What to know about Day 3 of Trump's fraud trial
- This is the third day of New York Attorney General Letitia James' $250 million civil fraud trial against former President Donald Trump, two of his adult children and the family's company.
- Trump was admonished yesterday by Judge Arthur Engoron after he attacked one of his clerks on social media.
- The former president's attorneys filed a notice of appeal of the judge's ruling last week that Trump had committed "persistent fraud."
- During the cross-examination this morning, Trump's lawyers sought to damage the credibility of his former accountant, Donald Bender, who admitted that he did not dispute property valuations that the attorney general's office has alleged were inflated.
- A second accountant, Camron Harris, argued in the afternoon that the Trumps and their company, the Trump Organization, are responsible for their own financial statements.
- Here are highlights from Day 2.
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Court is over for the day.
The defense will continue cross-examination of Bender tomorrow. There is back and forth between the clerk and the defense on how much longer for Bender. A lawyer for Trump said it could go into much of the day tomorrow.
Jeff McConney, a top executive at the Trump Organization who is expected as the next witness, will be ready tomorrow in case cross-examination of Bender ends earlier than expected.
Second accountant argues Trumps are responsible for financial statements
The roles of Donald Trump Jr. and Eric Trump, who signed the representation letter and the engagement letter for the 2021 compilation of Trump’s statements of financial condition, emerged as a big theme this afternoon.
In the Bender years, Allen Weisselberg, the former chief financial officer of the Trump Organization, largely played that role, but by 2021, the responsibility for retaining and managing the accounting relationship seems to have shifted to the Trump sons.
Camron Harris, an accountant of Whitley Penn, took the stand as the second witness today. He argued that the Trump Organization and the Trump sons are responsible for the company's financial statements.
Harris said he was responsible for compiling and checking the documents for obvious errors but the clients are ultimately in charge of preparing the information.
Judge wishes AG lawyer a happy birthday
The judge took a moment to wish Kevin Wallace, the lead lawyer on the AG's case, a happy birthday, calling it a very important day.
The judge's announcement was met with cheers and loud clapping from James in the courtroom, and some groans in the overflow room being used by reporters.
"Thank you, judge. This is a living nightmare for me," Wallace replied.
The birthday wishes came after Trump, who's accused the judge of doing the AG's bidding, had left for the day.
Engoron is aware of Trump lawyer Chris Kise's birthday as well and because it falls on the eve of Christmas eve, he has joked several times that he wants the trial to be done by then.
Accountant talks about Eric Trump, who is still in the room
Eric Trump has come up for the first time in testimony. Harris is saying that Eric Trump was a member of the executive leadership who set “the tone at the top” and that he had no interactions with the president's son regarding the statements of financial condition. Their first meeting took place after the 2021 statement was issued.
Although the former president left the courthouse, his son stayed.
Eric Trump sat in the front row, shaking his head suggesting he doesn’t agree with Harris' descriptions of his role.
Another Trump accountant testifies
As we return from the lunch break to a courtroom devoid of Trump, Engoron has allowed an interruption to Bender’s testimony to accommodate Camron Harris, the partner at Whitley Penn who handled Trump’s accounting work after Mazars resigned in 2020.
Harris is now discussing the role of Jeff McConney, the Trump Org. comptroller, in their engagement to compile the statements of financial condition.
As the AG did with Bender, they are reviewing specific language from Whitley Penn’s written description of the process. He says they went through the 2020 statement of financial condition to understand how to obtain information and their process.
Harris discussed Whitley Penn’s internal “program” for compiling statements of financial condition, which appears to be a guide to how to handle compilations. “We do not verify any of the accuracy of the information provided,” which distinguishes a compilation from a review or an audit. It does not include, for example, analytics or inquiries of management, much less verification of work papers.
He is essentially limiting the scope of their work, as Bender did.
Trial resumes without Trump
The trial has resumed without the former president, who left the courtroom at the break. The mood in the courtroom is considerably lighter now that Trump is no longer here.
James calls Trump's attendance a 'fundraising stop'
James blasted the former president on her way into the courtroom for the afternoon's testimony, calling his appearance at the trial a "political stunt" and a "fundraising stop."
"The Donald Trump show is over," she said, calling his comments "offensive and baseless" and devoid of facts and evidence while not specifying which remarks she was referring to. Trump has repeatedly called the AG "corrupt" and her civil charges against him baseless during his two and a half days at the courthouse. Trump departed the courthouse this afternoon after the morning's proceedings.
