the “family office” (here, the Trump Organization) and contains the same numbers represented in the SFC. PX 293; TT 1010-1013. Before approving the credit facility, the Private Wealth Management Division consulted Deutsche Bank’s Valuation Services Group about market conditions to arrive at a conservative estimate of the value of the commercial real estate should a need arise to liquidate during “bad market conditions.” TT 1013-1016. In so doing, the Valuation Services Group applied a 50% 5 The funds from this “Trump Family” credit facility would later be used to purchase Doral under the entity Trump Endeavor 12 LLC. 9 of 92 Page 9 of 92 [* 9] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 “haircut” to the valuations presented by the client, which Haigh affirmed was the “standardized number for commercial real assets.”6 TT 1016, 1041. Haigh affirmed that the Private Wealth Management Division would not have done business with Donald Trump without a personal guarantee, and that the personal guarantee was the reason for favorable pricing on the loan and the large size of the loan itself. TT 1017, 1020-1021, 1032. The Doral loan was conditioned on certain continuing covenants. One such covenant required Donald Trump to maintain a minimum net worth of $2.5 billion, excluding any value related to his brand. PX 293; TT 1024. As the “ultimate signer” of the credit risk management team, Haigh determined the required amount of Donald Trump’s minimum net worth “in order to make sure that the bank would be fully protected under adverse market conditions.” TT 1025-1026. In the event of a default of any of the covenants, Haigh stated the bank would have “various remedies … which it can pursue like waiving the breach, which it might do for an inconsequential breach; negotiating some variation of the terms of the loan; or potentially accelerating the loan and ask for repayment.” TT 1028. The covenant obligated Donald Trump to provide an annual financial statement. Haigh stressed that the annual SFCs were required because “[t]he bank wants to be sure that the client’s financial strength is being maintained and also the bank wants to be able to test its covenants periodically,” and that “[t]he bank would use the financial information that [the client] provided to test itself to try and ensure that the client is in compliance with those covenants.” TT 1022- 1023. In 2012, the Trump Organization, under the entity 401 North Wabash Venture LLC, sought another loan from Deutsche Bank’s private wealth division for a new project in Chicago (“Trump Chicago”). PX 291; TT 1028-1029. The credit memorandum indicates that the beneficial owner of the borrower was “Donald J. Trump.” PX 291. Like the previous credit facility, the Chicago facility was conditioned on a full and unconditional guarantee provided by Donald Trump; the Deutsche Bank risk team specifically noted “[a]lthough facilities are secured by the collateral, given its unique nature, the credit exposure is being recommended based on the financial profile of the guarantor.” PX 291; TT 1030-1033. Similar to the previous credit facility review, the risk management team utilized Deutsche Bank’s Valuation Services Group to estimate the value of the liquidation of the commercial assets in bad market conditions and applied a standard 50% haircut to the valuations represented by the client.7 TT 1033. 6 Haigh also confirmed that in addition to the 50% standard “haircut” applied to most commercial real estate assets, the risk management team applied a 75% haircut to Seven Springs as “properties under development or not yet developed potentially have a large range of outcomes of their value.” TT 1040- 1041; PX 293. 7 Beyond the 50% standard “haircut,” the credit risk management team adjusted another value that had been provided by the client. Upon discovering that Trump Tower had recently been refinanced, but not by Deutsche Bank, the financing entity had commissioned an appraisal that was made available to Deutsche Bank. Upon realizing that the independent appraised value was less than the number reported by the client, the credit risk management team confirmed that they were “adjusting the property value to reflect the recent appraisal and new debt.” PX 291; TT 1034-1035. 10 of 92 Page 10 of 92 [* 10] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 While he was seeking the loan from the Private Wealth Management Division and waiting to see if it would be approved, Donald Trump was simultaneously exploring a loan from Deutsche Bank’s Commercial Investment Bank Division, which maintained a commercial real estate lending group. PX 470; TT 1036-1038. The dueling proposals resulted in an internal Deutsche Bank memo, as Haigh explained, reflecting that “[t]wo business divisions at Deutsche Bank were making proposals on the same potential loan and … we wanted to be sure that they made sense with regard to each other so the bank didn’t look foolish in front of the client with two completely different sets of term sheets that bore no relation to each other.” PX 470; TT 1036- 1038. The memo indicated that for Trump Chicago, the Commercial Investment Bank Division would be willing to provide a loan on a non-recourse basis (i.e., no personal guarantee) at LIBOR plus 8%, and that the private wealth division would be willing to provide a loan on a full recourse basis (with an unconditional personal guarantee) at LIBOR plus 4%. PX 470; TT 1036- 1038. In 2014, the Trump Organization sought several more approvals from Deutsche Bank: (1) a loan for the Washington, D.C. “Old Post Office” project; (2) the renewal of an existing Trump Endeavor 12, LLC credit facility for Doral; and (3) an increase in the Trump Chicago credit facility. PX 294; TT 1041-1045. The approval process for these three discrete items was the same as the previous approval processes, except that a higher level of authority was needed to approve the transactions within the credit risk management team. TT 1045. Like the previous credit facilities, approval required Donald Trump, as guarantor, to maintain a minimum net worth of $2.5 billion, as “[t]he bank wanted to be sure that in an adverse market scenario the client would always have enough financial resources to be able to pay off our loan.” TT 1048- 1049. Like the previous credit facilities, the credit risk management team noted that “[a]lthough all three Facilities are secured by Collateral, given the unique nature of these credits, the credit exposure is being recommended based on the financial profile of the Guarantor.” PX 294; TT 1050. Haigh noted that the Private Wealth Management Division did not normally extend loans that involved substantial reconstruction on its collateral, here, the Old Post Office, so the loan was approved in reliance Donald Trump’s personal guarantee. TT 1050-1051. Once again, as a required covenant, Donald Trump was obligated to provide certifications and annual statements of financial condition so that the bank could test his required covenants at any time. TT 1049. Rosemary Vrablic Rosemary Vrablic worked at Deutsche Bank in the Private Wealth Management Division and was the chief relationship manager for the Trump Organization. TT 994, 5484-5486. Vrablic explained that her job was to be “an intermediary between the customer and/or prospect and the credit and lending parts of the bank.” TT 5486. Vrablic served as the client intermediary for the bank for all three of the loans that Deutsche Bank’s Private Wealth Management Division extended to Donald Trump. TT 5486-5487. Jared Kushner, Ivanka Trump’s husband, introduced Vrablic to Donald Trump in 2011. TT 5486, 5498-5499, 5511-5512. Vrablic testified that one goal of her job was to initiate a broad- based relationship with Donald Trump. TT 5499. Ivanka Trump was Vrablic’s main liaison for the subject credit facilities. TT 5504. 11 of 92 Page 11 of 92 [* 11] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 Vrablic was not a part of the credit risk analysis team, and she had no input or authority on whether credit was ultimately extended. TT 5578. She was not involved in the bank’s annual review of Donald Trump’s SFCs. TT 5554, 5578-5579. Vrablic confirmed, and emails corroborate, that when considering whether to extend the Doral loan, the head of the global asset management group wrote: “I support the transaction, but we need iron clad full recourse under all circumstances,” indicating that an iron-clad personal guarantee was a non-negotiable term of the loan. DX 313; TT 5519-5521, 5572-5573. Vrabalic further confirmed that each of the Trump family members she dealt with, including Donald Trump, Donald Trump, Jr., and Ivanka Trump, fully understood the recourse requirement to obtain a loan from the Private Wealth Management Division. TT 5574-5777; PX 1129. Vrablic expected Donald Trump to submit accurate financial information to the bank. TT 5579. Doug Larson Doug Larson is a valuation advisor and certified New York real estate appraiser who currently works at Newmark. Prior to working at Newmark, he worked at Cushman & Wakefield for almost 25 years. TT 1558-1559. In 2015, while at Cushman & Wakefield, Larson appraised 40 Wall Street for Ladder Capital as part of its due diligence. TT 1560-1570; PX 118. Larson testified clearly and credibly that although his name is cited as the source to justify a 2.940 capitalization (or “cap”) rate8 on Niketown, a property in which Donald Trump owned two long-term leases on 57th Street, Larson never had a specific conversation with Jeffrey McConney in which he advised him that such a cap rate would be appropriate; nor was he aware that he was listed as a source for such a cap rate. TT 1572-1575; See, e.g., PX 758. Larson further said that he would not have advised McConney to select that cap rate, as “it’s not how we would value [it] in our practice.” TT 1583. Larson stated that McConney was incorrect in stating that he consulted with Larson when valuing Trump Tower. TT 1581. Upon learning that his name had been repeatedly used to justify cap rates that he had not recommended, Larson said it was “inappropriate and inaccurate … I should have been told and, you know, an appraisal should have been ordered.” TT 1587. Larson further took issue with his name being used to justify a cap rate on the property controlled by a Vornado partnership interest. In 2012, Larson appraised the property at 1290 Avenue of the Americas at $2 billion with a cap rate of 4.5 percent. PX 1824; TT 1588-1589. Notwithstanding, in the following SFC’s supporting data, McConney cites Larson as the source for using a 3.12 percent cap rate, even though he never worked with McConney to pick a cap rate 8 A capitalization rate is calculated by dividing a property’s net operating income by the current market value. This ratio, expressed as a percentage, is an estimation of an investor’s return on real estate. The higher the cap rate, the lower the value. Cap rates have an extraordinarily large effect on the value of a property. 