Donald Trump To Challenge Judge Engoron’s Fraud Definition

Donald Trump is to challenge Judge Arthur Engoron’s definition of fraud that led to a $355 million judgment in the former president’s New York trial.

“The case raises serious legal and constitutional questions regarding ‘fraud’ claims/findings without any actual fraud,” Chris Kise, Trump’s principal lawyer in the case, told Newsweek.

Asked about the timing of the appeal, Kise said it “will depend on many factors so it’s hard to say at the moment, but in any event, it will fall within the 30-day clock” that is allowed by the court.

Kise accused New York Attorney General Letitia James and Judge Engoron of trying to run Trump out of New York and said it was bad for the city.

James sued Trump, his two adult sons, Donald Jr. and Eric, The Trump Organization and two firm executives, Allen Weisselberg and Jeff McConney, in September 2022. Engoron, who oversaw the trial, found that Trump inflated his assets to get more favorable business loans. Late last year, continuing into early January, a trial was held to determine how much the former president and his associates would pay in damages.

On February 16, Engoron ruled that Trump will have to pay roughly $355 million in penalties. Trump, Weisselberg and McConney will also be barred from serving as an officer or director of any New York corporation or other legal entity in the state for three years. Donald Trump Jr. and Eric Trump were ordered to each pay more than $4 million and were banned from doing business in the state for two years.

Trump, the current GOP frontrunner in the 2024 presidential election, has maintained his innocence in the case and claimed it was politically motivated.

The appeal hinges on the definition of fraud used in the case.

Professor Greg Germain of Syracuse University of Law told Newsweek that on appeal, Trump will have to show that the New York attorney general does not have the power to punish him “without showing the traditional elements of fraud: (1) scienter—basically intent to defraud, (2) false statements of fact rather than opinion or trade puffing, (3) reasonable reliance by the victims, (4) materiality, (5) causation, and (6) damages.”

“I think he has a strong argument that when the attorney general seeks to punish for past use, rather than prevent future use, she would have to show all of the traditional elements of fraud,” he added.

However, James’ team will argue that, under New York executive order 63.12, which gives the attorney general her power to prosecute fraud, she doesn’t have to show that all six elements are present.

Executive order 63.12 was established in 1956 and provides the attorney general with broad authority to issue subpoenas and pursue civil fraud allegations with relatively low legal hurdles.

“Judge Engoron ruled in the summary judgment order that, under 63.12, the attorney general does not have to show any of those elements—a showing of falsity is enough,” Germain said.

He said that, had the court applied the full six-part definition of fraud, it would have found very little evidence that the banks had a “reasonable reliance” on Trump’s statements.

“The evidence of reasonable reliance [on Trump’s financial statements] by the ‘victims’ is very weak’ and may be grounds of appeal,” Germain said.

A banking official told the trial that he did not not solely rely on Trump’s statements when assessing a loan application and that the bank made its own calculations.