Minutes earlier, Trump had sent out a fundraising email that started, “I just left the courthouse for the day for my unjust trial in New York.”
James said Trump had "fomented violence" and made "race-baiting" comments and "appeals to the bottom of our humanity."
"I will not be bullied," she said. "Justice will be served."
This is just a test
The test of the National Wireless Emergency Alert system is blaring on everyone's phones in the courtroom.
Trump blasts judge, legal system before leaving courthouse
As Trump left the courthouse after attending the civil fraud trial against him and his company, he bashed the judge, the state attorney general and the legal system.
"I’m here, stuck here," an angry Trump complained before leaving. "I'd rather be right now in Iowa, I’d rather be in New Hampshire or South Carolina or Ohio or a lot of other places, but I’m stuck here because I have a corrupt attorney general," he fumed before leaving in a motorcade.
The former president, who had no legal obligation to attend the trial, said he'd done so since Monday because he wanted to point out "how corrupt it is."
Referring to the summary judgment order where the judge found that Trump’s financial statements contained fraudulent valuations, Trump said, “they defrauded us because he called me a fraud.”
He also attacked the judge, saying he's "run by the Democrats" and "already knows what he's going to do." "Our whole system is corrupt," he said, adding that Engoron came out of "the clubhouse."
Engoron came to the bench through the neighborhood-specific Democratic clubs that have a disproportionate role in who runs for elected office (and especially lower-tier offices) in NY.
Yesterday, we met a trial observer who told us that he is a professional musician and a friend of Engoron. He said they knew each other through their club, which is now known as Westside Democrats. Of course, that doesn’t mean Engoron is unqualified, biased, or wrong.
Trial adjourns for lunch with Trump still in the courtroom
Engoron adjourned the trial for lunch, but then held a closed door sidebar in the courtroom that included the former president.
The trial is scheduled to resume at 2:15 p.m. ET with the continuation of Bender's testimony.
‘This is ridiculous’: Judge and Trump lawyers spar over the accountant
Engoron and Trump's lawyers engaged in a heated back and forth about Bender’s inconsistent testimony.
“Mr. Bender is not on trial here. Someone else is,” Engoron said, prompting Kise and Habba to jump up to disagree.
Kise told Engoron that Bender’s credibility is very much on trial. Engoron pushed back, telling Kise, “You’re not allowed to waste time.” Habba then accused Bender of being evasive and “having no memory as we sit here.”
“The government brought a case accusing my client of a staggering fraud,” specific to year, "but now when it’s time for us to defend ourselves,” Engoron will not let them examine him on a year by year basis, Kise said, adding that he will attempt to streamline the case, but the devil’s in the details.
“This is ridiculous!” Engoron yelled. He lowered his voice, before saying “there’s no point” in asking Bender year by year.
Trump appeals judge's fraud ruling against him
As the trial in the AG's $250 million civil suit against Trump was being heard in one court, the former president's attorneys filed a notice of appeal of the judge's ruling that Trump had committed "persistent fraud" in another court.
The notice of appeal to the Appellate Division, the state's second highest court, said they were appealing "from each and every part" of the order that went against them.
In his decision last week, Engoron denied Trump's motion seeking to have the claims against him thrown out on statute of limitations issues, and granted partial summary judgment on some of the AG's claims, including that Trump and his company had made "persistent" false claims overstating the value of their assets in their financial statements.
Trump returns to the courtroom
Returning to the courtroom, Trump took a seat at the defense table between his lawyers Chris Kise and Alina Habba.
The former president continued to attack James in another post on Truth Social during the break. "Her papers are the Fraudulent ones, not mine, and she doesn’t have a DISCLAIMER CLAUSE. This case should never have been brought!!!" he wrote.
Defense will likely seize on accountant's admission that he did not object to valuations
Bender has now admitted that he neither disputed valuations of individual assets nor does he recall noticing any failure to disclose the methods used to value those assets, despite industry guidelines essentially obligating him to do so.
Bender’s failure to object to the valuation methodologies used by the Trump Organization and/or the disclosure of the same within the statements of financial condition likely will be a big theme for the defense. Their argument will be: “If the only CPA involved wasn’t troubled by these valuations, how could these statements and the subsequent use thereof in obtaining loans and insurance constitute violations of various New York penal statutes, all of which require proof of intent?”
That’s an argument with appeal on the face of it. And if a jury were here, the AG might struggle with the damage Suarez has done to Bender’s professionalism. But Bender’s failure to complain about the statements of financial condition and the valuation methods used therein do not mean those valuations and the statements in which they were presented were reasonable. It just shows that Bender (and, by extension, Mazars) were sloppy, if not financially beholden to their gravy train: the Trump Organization.