12 of 92 Page 12 of 92 [* 12] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 to value that property, and that he would not have, as valuing minority interests is a specialized area beyond his expertise. TT 1589-1595. In a 2015 appraisal of 40 Wall Street, Larson included the value of a Dean & Deluca lease that yielded annual rent of $1.4 million, and he applied a 4.25 percent cap rate, for a total valuation of $540 million. Notwithstanding, the 2015 SFC backup data double-counted the Dean & Deluca lease. McConney also chose a much lower cap rate than that on the appraisal and listed the total value of 40 Wall Street at over $735 million, citing Larson as the source. Larson repeatedly confirmed that he was not a source for that number, that the number was nearly $200 million more than his own appraisal, and that he did not work with McConney or anyone else at the Trump Organization to determine the cap rate used to generate the $735 million value.9 PX 118,729; TT 1601-1606. Jack Weisselberg Since 2008, Jack Weisselberg has worked at Ladder Capital as a “loan originator,” which includes finding new business and maintaining the client relationship throughout the life of a loan. TT 1770-1773; 1779. When originating a loan for the Trump Organization, Jack Weisselberg primarily communicated with Allen Weisselberg (his father), Jeffrey McConney, and Donna Kidder. TT 1790-1791. Jack Weisselberg understood that the Trump Organization had concerns about its financial information becoming public because of a potential Ladder Capital loan (stating in an email to his supervisor that Donald Trump is “nervous about Gucci’s rent becoming public knowledge, as he tends to embellish from time to time”). PX 650; TT 1811-1816. In spring 2015, Allen Weisselberg began inquiring about the possibility of refinancing a loan on 40 Wall Street that was serviced by Capital One Bank. In January 2015, Allen Weisselberg wrote to Capital One asking it to waive an upcoming required $5 million principal payment. After Capital One declined to waive the payment, Allen Weisselberg contacted Jack Weisselberg about Ladder Capital refinancing the loan. TT 1820-1826. In the application process, the Trump Organization provided Ladder Capital with a paper copy of the 2014 SFC, although later required that it be returned to the company. TT 1858-1861, 1873-1876. Ladder Capital relied on the SFC for information about Donald Trump’s net worth and liquidity, and Ladder Capital 9 In a theatrical attempt to halt the testimony of Doug Larson, defendants tried to impeach him with a 2014 email showing that McConney had asked for his advice on whether the fact that a ground lease had a far-off expiration would affect the cap rate in any way. Defendants then suggested that Larson had committed perjury and should be removed from the stand to consult with counsel. As an initial matter, the Court does not find Larson’s testimony to be contradictory. The fact that McConney sent one email in 2014 that generically discussed the effect of lease expirations on cap rates does not in any way give defendants cart blanche to cite Larson as an omnibus form of counsel that immunizes all the future manufactured valuations that comprised the SFCs. Further, defendants do not cite to this email in the supporting data for the SFCs, they cite to a series of telephone calls that, by Doug Larson’s account, never even took place. Moreover, the assertions of defendants’ counsel, Christopher Kise, that Larson’s testimony amounted to such blatant perjury he should be immediately removed from the stand to consult with counsel about his Fifth Amendment rights is belied by the record and seemed like nothing more than a performance for a non-existent jury. PX 109; TT 1696-1712; 1754-1767. 13 of 92 Page 13 of 92 [* 13] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 incorporated the information from the SFC into its risk memorandum when determining whether to approve the loan. TT 1878-1891. As a condition of the Ladder Capital loan on 40 Wall Street, and to avoid setting aside ongoing cash reserves as a condition of the loan, Donald Trump was required to guarantee unconditionally payment of certain obligations of 40 Wall Street LLC, including insurance, tenant improvements, leasing commissions, capital expenditures, and ground lease payments. PX 625, 645; TT 1884-1886. In 2017, the Trump Organization approached Ladder Capital about a short-term loan on its property on Central Park South, which was then unencumbered, for the purpose of funding a $25 million settlement arising out of litigation by OAG against Trump University. People v Trump Entrepreneur Initiative LLC, Docket No. 451463/2013, Doc. 1 (Sup Ct, NY County). Jack Weisselberg testified that he understood that the loan was necessary because “they had recourse obligations to another lender [Deutsche Bank] that limited the amount of cash they could access.” In approving the loan, Ladder Capital helped Donald Trump avoid triggering a default on his outstanding Deutsche Bank’s lending covenants. TT 1817-1820. David McArdle David McArdle was, and still is, the senior managing director of Cushman & Wakefield and a professional appraiser. TT 1909-1910. In summer 2013, attorney Sheri Dillon, on behalf of the Trump Organization, retained McArdle to appraise portions of the Trump National Golf Course in Westchester County, New York. Even though Sheri Dillon and her law firm retained Cushman & Wakefield, McArdle stated “[i]t was widely understood that [the] intended users of this document would also be the Trump Organization, Donald J. Trump, [and] Eric Trump.” TT 1919-1926; px 157. The engagement was focused on the valuation of 71 potential attached units within the confines of the Trump National Golf Club in Briarcliff (“Briarcliff”). TT 1926. McArdle was retained because the Trump Organization was “contemplating a donation, conservation easement donation, and they were looking for my input on valuation of this 71-unit project.” TT 1928. In performing this work, Eric Trump was McArdle’s primary point of contact at the Trump Organization. TT 1926- 1939, 1952. In fall 2013, McArdle told Eric Trump and Sheri Dillon that the highest supportable value for a potential conservation easement of the 71-units was $45 million. PX 1465; TT 1944-1945. McArdle explained that although “Eric had certain ideas of value” that were “a little more lofty and above $45 million,” the “team of Sheri, Bob and myself clearly recognized that we were sort of at the end here and anything beyond $45 million would have put some people at risk,” and “[i]t would not have been credible.” TT 1944-1945. In response, Eric Trump told McArdle to “hold off” sending a written appraisal. PX 3201; TT 1946-1948. In February 2014, McArdle was again retained for a similar engagement; this time he was tasked with valuing the same 71-units and, also, determining if a potential conservation easement would have any effect on the adjacent 18-hole golf club known as Trump National Golf Club 14 of 92 Page 14 of 92 [* 14] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 Westchester, which included an already-built town home owned by Eric Trump on the perimeter of the property. TT 1949-1950. In April 2014, McArdle provided a written appraisal to Sheri Dillon that valued the 71-unit plot at $43.3 million. PX 3194; TT 1958-1963. In June 2014, Eric Trump again retained McArdle to appraise the same plot of land and changed the scope of the engagement to consider more IRS tax guidelines. Despite the change in scope, McArdle once again valued the 71-unit plot at $43.3 million. PX 132, 3217; TT 1963-1972. In July 2014, Sheri Dillon, on behalf of the Trump Organization, engaged Cushman & Wakefield to appraise land on the Seven Springs property in Westchester, New York. PX 131; TT 1980- 1982. Once again, Eric Trump served as the primary point of contact for McArdle, including providing him with proposed comparables. TT 1983-1986. McArdle understood this to be a verbal assignment (meaning the client did not want to receive a written appraisal), but McArdle was obligated to build a work file as he “certainly couldn’t keep everything in [his] head.” TT 1988-1989. McArdle concluded that the valuation ranged from $36-50 million before discounting to present value, and $29.5 million when discounting was applied. TT 1990-1994. McArdle communicated these results verbally to Eric Trump in August 2014, before closing out the engagement at Sheri Dillon’s request in October 2014. PX 3206, 911, 185; TT 1995-1997. In June 2015, Eric Trump once again retained Cushman & Wakefield to appraise Seven Springs. This time, McArdle was unavailable, so he referred the assignment to a colleague, Tim Barnes. PX 104; TT 2001-2002. McArdle, whom the Court found credible, stated that Eric Trump’s testimony that he was not involved in the appraisal work on the Seven Springs property did not conform to McArdle’s recollection of events. TT 2005. William Kelly William Kelly is the general counsel of Mazars, a role he assumed in 2018. TT 2111, 2115. Kelly participated in the decision to terminate Mazars’ relationship with the Trump Organization in spring 2021. TT 2115-2116. Kelly said that the decision to terminate the relationship was based upon what Mazars “had come to learn about Allen Weisselberg,” stating: Allen Weisselberg was the CFO of the Trump Organization. He was our main contact at the Trump Organization for the providing –for them providing us financial information. If his representations to us about the accuracy and truthfulness of the financial records that he’s providing to us as the outside accountants is compromised, if we can no longer rely on him as CFO, then we can no longer perform our engagements. The engagements we were preparing at the time were preparing tax returns for the corporate entities and Donald Trump individually, as well as doing the statements of financial condition. Both of those engagements require that we rely upon the representations of management, in this case, Allen Weisselberg, the 15 of 92 Page 15 of 92 [* 15] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 CFO. If we are no longer allowed or no longer reasonably allowed to rely on his management, we can no longer do those engagements. TT 2116-2117; PX 2992. Kelly, on behalf of Mazars, followed up with a letter to the Trump Organization dated February 9, 2022, in which he stated, as here pertinent: We write to advise that the Statements of Financial Condition for Donald J. Trump for the years ending June 30, 2011-June 30, 2020, should no longer be relied upon and you should inform any recipients thereof who are currently relying upon one or more of those documents that those documents should not be relied upon. We have come to this conclusion based, in part, upon the filings made by the New York Attorney General on January 18, 2022, our own investigation, and information received from internal and external sources. While we have not concluded that the various financial statements, as a whole, contain material discrepancies, based upon the totality of the circumstances, we believe our advice to you to