Shredding the Law to Get Donald Trump

Nothing has shocked me as much recently as the result of New York Attorney-General Letitia James’ prosecution of Donald Trump, following closely, as it did, on the absurd award of $83 million in damages for defamation to memory-challenged alleged sexual assault victim, E. Jean Carroll. 

If you’re not reporting for  the mainstream media, you know this is a politically motivated hit-job. In other words, an attack on the very essence of American democracy.  You know, the ultimate sin of which Trump stands accused.  The one for which he must be defeated later this year. James told us exactly that when she campaigned for election on a platform of getting Trump:

I will never be afraid to challenge this illegitimate president,” James said in a video during the campaign. “I believe that this president is incompetent. I believe that this president is ill-equipped to serve in the highest office of this land. And I believe that he is an embarrassment to all that we stand for.” She went on to say Trump should be indicted on criminal charges and charged with obstruction of justice.

So, even before she had any case, she was determined to pursue him, not because of any crime she may have suspected he committed but because in her eyes he was both an illegitimate president and incompetent. But, no doubt under the influence of Trump Derangement Syndrome, James would have been confident a fishing expedition would yield some dirt.  

There are many troubling aspects to this case.  The first is the staggering amount of the fine – US464 million.  And the second is that this matter was prosecuted as a civil fraud case.

New York, which reputedly has some of the toughest fraud legislation in the country, recognises two types of fraud – civil and criminal.  Here, from the website of East Coast Laws, is a short summary:

Fraud can be both a civil and criminal offense in New York. Civil fraud involves a breach of contract or a violation of a legal duty, resulting in harm to another party. The victim of civil fraud can sue the perpetrator and seek damages in court. Criminal fraud, on the other hand, involves intentionally deceiving someone for personal gain, which is a violation of the law. Criminal fraud is prosecuted by the government, and the penalties can include fines, imprisonment, and other criminal sanctions.

Which raises this question: why was Trump sued by the government in a civil suit?  According to the above, there would need to be a victim, and it would have to be that particular victim who instituted the proceedings. Why wasn’t a criminal prosecution instigated? Surely, that would suit the political agenda behind this case, because it would mean Trump could potentially go to jail.  The description above clearly classifies the case brought by James as criminal fraud.  She claims that Trump ‘intentionally deceived someone for personal gain’. Could it be that a criminal suit would require a higher standard of proof, would require indictment by a grand jury (entirely possible, I grant, in New York, a Democrat stronghold) and a jury trial?   Could James have reasoned that even the small chance a New York jury might acquit Trump was too big a risk when she could get a lay down misere result from a bench trial presided over by a Democrat judge?

What we know is that there is no victim.  No bank or lender has complained about being a victim of fraud.   I’m not aware of how things work in Wall Street, but from my modest experience, when you are negotiating a loan, the bank is interested in two things.  Primarily, do you have the ability to repay the loan?  And secondly, can you put up some form of security?  As far as security is concerned, the banks will not accept your valuation of property offered as security.  They will do their own valuation, as was reported in this case. Trump, who is no idiot, would have known that.  So, no not only no fraud, but also no intent to defraud.  And as to liquidity, once again the banks do their own due diligence.  Trump was obviously confident he could repay the loans, the banks were obviously confident Trump could repay the loans and, in fact, Trump did repay the loans, some of them before their due date. Everyone was happy until James came sniffing around.

If this were a genuine civil case, it would normally involve a claim for two types of damages – actual and punitive damages.  In this case, the actual damages amount to $0.00 yet the punitive damages amount to $464 million.   In what jurisdictional universe is this grotesque disparity conscionable?  Perhaps the US should be renamed the United States of Dystopia.

As noted above, in New York civil fraud involves a breach of contract or a violation of a legal duty resulting in harm to another party.  There was no harm to another party, so what sticks in the craw of Trump haters is that there was a financial advantage to Trump.  He made money.  As, presumably, did the banks.  Judge Engoron’s reasoning, reported by NBC, is illuminating:

In a ruling last week following a months-long trial, Engoron found Trump and his top executives had intentionally engaged in a massive and long-running scheme to improperly inflate his assets in financial statements so he could take advantage of favorable loan and insurances rates he wasn’t actually entitled to. The judge ordered him to pay what he found were the “ill-gotten gains” from his years-long fraud and also barred Trump “from serving as an officer or director of any New York corporation or other legal entity in New York for a period of three years,” including his namesake company.

Engoron cited the lack of remorse from Trump and his executives in his ruling, saying their “complete lack of contrition and remorse borders on pathological.

He found their “refusal to admit error — indeed, to continue it, according to the Independent Monitor — constrains this Court to conclude that they will engage in it going forward unless judicially restrained.

Trump has consistently maintained he did nothing wrong and signalled that he will appeal this finding. How would ‘expressing remorse’ to Judge Engoron, enhance his chances of a successful appeal, I wonder?

‘Ill-gotten gains’?  Let’s assume that the lenders had not given Trump the interest rate they did, but a higher rate – one more in keeping with Judge Engoron’s business acumen. Would the overall profit have been less?  Presumably not, because the interest rate Trump paid would have no bearing on the outcome.  It’s just that the profit would simply have been distributed between Trump and the bankers at a different ratio.  

And what is this ‘entitlement’ to loan and insurance rates?  Is there some statute in New York that links interest rates to a person’s worth?  Do Wall Street investment bankers get paid the big bucks to put aside their own judgement and take financial risks, just to tick boxes?

Is it the job of a court to provide cover for corporations who can’t carry out their own due diligence?   If the defendant were anyone but Trump, does anyone imagine the New York justice system would, unsolicited, run interference for the wolves of Wall Street?

I suspect that James recognized her abilities were not equal to the task of convincing even a New York jury, firstly, that absent anyone losing any money, fraud had actually been committed, and, secondly, that Trump is so naïve  he would genuinely have believed lenders would accept his valuations without question and due diligence. Failing that there can be no intent to defraud.  And therefore, no criminal case.  That is why she embarked on this legal travesty.

Now we have the news that Trump is unable to raise the US$1 billion bond he needs to delay settlement while he appeals the finding, failing which James says she will seize his assets.  This is on top of the bond he has already had to raise in the Carroll case.  Trump is often maligned  by his opponents as a disciple of Vladimir Putin.  Yet, it is the tactics of Democrats that have come straight out of the Putin playbook.

The Democrats have decided to trash democracy in order to save it.