And while Mazars had access to raw data that banks and lenders did not, the employees and executives of the Trump Organization were not entirely honest with Mazars either. Indeed, so far, Bender and his co-workers seem to have been equal parts victims of and accomplices to the defendants’ alleged fraud. The AG now has to rehabilitate Bender’s credibility as a witness while conceding he was hardly a model accountant.
That’s a tough, “both/and” row to hoe — but it’s another reason why a bench trial favors the AG.
Court resumes without Trump
Trump left the courtroom after the judge called a 10-minute break. He did not say when he was coming back, but he did once again call the trial a "witch hunt," adding that he should be "entitled to a jury."
The proceedings have now resumed and Bender is back on the witness stand, continuing his testimony without Trump. James is still present at the trial.
Trump lawyer points out accountant's inconsistent testimony
Under question from Suarez, Bender said he "may" have consulted with specialists on the estimated current value of some Trump properties.
Suarez then played a bit from Bender's earlier deposition, in which he said he had not done so.
He then tried to get him to admit that discounted projections of cash flows from the use of an asset can be used in estimating its current value, and pressed him on the valuations of various Trump properties, including Trump Tower and Mar-a-Lago.
The questioning appeared designed to get Bender to admit that he was aware of the ways in which the Trump Organization assessed the value of various properties, but Bender didn't fully relent.
He said that he understood how the asset values were reached for a “significant portion” of the properties, especially because the notes to the statements of financial condition addressed some of the valuation methods, but he cannot recall today which he did or did not see or understand.
He also noted that he was not hired to do appraisals for Trump.
Bender testified yesterday that certain information had been withheld from him and his accounting firm, including the existence of certain appraisal reports.
What just unfolded in the courtroom was meaningful. Suarez got Bender to admit that he had access to all bases for valuing the real property assets in the statements of financial condition and that guidelines set forth by the American Institute of Certified Public Accountants require accountants engaged in compilation of financial statements to familiarize themselves with the bases for valuing the estimated current value of an asset — and if there is a disagreement, to either insist on a modification of the disclosure or in the worse case, withdraw.
Bender admitted, before the judge called for 10-minute break, that aside from a single disagreement about the value in Niketown, which, after consultation with the Trump Organization, it modified, he could not recall bringing any other disagreement to their attention, much less withdrawing.
Trump lawyer grills Bender about accounting work
Suarez is now cross-examining Bender about some accounting principles. This is a level of deep accounting weediness that Trump is nonetheless sitting through.
Trump's lawyers are trying to show — despite the Trump Organization’s written assertion that it, not Mazars, was responsible for the preparation of the statements in compliance with standardized accounting practices — that Bender should have known and should have guided Trump better.
They are also trying to establish, as Bender just agreed, that even under this particular standard, there is no one accepted way to estimate the current value of an asset to show that what Trump and his co-defendants did was not fraudulent, much less intentionally so.
Trump lawyer spars with his ex-accountant on the stand
Trump attorney Jesus Suarez is mixing it up with Bender on the witness stand.
After Bender testified that a correction on the size of Trump's triplex apartment was the work of the Trump Organization and not him, Suarez suggested that Bender was lying when he said a now-deceased accountant was his “relationship partner” at Mazars for all Trump work.
A relationship partner, in law and accounting firm parlance, is the person who might have originated the business relationship and might handle the bills, but is not necessarily the lead partner handling the work.
Suarez took Bender through a series of “engagement continuance forms” internal to his former accounting firm Mazars that listed Bender as the partner in charge. The judge seemed unimpressed, however, and suggested they move on.
Trump appears engaged with his soft-spoken former accountant's testimony and complained at one point he couldn't hear what Bender was saying. Bender then started speaking more clearly and closer to the microphone, often answering "I don't recall" to Suarez's questions.
Ex-Trump accountant Donald Bender is back on the stand.
Trump again slams trial as a ‘witch hunt’ before heading into courtroom
Speaking outside the courtroom before the trial started, Trump again decried it as a political hit job against him as he repeated his ongoing attacks against James, whom he accused of trying to interfere with his chances of another presidential term.
“This trial is a disgrace,” he said. “Never happened -- nothing like this has never happened before.”
Trump continued denying wrongdoing in the case and repeated his complaints about the lack of a jury in the trial.
“This is a witch hunt,” he said. “This is just a continuation of the witch hunt that started the day I came down the escalator in Trump Tower. And it’s a shame for our country.”