no longer rely upon those financial statements is appropriate. PX 2994; TT 2119-2128. Kelly further emphasized that when Mazars was issuing the SFCs for Donald Trump, Mazars was performing a compilation, which is the lowest level of scrutiny of financial statement preparation, and which relies on the representations and information provided by the client. TT 2128-2131, 2149. Michael Holl Michael Holl is an employee of HCC Global (“HCC”), an international specialty insurance group. From 2015-2018, Holl served as an underwriter. TT 2487-2490. In December 2016, Holl was contacted by a broker at AON NY on behalf of the Trump Organization, indicating that the company was seeking additional Director & Officer (“D&O”) coverage. TT 2491-2492. Holl confirmed that to underwrite the account he would need to look at the “financials for those companies to understand what their financial situation is,” as it is relevant to assessing the risk. TT 2494. Holl elaborated that “[i]t’s relevant because you’re trying to find out if they’re a successful company and if they’re profitable and if they are in debt that they can’t manage and what their overall financial health is,” and “[i]f they are a bankruptcy risk, there is significant increase in the likelihood of a D&O claim if a company goes bankrupt.” TT 2494-2495. On January 10, 2017, Holl attended a meeting at the Trump Organization with Allen Weisselberg and other Trump Organization employees for the purpose of reviewing the Trump Organization’s financials as part of the insurance company’s due diligence. PX 588; TT 2496-2498, 2516. On the way home from the meeting, Holl drafted an email to his supervisors memorializing the information he obtained. PX 2985; TT 2498-2499. Holl’s contemporaneous email reads: “Saw very few financials but did see the balance sheet for year ends 2015. They assured me that the 16 of 92 Page 16 of 92 [* 16] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 one being put together is better. They have total assets of 6.6 BB. Cash of $192 mm. Total debt of $519 mm. No single debt larger than $160mm.” PX 2985. Holl testified that the $192 million in cash was a meaningful number for him, as it “was a measure of liquidity for the company.” TT 2500. Holl’s contemporaneous email also reads: “No material litigation or communication from anyone.” PX 2985. Holl understood this to be a representation from the Trump Organization that there was no pending litigation or notices or communication that could lead to litigation and implicate the D&O policy, which he viewed in a positive light. TT 2500-2502. Holl deemed these representations relevant when HCC ultimately decided to extend coverage. TT 2502. Sheri Dillon Sheri Dillon is a tax lawyer who provided business and legal advice to the Trump Organization from 2005 through 2020. TT 2527. Throughout her various engagements from 2011-2020, Dillon interfaced with Donald Trump, Donald Trump, Jr. Eric Trump, Ivanka Trump, Patrick Birney, and Jill Martin. TT 2532-2534. Contrary to the representations made to Holl about no pending litigation or claims, as early as June 2016 Dillon was aware of claims made against the Trump Organization that could trigger liability, and she had discussed such claims with Donald Trump, Jeffrey McConney, and Allen Weisselberg. TT 2540-2555. Part of her work for the Trump Organization was advising it about potential conservation easements. TT 2531. Dillon explained that a conservation easement is essentially a “negative covenant” in which someone who owns property agrees, in a recorded deed that runs in perpetuity with the land, not to do something, in exchange for a tax deduction that is “equal to the value of the easement.” TT 4123-4126. Dillon recalls working on potential conservation easements at Trump National Golf Club LA (“TNGCLA”), Briarcliff, and Seven Springs. As part of her engagements, Dillon would retain appraisers from Cushman & Wakefield. She explained that obtaining a qualified appraisal to value the potential conservation easement is an essential part of the process, as only a qualified appraisal could determine the value of the tax deduction that could be taken. TT 4127-4128. She clarified that qualified appraisers were tasked with determining the “highest and best use” of a property if it were developed. TT 4141-4142. When working on a potential conservation easement for TNGCLA, Dillon retained Brian Curry, of Cushman & Wakefield, who valued the driving range on the property at between $27-28 million in 2014. PX 944; TT 2578-2580. On March 12, 2015, Cushman & Wakefield sent an appraisal of the TNGCLA driving range portion of the property that valued it at $25 million as of December 26, 2014; the appraisal also valued the entire TNGCLA property, before any potential conservation easement, at $107 million. PX 1464; TT 2598-2603. Although Dillon could not recall exactly with whom at the Trump Organization she shared this valuation, she knows it 17 of 92 Page 17 of 92 [* 17] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 would have gone to McConney, as he “would have needed it.” TT 2608-2611. Further, email communications demonstrate ongoing discussions between Dillon, Weisselberg, and Trump, Jr. about the potential conservation easement on TNGCLA. PX 1412; TT 4142-4146. Notwithstanding, the 2015 supporting data and accompanying SFC valued TNGCLA at over $140 million. PX 731; TT 2611-2623. In 2013, Dillon engaged Cushman & Wakefield, on behalf of the Trump Organization, to explore the potential benefits of donating a conservation easement over parts of the Trump National Golf Club located in Briarcliff. PX 157; TT 2626-2628. In so doing, Cushman & Wakefield was tasked with determining the value of 71 hypothetical residential units that could be built on the property. TT 2628; PX 3261. On October 1, 2013, David McArdle emailed Dillon and her colleague, indicating that McArdle was ready to move forward with a written appraisal report on Briarcliff. PX 3197. On October 16, 2013, Dillon emailed McArdle, as here pertinent: I spoke to Eric and he is aware that the more supportable value at this point is around $45M… I further explained that we needed to reconcile the comp sales approach with the [discounted cash flow], and in so doing, you and your team arrived at a value of around $45M, which remains quite substantial. I also noted that in the event the claimed value was too far off as ultimately determined by the IRS or a Court, a taxpayer could be subject to [a] valuation misstatement penalty, and we wanted to ensure that there would be no argument that a valuation misstatement occurred. Eric was pleased with the number. PX 1465. Later that same day, Eric Trump emailed McArdle and Sheri Dillon, instructing McArdle to finish the appraisal “but hold off sending the appraisal until further notice.” PX 3201. In February 2014, Dillon’s firm once again engaged Cushman & Wakefield to appraise Briarcliff. PX 158. In April 2014, Cushman & Wakefield submitted a written appraisal to Dillon, valuing the hypothetical 71-unit development at Briarcliff at $43.3 million. PX 3194; TT 2687. Dillon confirmed that it would have been her practice to share the values with her client along the way. TT 2687. Notwithstanding, beginning in November 2015, Eric Trump instructed McConney to leave the value of the 71 units at just over $101 million. PX 742, 758, 843. TT 3378-3379. He continued to do this for the 2016, 2017, and 2018 SFCs. By at least June 2014, Dillon became aware that the Trump Organization’s rights to build units at Briarcliff had been reduced from 71 units to 31 units. PX 3261; TT 2701-2702. Notwithstanding, the supporting data for every SFC from 2015-2021 values Briarcliff as if it had the right to build 71 units, and, indeed, explicitly states: “Sale of 71 Mid-Rise units approved.” PX 731, 742, 758, 774, 843, 857, 1501. 18 of 92 Page 18 of 92 [* 18] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 In October 2012, Dillon, on behalf of the Trump Organization, engaged appraiser Robert Heffernan “to provide a written appraisal… estimating the fair market value of a conservation easement placed on the Client’s property located in the town of New Castle, New York (the ‘Seven Springs Estate’) for federal income tax purposes.” PX 908; TT 2703-2704. Email correspondence from Heffernan to Dillon demonstrates that as of December 18, 2012, Dillon was aware that Heffernan valued the potential Seven Springs conservation easement over seven mansion lots at $775,000 per raw lot, an estimate that would have valued the entire seven- mansion development at approximately $5.5 million. PX 3296; TT 2707-2708. Notwithstanding, the SFC backup data for 2013 demonstrates that on August 20, 2013, Eric Trump advised McConney to value the seven-mansion undeveloped plots on the SFC at a staggering $161 million. PX 708. By September 8, 2014, McArdle completed another verbal estimate of the value of the seven- mansion development at Seven Springs, this time valuing it at $14 million. PX 169, 181. Notwithstanding, the SFC backup data for 2014 demonstrates that on September 12, 2014, Eric Trump again advised McConney to value the seven-mansion undeveloped plots on the SFC at $161 million. PX 719. In June 2015, Eric Trump re-engaged Cushman & Wakefield to perform yet another appraisal on the potential Seven Springs conservation easement, this time asking it to value not just the seven- mansion undeveloped lots, but the entire Seven Springs property encompassed by three towns. PX 104; TT 2723. PX 195; TT 2724-2725. On November 6, 2015, Timothy Barnes of Cushman & Wakefield emailed Dillon its appraisal, which valued the entire Seven Springs property at $56.6 million, and the 7-mansion undeveloped lots at $23.5 million. PX 195; TT 2725-2726. As was her customary practice, Dillon informed her client of the appraisal. TT 2727. David Cerron David Cerron is the assistant commissioner for business development and special events at the New York City Department of Parks and Recreation (“NYC Parks”). TT 2786-2787. In February 2010, NYC Parks published a Request for Offers (“RFO”) for operation and maintenance of a golf course at Ferry Point Park in the Bronx (“Ferry Point”). PX 3290. Cerron confirmed that NYC Parks was seeking an “entity that ha[d] the financial wherewithal to ensure that the course is maintained at a high level and also any other capital work that would be necessary.” TT 2793-2794. Cerron explained that NYC Parks had already invested $120 million in Ferry Point and “wanted to be sure that whoever we had operating the course had the financial capability to deliver on their obligations including making sure the course was operating and working every day.” TT 2794-2796. The RFO further stated that all offers had to include “financial statements and other supporting documentation of the Responder’s financial worth.” PX 3290. In March 2010, the Trump Organization submitted an offer in response to the RFO; the offer included a letter from Mazars stating that according to Donald Trump’s 2009 SFC, which 19 of 92 