Friday, July 19

Trump’s Fraud Trial Starts With Attacks on Attorney General and Judge

The trials of Donald J. Trump began Monday in a New York courtroom, where the former president made an appearance to fight the first of several government actions against him — a civil case that imperils his company and threatens his image as a master of the business world.

The case, brought by Letitia James, New York’s attorney general, takes aim at Mr. Trump’s boasts about his net worth, accusing the former president of crossing from hyperbole into fraud. In some years, the attorney general’s office contends, Mr. Trump, his adult sons and their family business inflated his riches by more than $2 billion so that they could secure favorable terms from banks and bragging rights about his overall wealth.

“Year after year, loan after loan, defendants misrepresented Mr. Trump’s net worth,” Kevin Wallace, a lead lawyer for Ms. James, said during opening statements on Monday morning. He noted that while it might be one thing to exaggerate for a television audience or Forbes Magazine’s list of the richest people, “you cannot do it while conducting business in the state of New York.”

Just outside the courtroom, Mr. Trump fired a fusillade of personal attacks on Ms. James and the judge overseeing the case, Arthur F. Engoron, even suggesting that they were criminals.

Inside, however, Mr. Wallace methodically cast doubt on the value of some of Mr. Trump’s signature properties, including Trump Tower in Manhattan, laying the groundwork for a reckoning of the former president’s net worth. If the attorney general’s office proves its case, the judge could impose a sweeping array of punishments on Mr. Trump, including a $250 million penalty and a prohibition on operating a business in New York ever again.

The trial, expected to last several weeks and to include testimony from Mr. Trump, coincides with the former president’s latest White House run. After Ms. James’s civil case wraps, Mr. Trump will face four criminal trials that touch on a range of subjects: hush-money payments to a porn star, the handling of classified documents and his efforts to remain in power after losing the 2020 election.

Ms. James’s case, which will be decided by the judge rather than a jury, has struck a nerve with the former president. Her claims, which portray him as a cheat rather than a captain of industry, undercut an image he constructed while he catapulted from real estate to reality television fame and ultimately the White House.

For now, though, government scrutiny has only bolstered Mr. Trump’s political fortunes. He is polling far ahead of his Republican rivals and has used the cases against him to make fund-raising appeals, casting himself as a political martyr under attack from Democrats like Ms. James and Justice Engoron.

The trial will enable Mr. Trump to bring the campaign to the courthouse steps, where he can deliver impassioned defenses and pointed attacks while his lawyers grapple with accounting and financial arcana inside the courtroom.

On Monday, Mr. Trump sat mostly silent at the defense table, arms crossed and scowling, while occasionally rolling his eyes at the judge and yawning during the duller portions of the proceeding. But he came out swinging on his way into the courtroom, telling reporters that Ms. James was out to get him because he is performing so well in the polls.

“You ought to go after this attorney general,” he said, an explicit call to others to join his attacks on Ms. James, while also calling Justice Engoron a “rogue judge” who “should be out of office” and the case against him “a witch hunt, it’s a disgrace.”

One of Mr. Trump’s lawyers, Alina Habba, echoed some of his harshest claims during her opening statement, saying that Ms. James ran for her office with the express purpose to “get Trump.”

She argued, as Mr. Trump nodded along, that his company was simply “doing business” and that “there was no intent to defraud, period, the end” — speaking as though she were addressing a jury, or a television camera, rather than Justice Engoron.

Her statement, which she had not planned in advance, altered the tenor of what began as a dry proceeding, prompting squabbles between the defense team and the judge.

The substance of Mr. Trump’s defense is that his annual financial statements were merely estimates, and that valuing real estate is subjective, more art than science. The banks Mr. Trump submitted his statements to, his lawyers argued, were hardly victims: They made money from their dealings with Mr. Trump and did not rely on his estimates.

“There was no nefarious intent; it simply reflects the change in a complex, sophisticated real estate development corporation,” Mr. Trump’s lead lawyer, Christopher M. Kise, said during his opening statement. “Banks and insurers know that the statements are estimates; they are not designed to be absolutes.”

Yet Mr. Trump is starting the trial at a significant disadvantage. Justice Engoron ruled last week that the former president had persistently committed fraud, deciding that no trial was needed to determine the claim at the core of Ms. James’s lawsuit.

As an initial punishment, Justice Engoron revoked Mr. Trump’s licenses to operate his New York properties, a move that could crush much of the business known as the Trump Organization.

At trial, Ms. James is seeking more from Justice Engoron, asking that he impose the $250 million penalty on Mr. Trump and that the former president be permanently barred from running a business in New York. The trial will determine what penalty Mr. Trump must pay and whether he will be banished from the world of New York real estate that made him famous.

Ms. James’s witness list includes Trump supporters and critics alike: Mr. Trump and his sons, Eric and Donald Trump Jr., are on the list, as is Michael D. Cohen, his former fixer turned chief antagonist. During Mr. Wallace’s opening statement on Monday he played a video of Mr. Cohen saying that it was his job to reverse engineer the value of each of the company’s assets to arrive at Mr. Trump’s preferred overall net worth.

Mr. Wallace, in his statement, cited inflated values of three key Trump properties in New York: the triplex apartment in Trump Tower on Fifth Avenue; 40 Wall Street in the heart of the financial district; and his Seven Springs estate in Westchester County.

According to Mr. Wallace, Mr. Trump based the value of the triplex on its size, saying it was 30,000 square feet. In reality, the apartment was about 11,000 square feet.

“For years, Donald Trump falsely inflated his net worth to enrich himself and cheat the system,” Ms. James said in a statement Monday, adding, “No matter how rich or powerful you are, there are not two sets of laws for people in this country.”

As he left the courtroom on Monday afternoon, Mr. Trump passed Ms. James in the front row. He glared at her. Soon after, his son Eric walked by and shook her hand.

William K. Rashbaum contributed reporting.