The former president also attacked the attorney general of New York in a post to Truth Social as he arrived at the courthouse.
“Just arrived at the Witch Hunt Trial taking place in the very badly failing (so sadly!) State of New York, where people and companies are fleeing by the thousands,” he wrote. “Corrupt Attorney General, Letitia James, is a big reason for this.”
Day 3 of the trial has started
The third day of Trump’s fraud trial has begun.
Engoron enters and takes the bench. After the bailiff yells orders, Engoron says, "If this was Broadway, we would have a long run."
Trump enters the courtroom
Trump has entered the courtroom with his son Eric Trump. He’s wearing the usual blue suit, white shirt and red tie. Lawyers Alina Habba and Chris Kise are standing near him chatting.
Officers in the hallway are yelling at reporters to quiet down. Eric Trump steps up to confer with attorneys before joining his father again.
Some issues to work out before trial starts
When we ended court yesterday, reporters were asked to leave the room while all parties remained. Several reporters were very upset and were shouting at the judge about transparency and the lack of it as we were asked to exit the room. We are expected to take care of some housekeeping issues this morning before resuming cross-examination of Trump’s longtime accountant Donald Bender.
Trump and James arrive at the courthouse
Trump and James arrived at the courthouse shortly before 9:30 a.m. ET.
Proceedings are expected to begin around 10 a.m. ET.
Trump gripes trial is 'unfair' after judge's gag order
Hours after the trial wrapped up yesterday, Trump aired his grievances in a post on his Truth Social platform, saying the trial is “unfair” and again suggesting it was an attempt to interfere with his presidential campaign.
“It is so unfair that I am being tried under Section 63(12), which is unconstitutionally being used to punish me because I am substantially leading Crooked Joe Biden in the polls,” he said. “It is a Consumer Protection Statute, and not meant, at all, for Election Interference purposes, which is what this is all about!”
Trump also complained about the lack of a jury in the trial after his legal team disputed James’ claim that it never requested one. James’ office told NBC News that Trump’s lawyers never asked for a jury trial, but they likely they wouldn’t have received one even if they did.
Trump’s post came hours after Engoron issued a gag order barring defendants from discussing members of his staff after the former president attacked one of his law clerks on social media, a post that Engoron ordered him to delete.
Two Trump accountants expected to testify today
Donald Bender, who was Trump's longtime accountant, is expected to be back on the witness stand today as the former president's attorneys continue their cross-examination of the attorney general's first witness in the case.
Lawyers for the AG said in court yesterday that they might seek some additional questioning of Bender when Trump's team is done with its cross-examination.
After Bender finishes his testimony, the AG's office is expected to call Camron Harris, who works for Whitley Penn, the accounting firm that succeeded Bender's firm as Trump's accountants.
If Harris' testimony wraps up on the same day it starts, he would be followed by Jeffrey McConney, a senior vice president at the Trump Organization, who's also a named defendant in the $250 million lawsuit against Trump, his adult sons and his company.
He'll be back: Trump said he will attend today's trial
Trump is expected to attend Day 3 of the civil fraud trial, after initially indicating he'd only be there in person for the first two days.
“It’s been a very good day,” he said while leaving court yesterday. “I’ll be back tomorrow.”
The former president's aides initially said he would leave court during the lunch break on Day 2, and then head back to Florida the following day. Instead, Trump wound up staying the entire day before announcing he'd return for today's proceedings, presumably because he wants to watch his lawyers continue their cross-examination of his longtime former accountant Donald Bender.
Trump appeared agitated at times watching Bender's direct testimony on the first day of the trial.
What happened on Day 2
Trump attended the first two days of the trial, and wound up getting hit with a gag order yesterday after posting a picture of Engoron's law clerk with Senate Majority Leader Chuck Schumer on social media and insinuating they had a personal relationship.
“Personal attacks on members of my court staff are unacceptable, inappropriate and I won’t tolerate it,” Engoron said, issuing a gag order “on all parties with respect to posting or publicly speaking about any member of my staff.” He warned that any violations would be met with swift sanctions.
On the witness stand yesterday was Trump's longtime accountant Donald Bender, who told lawyers from the New York Attorney General's Office that he compiled Trump's financial statements using information from Trump and his company, and that he later found they'd failed to hand over some important documents.
Under cross-examination from Trump's lawyer, Bender acknowledged that he had accounting expertise that Trump's financial team did not, and that he was responsible for making sure everything was submitted correctly.