Page 19 of 92 [* 19] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 Mazars had compiled, Donald Trump represented that his net worth was in excess of $3 billion and that he had over $200 million in cash reserves. PX 1331; TT 2796-2797. NYC Parks received four offers in response to the RFO. TT 2796. NYC Parks ultimately awarded the contract to the Trump Organization. In doing so, it highlighted that “Trump has provided Parks with documentation from WeiserMazars LLP, Certified Public Accountants, stating that Donald J. Trump has a substantial net worth and cash position. As set forth in Exhibit V to the concession agreement, there is also a personal guarantee from Donald J. Trump regarding payment obligations and the completion of capital improvements.” PX 3291; TT 2298-2800. The award further emphasized that “Trump will be subject to auditing by Parks, the NYC Comptroller and Parks-authorized auditors.” PX 3291. Cerron testified that NYC Parks relied on the representations of Trump’s net worth and liquidity and considered it important to “receive truthful, accurate and complete information from offerors.” TT 2801-2802. Donald Trump signed the license agreement with NYC Parks on February 21, 2012. DX 981. The agreement required him to submit a personal guarantee to NYC Parks for financial obligations arising out of the operation of Ferry Point. DX 981; PX 3283. The guarantee additionally obligated Trump to submit an annual letter from his accountant stating that there had been no material adverse change in his net worth from the financial statements shared with NYC Parks during the RFO process (the “No MAC letters”). PX 3283; TT 2804-2805. The Trump Organization submitted No MAC letters to NYC Parks in 2011, 2013, 2016, 2017, 2018 and 2021, and in each letter, Mazars relied on that year’s SFC for the representation that there had been no material, adverse change in Donald Trump’s net worth. PX 3282, 3284, 3285, 3286, 3280, 3281. Cerron confirmed that NYC Parks expected that the No MAC letters would be true, complete and accurate, and that the submission of false or fraudulent information in the No MAC letters would be a matter of concern for NYC Parks and could lead to a referral to the New York City Department of Investigations. TT 2805-2806, 2812-2816. In June 2023, the Trump Organization assigned the Ferry Point license to Bally’s Corporation. The Trump Organization received $60 million from the deal, and Bally’s agreed to pay an additional $115 million to the Trump Organization if Bally’s obtained a gaming license for the site. TT 2850; PX 3304, 3306. Claudia Markarian Claudia Markarian, previously Claudia Mouradian, was an underwriter at Zurich Insurance from 2010-2020. PX 3324 at 7-10. During the period from late 2017 through 2020, she worked on the Trump Organization account as an underwriter for the commercial surety program. PX 3324 at 8, 18. Markarian worked with the insurance brokerage firm AON during her time working on the Trump Organization account. PX 3324 at 18. Markarian recalled that when reviewing the Trump financials for her underwriting responsibilities, she was prohibited from retaining a copy of any financials, and she was only permitted to view them at Trump Tower with Allen Weisselberg or Jeffrey McConney, or both, 20 of 92 Page 20 of 92 [* 20] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 in the room at all times. Markarian testified that this was a “rare requirement by a customer.” PX 3324 at 17-18, 24-25, 58-59. During these on-site reviews at the Trump Organization, which occurred in late 2018 and early 2020, Markarian was shown the 2018 and 2019 SFCs, respectively, which listed as assets real estate holdings with valuations that Allen Weisselberg represented to Markarian had been determined each year by an outside professional appraisal firm. PX 1561, 1552, 3324 at 25-32. Markarian considered Weisselberg’s representation, which she recorded in her contemporaneous notes, to be favorable and an indication that the valuations were reliable. PX 1561, 1552, 3324 at 51-75. Notwithstanding Weisselberg’s explicit representation to Markarian, the Trump Organization never retained a professional appraisal firm to prepare any of the property valuations for the 2018 and 2019 SFCs. TT 952-955. Markarian’s contemporaneous memorandum for each on-site review reflected the amount of cash on hand, which she considered to have “great bearing” on her analysis because it indicated Donald Trump’s liquidity and represented the funds available to repay Zurich for a loss. PX 1561, 1552, 3324 at 30, 51-52. Markarian testified that she “relied on what [Weisselberg] said” about the valuations being determined by professional appraisers when she made her recommendation that the surety program be renewed in 2019 and 2020. PX 3324 at 32-34. She further relied on Weisselberg’s representation that the Trump Organization real estate assets do not fluctuate much in value regardless of economic cycles,10 and on the values in the 2018 and 2019 SFCs when making her recommendation to renew the programs. PX 3324 at 33-52. Markarian testified that at the time, she had no reason to doubt that Weisselberg was being truthful and honest in his representations and that she accepted at face value his representations about the values contained in the SFCs. PX 3324 at 28-53. When presented with Weisselberg’s testimony that confirmed that the Trump Organization did not engage any professional appraisers to perform valuations of the properties in the SFCs, Markarian testified that Weisselberg’s misrepresentations would have been “material” to her analysis, as “without the third party it – it means that there’s –it could possibly be less reliance on the numbers that are presented to me.” PX 3324 at 52-54. Markarian further testified that Weisselberg’s misrepresentations about the cash on hand, and specifically misrepresenting Donald Trump’s partnership interest in Vornado as cash available to him, would also have been “material” in her analysis to approve the renewals. PX 3324 at 54-56. Markarian stated that because the Trump Organization is a private company, not a publicly traded company, there is very little that underwriters can do to learn about its financial condition, other than to rely on the financial documents that the client provides to them. PX 3324 at 57. She explained that because of that, “it’s important to know that our customers are being truthful to us. If they’re not giving us true information or accurate information, that greatly impacts our underwriting decisions.” PX 3324 at 56-57 (further testifying that “if we find out that there’s – that they’re being untruthful, it will impact our underwriting of the account”). 10 Despite Weisselberg’s repeated representations to Markarian, in reality the values in the SFCs for a number of properties varied significantly over time. PDX 3. 21 of 92 Page 21 of 92 [* 21] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 David Williams David Williams has worked at Deutsche Bank for the past 17 years. TT 5324. He is currently a senior lender and team leader in the Private Wealth Management Division. TT 5324. Williams testified that, generally, a payment default is more material than a covenant default, as it “speaks definitively to the repayment of the loan.” TT 5337. Williams stated that he was not aware of any payment defaults on any of Donald Trump’s loans with Deutsche Bank. TT 5339. Williams corroborated the testimony of Nicholas Haigh that Deutsche Bank would apply a standard 50% haircut to the values of assets supplied by a client on an SFC, testifying that “it is – it is after we have made what I would say are generally our standard adjustments that we apply to really any given high-net-worth individual or ultra-high-net-worth individual’s provided financial statements.” TT 5374-5375, 5382-5384. Williams confirmed that the numbers to which Deutsche Bank applied its standard haircut in evaluating the credit risk of the Trump loans came from Donald Trump’s SFCs. PX 498; TT 5400-5403. Williams testified that Donald Trump agreed to continue a guarantee requirement “in order to keep a more favorable pricing on the loans.” TT 5406-5407, 5417-5419; PX 498. In summer 2019, Deutsche Bank sent three different letters to Donald Trump, indicating that he was not in compliance with his Debt Service Coverage Ratio covenants under the Trump Chicago, Doral, and Old Post Office loans. PX 520, 521, 522. Williams confirmed that these notices were sent to Donald Trump because the covenant breaches could implicate the personal guarantee. TT 5410-5415. Williams testified that there were two more breaches of the Old Post Office and Trump Chicago loans in 2020. TT 5419-5420. Williams went on to detail that all three loans breached their debt service coverage requirements in 2021, resulting in Deutsche Bank commissioning appraisals on all three properties. TT 5424-5425; PX 561. Williams confirmed that in July 2021, Deutsche Bank determined to “exit” the client relationship with Donald Trump, stating “we would be opting not to renew or extend that credit facility, and we would advise the client with some advance notice of that.” TT 5425-5427; PX 561. Williams further corroborated that as a lending officer, he would expect a client to provide truthful and accurate information to the bank, and that Donald Trump’s net worth and personal guarantee were significant factors in Deutsche Bank’s determining whether to underwrite a loan. TT 5427-5428. Williams additionally confirmed his previous deposition testimony, in which he stated that had he determined that Donald Trump’s net worth fell below $2.5 billion at any time, he would have recommended that the private wealth division declare an “event of default.” TT 5429-5430. 22 of 92 Page 22 of 92 [* 22] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 Emily Pereless Emily Pereless, formerly Emily Schroder, worked at Deutsche Bank from 2007 through 2015. TT 5448-5449. For a time, she worked as an analyst in the lending group of the Private Wealth Management Division. TT 5449-5451. Pereless confirmed that, at the request of the client, she went to Trump Tower to review Donald Trump’s financial statements. TT 5454-5455. She testified that in preparing a credit risk memorandum for a potential credit facility, the credit risk team would consult with Deutsche Bank’s Valuation Services Group about market conditions. TT 5455-5456. Pereless confirmed that her responsibility as a lender was to analyze the information provided and compile a report. TT 5459, 5463-5464, 5467. The Individual Defendant Witnesses Jeffrey McConney Jeffrey McConney was Controller of the Trump Organization from the early 2000s until February 25, 2023. TT 581-582; PX 3041 at ¶ 736. At the time of his testimony, McConney was still awaiting receipt of $125,000 of the $500,000 severance package the Trump Organization promised him. TT 582. McConney reported directly to Allen Weisselberg, the Chief Financial Officer (“CFO”), and to Donald Trump. TT 4910-4911. McConney took over responsibility for preparing the valuations for Donald Trump’s SFCs sometime in the 1990s and had primary responsibility for preparing the valuations and supporting data between 2011 and 2017. TT 583. Beginning in 2016, McConney began receiving assistance from Patrick Birney, who took over primary responsibility for preparing the valuations used in the SFCs after 2017. TT 583-584. McConney created and maintained annual spreadsheets referred to as “Jeff’s Supporting Data” (or “supporting data” or “supporting spreadsheets”) that contained the itemized valuations that became the aggregate numbers reported on the SFCs. Each annual version of Jeff’s Supporting Data11 contained two years’ worth of information—the current year and the prior year—and included the valuation methodology and valuations for each of the assets used in the SFCs. TT 588. When McConney had primary responsibility for maintaining Jeff’s Supporting Data, all decisions about valuation would be made by him, in consultation with Allen Weisselberg. When Patrick Birney first came on board, decisions were made by McConney, Weisselberg, and Birney. Once Birney took over primary responsibility for maintaining Jeff’s Supporting Data, Birney and Weisselberg made the initial valuation decisions. TT 589. 