One step at a time

MARY REICHARD, HOST: It’s Tuesday the 2nd of April, 2024. Glad to have you along for today’s edition of The World and Everything in It. Good morning, I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher. First up: a mammoth fraud penalty.

Last month, a New York judge found former President Donald Trump liable for civil fraud, and ordered him to pay a judgment totaling 450 million dollars plus. Trump vowed that he would fight the ruling all the way to the Supreme Court if necessary.

MARY REICHARD, HOST: WORLD’s Leo Briceno now with more on the legal battle ahead.

LEO BRICENO: In February, Judge Arthur Engoron ruled that the former president, his sons, and his business associates committed civil fraud. How? By purposely overestimating the value of their assets to secure business loans in the state of New York. NYU professor and Hoover Institute fellow Richard Epstein says the size of the $450 million penalty is concerning and so is the reasoning behind it.

RICHARD EPSTEIN: But, you know, I don't want to say a kind word for Donald Trump as a person, because I don't think it's appropriate here to have any opinion about him. But all the litigation against him is right at the edge or over the top of this situation. And it's all brought by people who hate him for political reasons. This is not the way this country should run.

In 2022, Letitia James campaigned for reelection as attorney general on a promise to take Trump to court. She repeatedly called him a “con man” and promised to specifically focus on his real estate dealings. And speaking to ABC last month, she vowed to follow through on Engoron’s judgment.

LETITIA JAMES: If he does not have funds to pay off the judgment, then we will seek judgment enforcement mechanisms in court, and we will ask the judge to seize his assets.

Trump filed a notice of appeal after the decision came down. But state law requires a defendant to post the bond before filing the appeal itself. Trump, however, could not find underwriters willing to cover the half-a-billion dollar judgment. Then, hours before the New York Attorney General could sweep into Trump’s bank accounts, an appeals court intervened. It reduced the bond amount to $175 million. Any bonds above $100 million might still require more than one underwriter, but Trump says that he can pay the amount - in cash.

DONALD TRUMP: I respect the appellate division for substantially reducing that ridiculous amount of money that was put on by a corrupt judge.

But the appeals court left in place Engoron’s appointment of a monitor, retired Judge Barbara Jones, to oversee the Trump Organization. The company must submit daily financial operation information to her and keep her up to date on Trump’s latest efforts to secure a bond. In two months, she will submit a report on the Trump Organization’s internal operations and recommend controls to Engoron, who will require the company to abide by them. Trump insists that this case along with several other civil and criminal indictments against him are aimed at hampering his reelection campaign.

TRUMP: But I would also like to be able to use some of my cash to get elected. They don’t want me to use my cash to get elected. They don’t want me taking cash out to use it for the campaign.

After posting the new bond, Trump can challenge the legal reasoning behind Judge Engoron’s ruling—a ruling that Epstein, the law professor, calls biased and legally flimsy.

EPSTEIN: What they said is, he basically defrauded the banks. Right? By getting more favorable loans by inflating his assets.

Epstein points out that banks have ways to double check applicants’ claims, and that’s what they did in this case.

EPSTEIN: And what they did is they ran their own studies, and they came up with the loan, and the figures that they came up with commercial figures. And it turns out that Trump accepted them. The nature of this business is you rely on your due diligence, not on somebody else. They paid all the loans back. And so there was no harm of any sort.

But Attorney General James says it’s the people of New York that were the victims of the alleged fraud.

JAMES: When the powerful break the law and take more than their fair share, there are fewer resources available for working people, small businesses, and families.

If the ruling survives an appeal, Epstein says it could have far-reaching consequences for businesses in the state.

EPSTEIN: Any transaction that's negotiated inside of New York State, by any two parties who are not Trump may be set aside by a shareholder, by a creditor, or some third party so that no security of transactions can be given. Because there's always this kind of ugly situation hanging over the top of the particular case. And what's going to happen is people are going to have to move out of the state.

The appeals court is in recess until September, so Trump’s lawyers now have six months to prepare for arguments in the case.

Reporting for WORLD, I’m Leo Briceno. Additional reporting from Carolina Lumetta.

WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.