11 The employees of the Trump Organization continued to refer to the annual spreadsheets as “Jeff’s Supporting Data” even after McConney turned over responsibility for maintaining and updating the spreadsheets to Patrick Birney. TT 588, 1204, 1254, 1285, 1465. 23 of 92 Page 23 of 92 [* 23] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 McConney understood that it was Donald Trump’s or his trustees’ responsibility to make sure that all financial records and related information were provided to Mazars. TT 590-591. McConney further understood that Donald Trump had engaged Mazars to perform a compilation, which differs significantly from a review or an audit. McConney acknowledged that the preparation of the compilation does not contemplate that the accountants would inquire, perform analytical procedures, assess fraud risk, or test accounting records. TT 592-594. He confirmed that Donald Trump would get final review for each financial statement after McConney and his team prepared it and Weisselberg approved it. TT 596-597, 5047. McConney’s emails and contemporaneous notes indicate that Eric Trump and Donald Trump, Jr. had final review of the SFCs after Donald Trump assumed the presidency of the United States, TT 5079-5084; PX 1361. McConney testified that he never hid any information from Donald Bender. TT 4915. However, this is belied by the documentary evidence and the testimony of Bender, which conclusively establish that Mazars did, in fact, inquire about appraisals, and that McConney falsely told them that there were none. TT 242-247, 4915, 4930; NYSCEF Doc. No. 1262 at 243. McConney testified that nearly all the disclaimer and valuation disclosure language that appeared in the SFCs was written by Mazars. However, he was then confronted with his handwritten notes to the draft SFC language that demonstrated that he, himself, marked-up and made changes to the majority of the language and forwarded those changes to Mazars to incorporate. TT 4928- 4937, 5055-5059; PX 729, 3054. When confronted with this evidence, McConney conceded that “[m]y memory was incorrect” on direct examination and that he “frequently made changes.” TT 5059-5071. McConney was aware that Donald Trump had no right to withdraw funds from his interest in Vornado Partnerships, and yet he listed the interest on the SFCs from 2013 to 2021 as if it were cash immediately available to Donald Trump. TT 617-626, 5019. McConney knew that the SFCs had to be GAAP compliant. TT 629-630. He admitted pre-trial that it was “undisputed” that GAAP defines “estimated current value” as “the amount at which the item could be exchanged between a buyer and seller, each of whom is well informed and willing, and neither of whom is compelled to buy or sell.” PX 3041 at ¶ 31. After some equivocation, and baseless objections by counsel,12 McConney confirmed this at trial. TT 627- 631. During the period of 2012-2016, the Trump Organization hired Cushman & Wakefield to appraise 40 Wall Street, as required under the terms of another lending agreement. Doug Larson, of Cushman & Wakefield, was the primary contact on this project, and McConney was the Trump Organization’s conduit for all 40 Wall Street appraisals. TT 668-669. As part of these 12 Counsel for defendants, Christopher Kise, inexplicably tried to assert that McConney was not bound by his clear admission of “undisputed” in his response to OAG’s Statement of Material Facts pursuant to 22 NYCRR 202.8-g. However, as the admission was affirmative and unequivocal, counsel’s argument is without merit. 24 of 92 Page 24 of 92 [* 24] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 appraisals, Larson included cap rate calculations that he viewed as appropriate for the specifics of the property. On the valuations for the SFCs for the corresponding subject years, McConney selected cap rates that were lower than those that Doug Larson selected.13 The supporting spreadsheets for the same time period credit Doug Larson as the source for the chosen cap rates, notwithstanding that the rates were much lower than those that appeared in Larson’s appraisals. When questioned about the difference, McConney admitted that when choosing the lower cap rate, he relied on a generic marketing report that Cushman & Wakefield emailed a large customer base that was derived from data not specific, or even closely related, to 40 Wall Street. TT 660-681, 4995, 5101-5102. McConney further admitted that he made no attempt to adjust the numbers to reflect more accurately the value of 40 Wall Street when he was selecting cap rates. TT 681-682. When questioned about his working relationship with Doug Larson and his knowledge of these appraisals, McConney’s credibility was severely impaired, as he obfuscated and equivocated at length before finally conceding that between 2012 and 2016, when he was preparing the valuations for the SFCs, he was simultaneously acting as the conduit for Doug Larson for information needed for formal appraisals of 40 Wall Street. TT 668-674. He further admitted that despite his knowledge of these Cushman & Wakefield appraisals, he never sought to use any of these values for 40 Wall Street in the SFCs. TT 674-675. When valuing Trump Park Avenue on the SFCs, McConney knowingly valued rent-regulated apartments using an anticipated selling price that assumed not only that the apartments were unrestricted, but that they had already been renovated, thus failing to discount future value to present value. TT 4946-4953, 5097-5099. Although he testified that he knew “very little” about conservation easements, McConney said that he would select a value for the conservation easement based on “an appraisal done specifically for the conservation easement that had a before donation and after donation value.” TT 5000-5001. However, the SFCs from 2012-2014 demonstrate that McConney ignored several Seven Springs appraisals commissioned by the Trump Organization that valued the potential seven-mansion development at between $5.5 million and $21 million and instead valued the seven-mansion development at $161 million, citing Eric Trump as the source. PX 1075. McConney testified that for every SFC, Donald Trump valued Mar-a-Lago as if it were a private residence and not a social club, despite knowing that “Mar-a-Lago is a social club.” When asked the reason for his doing so, he testified: “I don’t remember off the top of my head.” TT 5018- 5022. McConney’s credibility was further compromised when he was questioned about his testimony in the recent criminal trial of the Trump Organization brought by the District Attorney of New York. Initially, when questioned by OAG, McConney denied that Allen Weisselberg ever asked 13 Cap rates have an extraordinary effect on the value of a property, and the higher the cap rate, the lower the value. In a single year, McConney selected a cap rate of 3.04% that resulted in a $227 million dollar increase in the value of a property as compared to the appraisal’s cap rate of 4.25%. TT 660-664, 678- 679. 25 of 92 Page 25 of 92 [* 25] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 him to commit fraud on behalf of the Trump Organization. However, when confronted with his sworn testimony from the criminal trial, McConney admitted that Weisselberg did, on more than one occasion, ask McConney to assist him in committing tax fraud. TT 776-778. He further conceded, after initially denying, that even though he knew these activities were illegal at the time he was performing them, he continued to assist Weisselberg in committing fraud, as he was afraid that if he refused Weisselberg’s requests he would lose his job. TT 776-778. Plaintiff questioned McConney about his “Separation Agreement” with the Trump Organization, pursuant to which was to receive $500,000, to be paid in installments, the last of which remains outstanding. TT 5075. Plaintiff questioned him as to whether his agreement includes the same covenant found in Weisselberg’s separation agreement that prohibits voluntary cooperation with governmental investigations or any entity “adverse” to the Trump Organization. TT 5075-5076. McConney testified that he could not recall if his agreement contained that covenant, further straining his credibility, as it seems implausible that McConney would not remember such a requirement, given the many investigations in which the Trump Organization has been engaged since McConney signed the agreement. When asked how he feels today about the work he did on Donald Trump’s SFCs, McConney replied: “I feel great. I have no problems with the work I did on this.” TT 5041. Allen Weisselberg Allen Weisselberg was the CFO of the Trump Organization from 2002 until he was placed on leave in October 2022, after pleading guilty to 15 criminal counts of tax fraud and falsification of business records at the Trump Organization. TT 790; PX 1751, 3041. In that same vein, his testimony in this trial was intentionally evasive, with large gaps of “I don’t remember.” He conceded that his Separation Agreement, on which he is still apparently awaiting four payments, prohibits him from voluntarily cooperating with any entity “adverse” to the Trump Organization or its former or current employees. PX 1751. That alone renders his testimony highly unreliable. The Trump Organization keeps Weisselberg on a short leash, and it shows. As CFO, Weisselberg oversaw the Trump Organization’s accounting department, although he was not a certified public accountant (“CPA”) and did not know any components of GAAP. TT 788-790, 864. Before Donald Trump assumed public office in 2017, Weisselberg reported directly to him. TT 790. McConney reported directly to Weisselberg from the time McConney was hired until the time Weisselberg left the Trump Organization. TT 791. After Donald Trump assumed the presidency, Weisselberg’s reporting structure was “more informal”; he dealt “mostly with Eric Trump,” and “periodically” with Donald Trump, Jr. TT 790. From January 2017 through 2021, Weisselberg and Donald Trump, Jr. were the trustees of the Donald J. Trump Revocable Trust and were responsible for the preparation and fair presentation of its SFCs. TT 794-795, 961-963; PX 756, 769, 1016. From 2011 until at least 2020, Weisselberg had a primary role in preparing the valuations for the SFCs, supervising McConney from 2011 until late 2016, and Birney and McConney from late 2015 until at least 2020. TT 1228-1231, 3561; PX 3041 at ¶ 714. 26 of 92 Page 26 of 92 [* 26] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 Each year from 2011 to 2020, Weisselberg signed SFC engagement and management representation letters (the “Management Representation Letters”) as an executive officer of the Trump Organization (and for the 2016-2020 SFCs, also as a trustee of the Donald J. Trump Revocable Trust). PX 3041 at ¶ 716-735, PX 753, PX 786. The Management Representation Letters to Mazars stated, as here pertinent, that the Trump Organization and Donald Trump undertook the following responsibilities: (a) the preparation and fair presentation of the financial statements in accordance with the accounting principles generally accepted in the United States of America. (b) designing, implementing, and maintaining internal controls relevant to the preparation and fair presentation of the financial statements. (c) preventing and detecting fraud. (d) identifying and ensuring that the company complies with the laws and regulations applicable to its activities. (e) the selection and application of accounting principles. (f) making all financial records and related information available to [Mazars] and for the accuracy and completeness of that information. See, e.g., PX-791. When Weisselberg signed the Management Representation Letters, he understood their contents, that Mazars was relying on those representations, and that Mazars would not have issued the SFCs without having secured those representations. TT 835-837, 969. Weisselberg further admitted that he was obligated to advise Mazars of the existence of any information in the Trump Organization’s possession that would contradict or be inconsistent with the values represented in the SFCs. TT 846-847. Notwithstanding his lack of knowledge of GAAP and his not knowing what the term “estimated current value” means, each year, Weisselberg represented to Mazars that the SFCs were presented in conformity with GAAP and that assets in the SFCs were stated at their estimated current value. TT 839-842. 940; see, e.g., PX 706. Weisselberg provided dozens of certifications to lending institutions affirming the truth and accuracy of the SFCs, knowing that if he failed to do so, Donald Trump would be in breach of his various loan covenants. TT 923-935. Between 2011 and when Donald Trump became president, before finalizing each SFC and its valuations, Weisselberg would give them to Donald Trump for final review and changes. TT 898. Weisselberg would not have permitted a final draft of the SFC to be issued to Mazars unless Trump had reviewed and was satisfied with it. PX 3041 at ¶ 676; TT 900. Once Donald Trump assumed the presidency, Weisselberg would give the SFCs to Eric Trump or Donald Trump, Jr. for final review. TT 899. 27 of 92 Page 27 of 92 [* 27] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 Weisselberg testified that “I certainly am not one to value a property. I have no idea what properties are worth.” TT 896. Yet, Weisselberg also testified that he knew that the selling price, not the asking or offering price, is the relevant number in selecting comparable properties. TT 887-888. Weisselberg had final approval over the 40 Wall Street budgets and was, thus, aware that in 2011, the Trump Organization had a negative cash flow from 40 Wall Street. TT 1499, 1520- 1521. He nonetheless directed Donna Kidder, a Trump employee who worked in accounting, to prepare a document containing a series of implausible assumptions to generate a $26.2 million net operating income.14 Weisselberg concealed from Kidder that these assumptions would be used for the SFC’s valuations. TT 1523-1526, 1529. Weisselberg confirmed that insurance company representatives could only review financial information at Trump Tower and were not permitted to make copies or take anything with them. TT 1187. On January 9, 2023, Weisselberg entered into a “Separation Agreement and General Release” with the Trump Organization wherein the Trump Organization promised him a total of $2 million dollars in installment payments as long as he performed his obligations under the agreement. Section 3(d) of the separation agreement provided that: [E]xcept for acts or testimony directly compelled by subpoena or other lawful process issued by a court of competent jurisdiction, he will not: (1) communicate with, provide information to, or otherwise cooperate in any way with any other person or entity, including his counsel or other agents, having or claiming to have any adverse claims against the Company or any person or entity released by this Agreement, with regard to the adverse claim; or (2) take any action to induce encourage, instigate, aid, abet or otherwise cause any other person or entity to bring or file a complaint, charge, lawsuit or other proceeding of any kind against the Company or any person or entity released by this Agreement.15 PX 1751; TT 796-798. Weisselberg affirmed that he understood that under the terms of the separation agreement, he was not permitted to cooperate voluntarily with any law enforcement agency adverse to the Trump Organization, including the Attorney General’s Office. TT 1193- 1195. 14 As discussed infra, 40 Wall Street never reached a net operating income of $26.2 million, but, instead, ran a deficit as high as -$20.9 million through 2015. PX 636, 652. 15 Although not before this Court, such provision would almost certainly be unenforceable as against public policy, to the extent that it restricts full and truthful cooperation with legal investigations and actions. Denson v Donald J. Trump for President, Inc., 530 F Supp 3d 412, 437 (SDNY 2021) (Trump campaign’s non-disclosure and non-disparagement provisions are invalid and unenforceable as against public policy). 28 of 92 Page 28 of 92 [* 28] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 Donald Trump, Jr. Donald Trump, Jr. started his employment at the Trump Organization in 2001. TT 3160, 3976. Early in his tenure, he worked as a project manager at Trump Park Avenue, where he did a “[l]ittle bit of everything; design, construction, overseeing some of the banking relationships we had, anything and everything.” TT 3161-3162. Trump, Jr. affirmed that, at the time, he knew about the impact of rent stabilization laws on development at Trump Park Avenue, and he was aware of the limitations imposed by that law. TT 3162. Trump, Jr. also served as project manager for Trump Chicago, working on “everything from design, architecture, sales and marketing, finance, construction… [y]ou name it.” TT 3162-3163. Since at least 2011, Trump, Jr. has served as an executive vice-president of the Trump Organization, reporting to his father, until Donald Trump assumed the presidency in January 2017. TT 3164, 3167. After that, Trump, Jr. and Eric Trump served as co-chief executive officers of the Trump Organization and, collectively, with Allen Weisselberg, had “ultimate authority over decisions made at the Trump Organization.” TT 3164-3170. TT 3286-3288. In addition to their role as co-CEOs of the Trump Organization, beginning in January 2017, Trump, Jr. and Eric Trump were also presidents, directors, executive vice presidents, and/or chairmen of various Trump Organization entities. PX 1329 at 13-25. Also in January 2017, Trump, Jr. and Weisselberg became trustees of the Donald J. Trump Revocable Trust, which Trump, Jr. understood to be “the trust that governed all of my father’s assets[,] especially while he was president.” TT 3170, 3179, PX 769. When examined about his knowledge of Allen Weisselberg’s departure from the Trump Organization, Trump, Jr. testified that Weisselberg was terminated from his role as trustee because of his criminal indictment, but that he was not terminated from his employment at the helm of the Trump Organization for that reason. TT 3170-3172. Trump, Jr. then testified that he does not know the details of how or why Weisselberg ended his employment relationship with the Trump Organization, which this Court finds entirely unbelievable. TT 3172-3173. On January 20, 2021, Donald Trump re-appointed himself as a trustee of the Donald J. Trump Revocable Trust and removed Trump, Jr., while leaving Weisselberg as a “business trustee.” PX 1016; TT 3185-3186. After Weisselberg was terminated from his role as trustee in June of 2021, Trump, Jr. was re-appointed trustee on July 7, 2021. Apparently,16 Trump, Jr. remains the sole trustee of the Donald J. Trump Revocable Trust. TT 3181-3185, 3190-3191; PX 1015, 1016. In early 2016, at the request of “one of the three children” (referring to Donald Trump’s three adult children), Patrick Birney created and distributed to Eric Trump, Ivanka Trump, and Trump, Jr. a “Trump Organization Operating Financial Summary 2015” to keep them informed of the performance of the business, in anticipation of taking over. PX 1293; TT 1181-1186. Trump, Jr. and Eric Trump were continuously kept apprised of the operating financials by Weisselberg. TT 3270-3273; PX 1454. In January 2017, Trump, Jr., along with Eric Trump, took over responsibility for running the Trump Organization. TT 3982-3983. 16 When asked if he was aware if his father, Donald Trump, is serving as a current trustee of the Donald J. Trump Revocable Trust, Trump, Jr. testified “I don’t recall.” TT 3191. 29 of 92 Page 29 of 92 [* 29] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 In March 2017, Trump, Jr. and Eric Trump were given power of attorney over certain of their father’s real estate and banking relationships. PX 1330; TT 3174-3177. The power of attorney explicitly states “[t]he authority granted hereunder is solely with respect to the execution and delivery of certifications and similar documentation (including, without limitation, compliance certificates) in connection with existing financings in which Donald J. Trump is guarantor.” PX 1330; TT 3177-3178, 3433-3434. Trump, Jr. stated that his father had no role in decision-making at the Trump Organization between January 20, 2017 and January 20, 2021, but that he resumed “some” decision-making after January 20, 2021, choosing certain activities in which to get involved. TT 3173-3174, 3984. From January 2017 through 2021, Trump, Jr. and Weisselberg, as trustees of the Donald J. Trump Revocable Trust, were responsible for the preparation and fair presentation of the SFCs. See, e.g., PX 756; TT 961-963. Trump, Jr. acknowledged that as a trustee, he was subject to fiduciary responsibilities. In his capacity as trustee, Trump, Jr. certified that he was “responsible for the accompanying statement of financial condition … and the related notes to the financial statement in accordance with accounting principles generally accepted in the United States of America.” See, e.g., PX 756. He did this every year from 2017 to 2021 despite having no knowledge of the requirements of GAAP, never having been employed in a position that required him to apply GAAP, and never having received any training on applying GAAP. TT 3155-3156. In his capacity as trustee, Trump, Jr. also certified that the values of assets contained in the SFCs were “estimated current values.” See, e.g., PX 756. On March 3, 2017, Alan Garten, chief legal officer for the Trump Organization, forwarded Trump, Jr. an email from Forbes that, inter alia, questioned the claimed size of Donald Trump’s Trump Tower Triplex and cited that property records indicated it was only 10,996 square feet. PX 1344. Trump, Jr. acknowledged receiving the email, and he responded that same day with: “Insane amount of stuff there.” PX 1344. Notwithstanding, four days later, on March 10, 2017, Trump, Jr., along with Weisselberg, signed a Management Representation Letter to Mazars in which they represented the value of the Triplex based on the false assumption that it was 30,000 square feet. PX 741; TT 3231-3234. Trump, Jr. testified that he could not recall if he did any fact checking or “anything” in response to the Forbes inquiry, despite specifically affirming the following representations in the Management Representation Letter: (2) We have made available to you all financial records and related data, and any additional information you requested from us for the purpose of the compilation. We have not knowingly withheld from you any financial records or related data that in our judgment would be relevant to your compilation. … 30 of 92 Page 30 of 92 [* 30] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 (4) We acknowledge and have fulfilled our responsibility for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the personal financial statement that is free from material misstatement, whether due to fraud or error. (5) We acknowledge our responsibility for designing, implementing, and maintaining internal control to prevent and detect fraud. (6) We have no knowledge of any allegations of fraud, or suspected fraud, affecting us that could have a material effect on the personal financial statement. PX 741; TT 3231-3234. When asked on whom he relied to assure himself that making the representations in the Management Representation Letter was appropriate, Trump, Jr. testified: “I don’t recall who I relied on.” TT 3236. Yet, when he signed the certifications, Trump, Jr. “intended for the bank to rely upon [them].” TT 3241, 3250. Trump, Jr. signed certifications verifying the accuracy of the SFCs submitted to Deutsche Bank in 2017, 2018 and 2019. See, e.g., PX 1386, 393; TT 3238-3239. While disclaiming responsibility for the SFCs contents, Trump, Jr. testified that he “would have sat with the relevant parties,” which he identified as Weisselberg, McConney, and Bender, to discuss the SFCs. TT 3238-3241. Trump, Jr. also certified to Mazars that there were no significant changes in Donald Trump’s net worth in 2017 and 2018, upon which Mazars relied in issuing the No MAC letters to NYC Parks to fulfill Donald Trump’s obligations under the Ferry Point contract. PX 3280, 3285. In 2023, Trump, Jr. approved the sale and assignment of the Ferry Point contract to Bally’s for $60 million, with an additional $115 million to be paid to the Trump Organization should Bally’s obtain a gaming license for the site. PX 3304, 3305, 3306; TT 3261-3268. Despite disclaiming responsibility for or knowledge of the SFCs contents, Trump, Jr. still insisted that the SFCs were “materially accurate.” TT 3275-3276. Trump, Jr. mistakenly testified that Mark Hawthorn is the current chief financial officer (“CFO”) of the Trump Organization, claiming that he replaced Allen Weisselberg. TT 3282-3283, 3987. However, the CFO position has remained unfilled since Allen Weisselberg departed the Trump Organization. TT 5245-5248. Eric Trump Eric Trump joined the Trump Organization right after college in 2006. TT 3285. From the time he became an executive vice president in 2014, until Donald Trump assumed the presidency in January 2017, the hierarchy of the Trump Organization was like a pyramid, with Donald Trump at the top. TT 3286. During this period, Eric Trump reported directly to his father. TT 3287. 31 of 92 Page 31 of 92 [* 31] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 In early 2016, at the request of “one of the three children” 17 (referring to Donald Trump’s three adult children), Patrick Birney created and distributed to Eric Trump, Ivanka Trump, and Donald Trump, Jr. a “Trump Organization Operating Financial Summary 2015” to keep them informed of the performance of the business. PX 1293; TT 1181-1186. Allen Weisselberg affirmed that he was directed to advise Eric, Ivanka, and Trump, Jr. of the performance of the business “as Mr. Trump had now become president,” “[t]hey wanted to be knowledgeable about the running of the business… [s]o [in] 2016, he was in the process of running for president and they wanted to get up to speed on how the business was operating.” TT 1185-1186. Beginning in January 2017, Eric Trump, Trump, Jr. and Weisselberg ran the day-to-day operations of the Trump Organization. TT 3288. Eric Trump confirmed that beginning in January 2017, he did not report to anyone, although he confirmed that post-presidency, he resumed following his father’s directives. TT 3289. Eric Trump became involved in the Seven Springs project in 2012. TT 3289-3290. He testified that “I never had anything to do with the Statement of Financial Condition.” TT 3292. However, McConney’s supporting spreadsheets from 2012-2014 indicate that he relied on Eric Trump for the valuations of Seven Springs, which were inflated to $161 million for the undeveloped seven mansions, far more than the $21 million appraised value, of which Eric Trump was aware. PX 793, 708, 719. Eric Trump’s credibility was severely damaged when he repeatedly denied knowing that his father ever even compiled an SFC that valued his assets and showed his net worth “until this case came into fruition.” Upon being confronted with copious documentary evidence conclusively demonstrating otherwise, he finally conceded that, at least as early as August 20, 2013, he knew about his father’s SFCs (begrudgingly acknowledging: “It appears that way, yes”). TT 3292- 3294, 3300-3304, 3307-3316, 3319-3336; PX 1071, 1079, 1112, 1113, 1075, 3333, 1091, 1265, 3332. Moreover, emails indicate that contrary to Eric Trump’s testimony, McConney relied on Eric Trump for the $161 million valuation of the undeveloped seven-mansion plot at Seven Springs, from 2012-2014. PX 1075. In particular, an August 20, 2013 email from Jeff McConney to Eric Trump, with the subject “Seven Springs,” reads: “Hi Eric, I’m working on your Dads [sic] annual financial statement. I need to value Seven Springs. Attached please find how we valued it last year. Can you let me know when you have time to talk about this year’s valuation? Thanks Jeff.” PX 1075. When the documentary evidence against him became overwhelming, Eric Trump reversed his previous testimony: Q. It is correct that when you received this e-mail in August of 2013, you understood that your father had an annual 17 After much obfuscation on the stand, initially testifying that he could not recall who asked Birney to put together the 2015 operating financial summary, Weisselberg ultimately conceded that it was “one of the three children” but could not “recall which child it was.” TT 1184-1185. 32 of 92 Page 32 of 92 [* 32] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 financial statement and you understood that Mr. McConney was asking you for information specifically to assist him in working on the notes to the annual financial statement; isn’t that correct? A. Yes. TT 3325, 3339. Although Eric Trump advised McConney in August 2013 to continue to use the $161 million value for the proposed seven-mansion development at Seven Springs, emails demonstrate that Eric Trump was aware of a valuation by a professional appraiser, engaged by the Trump Organization, who valued the hypothetical development at approximately $5.5 million. PX 908, 3296; TT 3342-3349. By September 8, 2014, a mere four days before Eric Trump advised McConney to continue using $161 million as the value for the seven-mansion development in the 2014 SFC, David McArdle of Cushman & Wakefield had completed an appraisal for the property and delivered a verbal estimate to Eric Trump of $14 million. PX 169, 181, 3331; TT 3349-3354. Eric Trump’s testimony that he had very limited involvement in the appraisal work that McArdle performed on Seven Springs and Briarcliff was shown to be false when he was confronted with the ample contemporaneous documentary evidence demonstrating otherwise. PX 133, 1074, 3206, 3327, 3207, 3189, 3190, 3328, 3195, 3196, 3204, 3202, 3201; TT 3360-3364, 3367-3381, 3383-3385, 3427-3432. He unconvincingly tried to distance himself from this evidence, asserting that he was not focused on it because, “I am a construction guy.” TT 3385. Despite retaining McArdle in August 2013 to value the proposed 71-units at Briarcliff, and receiving a professional appraised value of $45 million, Eric Trump directed McConney to value the proposed units at over $101 million in the 2014-2018 SFCs. PX 719, 742, 758, 843; TT 3378-3379. In 2020, Eric Trump, as attorney-in-fact for his father, signed three certifications based on the SFCs and sent to Deutsche Bank to satisfy obligations for the Trump Chicago, Doral, and Old Post Office loans. PX 518. TT 3434-3438. In 2021, again as attorney-in-fact for his father, Eric Trump signed two certifications based on that year’s SFC, and sent them to Deutsche Bank to satisfy obligations under the Doral and Old Post Office loans. PX 517; TT 3438-3442. When questioned about his knowledge and involvement in valuing Mar-a-Lago, Eric Trump adamantly maintained that it was appropriate to value Mar-a-Lago as a private residence, even though it was being taxed as a commercial club and the deed prohibited, in perpetuity, use of it as anything other than a social club. TT 3445-3451; PX 1013. When confronted with Patrick Birney’s testimony that Eric Trump and Trump, Jr. participated in a video conference call in fall 2021 to discuss the preparation of the 2021 SFC, Eric Trump acknowledged that he would have “no reason to doubt Pat.” TT 3385-3391. 33 of 92 Page 33 of 92 [* 33] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 Eric Trump, on behalf of the Trump Organization, signed Allen Weisselberg’s separation agreement, in which, in exchange for $2 million in installment payments, Allen Weisselberg agreed, inter alia, not to disparage or criticize the Trump Organization or its current or former employees, and not to cooperate voluntarily with law enforcement or anyone with adverse legal claims to the Trump Organization unless compelled to by a court. PX 1751; TT 3451-3457. Eric Trump took responsibility for negotiating the terms of the separation agreement. TT 3457. Donald Trump Donald Trump is the beneficial owner of the collection of companies branded as “the Trump Organization.” TT 3472. From May 1, 1981 through January 19, 2017, he was its Director, President, and Chairman. TT 3472. He is also the sole beneficiary of the Donald J. Trump Revocable Trust, under which all Trump Organization assets are held. TT 3472. After he assumed the presidency in 2017, Donald Trump appointed Donald Trump, Jr. and Allen Weisselberg as the trustees of the trust. TT 3474. When he left the White House in 2021, Donald Trump re-appointed himself as the sole trustee of the trust, stating that “I figured that I would be back in the business world for a little while… So, I figured that I would be back in business, I might as well be the Trustee.” TT 3475. However, on July 7, 2021, Donald Trump once again removed himself as trustee, stating that “I think we were at a position where I was gaining more and more confidence in my family in terms of business.” PX 1720; TT 3475-3476. He re-appointed Trump, Jr. and Weisselberg as trustees. TT 3476- 3477. Donald Trump testified that Weisselberg and McConney were responsible for maintaining complete and accurate books and records of the Trump Organization. TT 3617. Donald Trump confirmed that Weisselberg and McConney prepared the supporting data on which the SFCs were based before coming to him for final review. TT 3491. Donald Trump acknowledged that he reviewed the SFCs each year from 2011 to 2017 before they became final, further adding that “I would see them. And I would maybe, on occasion, have some suggestions.” TT 3478, 3513. He recalled that on specific occasions Weisselberg and McConney asked his opinion about the valuations of 40 Wall Street, Seven Springs, and his limited partnership with Vornado. TT 3495- 3496; 3519-3522; PX 3344. Donald Trump also acknowledged that, as he certified to Mazars in the Management Representation Letters, he was responsible for the preparation and fair presentation of financial statements. PX 730; TT 3481-3482, 3564-3568. He understood that Deutsche Bank would rely on his certifications to determine if he was complying with his loan covenants. TT 3620-3623, 3630. Donald Trump insisted that the values within the SFCs were not only not fraudulently inflated, as this Court has already found, but that, if anything, they were deflated, as the following exchange with OAG demonstrates: 34 of 92 Page 34 of 92 [* 34] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 Q. In light of your expertise in real estate, do you recall ever thinking that the values were off in your Statements of Financial Condition? A. Yeah, on occasion. Q. What were some of those occasions? A. Both high and low; both high and low. Q. Which occasions do you recall? A. I thought that Mar-a-Lago was very underestimated, but I didn’t do anything about it. I just left it be. It didn’t matter, I didn’t care, because the numbers you are talking about here is, you know, they are very big numbers, very, very big. Far bigger – the values are far bigger than what is on the financial statement. I thought Mar-a-Lago was underestimated. I thought 40 Wall Street was very underestimated because that building has tremendous value. I thought that there were numerous other things. I thought Doral was very underestimated. I thought it was considerably more valuable. Not necessarily [its] golf courses, but it is right in the middle of Miami, right next to the airport. I would say you could build thousands of units and hotels on the site. So you don’t look at it as a golf course. It is a great golf course, very successful, four of them, four courses. One was sold. It was five. One was sold that was a little disconnected, and [I] sold it. But I thought Doral was very underestimated. … Q. [I]f anything, do you think the statement undervalued your assets; is that correct? A. Yes, by a lot. The financial statements. TT 3487-3488, 3495. When asked about his limited partnership interest in Vornado, and specifically, whether he had control over the assets, Donald Trump equivocated several times, extolling the virtues of his limited partnership, before ultimately conceding: “In the true sense, no.” TT 3518-3519. When examined about the valuation of Mar-a-Lago, Donald Trump did not recall having any specific conversations with Weisselberg or McConney about valuing it as a private residence, although he conceded that it was valued on the SFCs as if it could be sold as a private residence. 35 of 92 Page 35 of 92 [* 35] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 TT 3527-3530. When confronted with the 2002 deed18 in which he signed away, in perpetuity, the right to use or develop Mar-a-Lago as anything other than as a social club, in exchange for a conservation easement tax benefit, he offered that “when you say, ‘intend,’ intend doesn’t mean we will do it.” PX 1730; TT 3533-3535. Nonetheless, Donald Trump insisted that he believed Mar-a-Lago is worth “between a billion and a billion five” today, which would require not only valuing it as a private residence, which the deed prohibits,19 but as more than the most expensive private residence listed in the country by approximately 400%.20 TT 3530. When questioned about Aberdeen, and whether he was aware that the SFCs for 2014-2018 valued the property as if the Trump Organization could build 2500 year-round private residences (when in fact, they had received permission to build only 500), Donald Trump testified: “I don’t know, but it could very well be. It’s sort of like a painting. You could do pretty much what you want to do. The land is there. You could do what you want to do. So you could do either one of them, actually.” TT 3539-3547. When confronted with evidence that, in 2014, the Trump Organization had submitted a statement to UK regulators stating that the Trump Organization did not intend to develop the Aberdeen property any further because of Donald Trump’s opposition to wind farms, Trump testified: “At some point that will be developed into a magnificent job. I just don’t want to do it now.” TT 3547-3549. Notwithstanding the foregoing, the 2014-2018 SFCs valued Aberdeen not only as if Donald Trump had permission to develop 2500 private year-round residences, which he did not, but also as if those residences had already been built, and the SFCs and supporting data failed to account for any development costs associated with making the hypothetical residences a reality. PX 719, 731, 742, 758, 774. When questioned about whether he had ever inflated the value of 40 Wall Street, Donald Trump was confronted with a Forbes article, including a published audio recording, dated September 21, 2022, that reported that Trump had told Forbes in 2015 that 40 Wall Street was 72 stories tall, when in fact, it is only 63, resulting in an overvaluation of $50 million. The article also reported that Donald Trump told Forbes that 40 Wall Street had a net operating income of $64 million in 2015, when in fact, the building ran a deficit21 of more than $8.7 million for the 12-month period ending on March 31, 2015. TT 3568-3576; PX 652, 636. When asked if he was misquoted in the Forbes article, Donald Trump replied “I don’t know. I don’t know what I said.” TT 3571. 18 See further discussion of Mar-a-Lago infra. 19 A fact of which he is well aware, having signed the deed himself. 20 According to a CNBC report, as of January 7, 2022, the most expensive private family residence listing in the United States was $295 million, for a newly developed 105,000 square foot mega-mansion in Los Angeles, California. https://www.cnbc.com/2022/01/07/most-expensive-home-in-america-lists-for-295- million-may-head-to-auction.html. 21 40 Wall Street also ran net operating deficits in 2013 and 2012 ranging from -$7.3 million to -$20.9 million. TT 3577-3579. 36 of 92 Page 36 of 92 [* 36] 452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs. FILED: NEW YORK COUNTY CLERK 02/16/2024 03:24 PM INDEX NO. 452564/2022 NYSCEF DOC. NO. 1688 RECEIVED NYSCEF: 02/16/2024 When asked if he still approved of the work that McConney and Weisselberg did in preparing the SFCs from 2011-2017, Donald Trump testified: “As far as I know I do. You haven’t shown me anything that would change my mind.” TT 3551. Donald Trump stated he was not involved in the preparation of the 2021 SFC, and that it would have been prepared by Weisselberg, McConney, Trump, Jr., and Eric Trump. TT 3523. Donald Trump was aware that receiving loans from the Deutsche Bank Private Wealth Management Division required him: to provide a personal guarantee; to maintain a minimum net worth of $2.5 billion; to maintain unencumbered liquidity of $50 million at all times; and to submit annual SFCs to Deutsche Bank, so that Deutsche Bank could test his compliance with the loan covenants. TT 3586-3601, 3604-3614; PX 426, 312, 307, 1844, 309, 394, 503. When Donald Trump sold the Old Post Office hotel, he paid off the Deutsche Bank loan, and the following profits were distributed: $126,828,600 to Donald Trump; $4,013,024 to Eric Trump; $4,013,024 to Donald Trump, Jr., and $4,013,024 to Ivanka Trump. PX 1373, TT 3624-3626. When questioned about Weisselberg’s guilty plea to tax fraud in connection with his employment at the Trump Organization, Donald Trump challenged that Weisselberg had committed any wrongdoing (to which Weisselberg admitted), saying “I mean is there something wrong… I mean IBM executives get apartments that are compensated by IBM. And lots of other companies do. But people that work for me can’t be so compensated? I don’t know, I don’t think that’s a big thing. Is it?”22 TT 3632-3634. Overall, Donald Trump rarely responded to the questions asked, and he frequently interjected long, irrelevant speeches on issues far beyond the scope of the trial. His refusal to answer the questions directly, or in some cases, at all, severely compromised his credibility. The Party Witnesses Donna Kidder Donna Kidder joined the Trump Organization in 2007 as a senior accountant and currently serves as Assistant Controller. TT 1491-1492. Since at least 2008, she has overseen preparing spreadsheets illustrating the cash positions of each Trump Organization entity for the purpose of enabling Allen Weisselberg to provide Donald Trump with weekly updates.23 TT 1513-1515. From 2011-2021, Kidder also prepared, in consultation with Weisselberg and Matthew Calamari (another Trump Organization employee), budget projections for 40 Wall Street and Trump Tower that were then incorporated into financial statements sent to third parties. TT 1520-1524; 22 The record does not reflect whether IBM executives pay taxes on their perks. 23 Kidder confirmed that the practice was the same after Donald Trump became president, except the repor [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9942359. Public record. Not legal advice.