Musk Responds to $354 Million Ruling in Trump’s Civil Fraud Case With One Simple Question

12.Whenever any person shall engage in repeated fraudulent or illegal acts or otherwise demonstrate persistent fraud or illegality in the carrying on, conducting or transaction of business, the attorney general may apply, in the name of the people of the state of New York, to the supreme court of the state of New York, on notice of five days, for an order enjoining the continuance of such business activity or of any fraudulent or illegal acts, directing restitution and damages and, in an appropriate case, cancelling any certificate filed under and by virtue of the provisions of section four hundred forty of the former penal law 3 or section one hundred thirty of the general business law, and the court may award the relief applied for or so much thereof as it may deem proper.  The word “fraud” or “fraudulent” as used herein shall include any device, scheme or artifice to defraud and any deception, misrepresentation, concealment, suppression, false pretense, false promise or unconscionable contractual provisions.  The term “persistent fraud” or “illegality” as used herein shall include continuance or carrying on of any fraudulent or illegal act or conduct.  The term “repeated” as used herein shall include repetition of any separate and distinct fraudulent or illegal act, or conduct which affects more than one person.  Notwithstanding any law to the contrary, all monies recovered or obtained under this subdivision by a state agency or state official or employee acting in their official capacity shall be subject to subdivision eleven of section four of the state finance law.

Donald Bender ...

Bender made absolutely clear that under the terms of the engagement for compilation services,
the client was responsible for ensuring that assets were stated at their “estimated current values,”
and that Weisselberg was responsible for determining which GAAP departures were identified
and disclosed. TT 237-238, 319-320. The engagement letters, signed by a combination of
Weisselberg, Donald Trump, and Donald Trump, Jr., confirmed this by unambiguously
acknowledging that Donald Trump, through his trustees, was responsible for the preparation and
fair presentation of the personal financial information in accordance with GAAP. See, e.g., PX
741.
Bender later learned that the Trump Organization had withheld records, such as appraisals, that
Mazars had requested while preparing the compilations, leading Mazars to conclude that the
Trump Organization had falsely represented that it had complied fully and truthfully with all
inquiries from Mazars. Mazars subsequently terminated its relationship with the Trump
Organization. TT 242-243; PX 2992, 2994. Bender stated that it was not until he was
interviewed by the Manhattan District Attorney’s Office, in spring 2021, that he learned that the
Trump Organization had withheld appraisals from Mazars. TT 536-538. Bender made clear that
Mazars would not have issued the SFCs if it had known that it had not been provided with all
appraisals. TT 251.

. . .

Camron Harris ...

TT 450-451. Harris also indicated that the Trump Organization designated McConney as the
“individual with suitable skills, knowledge and experience to oversee [Whitley Penn’s]
preparation of your financial statements,” as the Whitley Penn compilation engagement
agreement required. TT 459-464; PX-2300. Harris stressed the “fundamental” importance of
the client’s obligations, particularly during a compilation engagement, emphasizing that “[u]nder
a compilation, we are not doing anything, you know, to verify the accuracy of that information,
so that responsibility and accountability follows within the client to be doing those things so that
the information is correct, because we didn’t do anything to verify that it is correct.” TT 464-
465.
Harris further made clear that Whitley Penn would not have issued the 2021 SFC without a
signed representation letter from the client, indicating that it acknowledged its responsibility for
providing a fair presentation of values in accordance with GAAP. TT 480-481.

. . .

Nicholas Haigh...

Before approving the credit facility, the Private Wealth Management Division consulted
Deutsche Bank’s Valuation Services Group about market conditions to arrive at a conservative
estimate of the value of the commercial real estate should a need arise to liquidate during “bad
market conditions.” TT 1013-1016. In so doing, the Valuation Services Group applied a 50%
Page 10 of 92
452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs.
“haircut” to the valuations presented by the client, which Haigh affirmed was the “standardized
number for commercial real assets.”6 TT 1016, 1041.
Haigh affirmed that the Private Wealth Management Division would not have done business
with Donald Trump without a personal guarantee, and that the personal guarantee was the reason
for favorable pricing on the loan and the large size of the loan itself. TT 1017, 1020-1021, 1032.

. . .

Doug Larson...

The covenant obligated Donald Trump to provide an annual financial statement. Haigh stressed
that the annual SFCs were required because “[t]he bank wants to be sure that the client’s
financial strength is being maintained and also the bank wants to be able to test its covenants
periodically,” and that “[t]he bank would use the financial information that [the client] provided
to test itself to try and ensure that the client is in compliance with those covenants.” TT 1022-
1023.

. . .

Larson testified clearly and credibly that although his name is cited as the source to justify a
2.940 capitalization (or “cap”) rate8 on Niketown, a property in which Donald Trump owned two
long-term leases on 57th Street, Larson never had a specific conversation with Jeffrey McConney
in which he advised him that such a cap rate would be appropriate; nor was he aware that he was
listed as a source for such a cap rate. TT 1572-1575; See, e.g., PX 758. Larson further said that
he would not have advised McConney to select that cap rate, as “it’s not how we would value [it]
in our practice.” TT 1583. Larson stated that McConney was incorrect in stating that he
consulted with Larson when valuing Trump Tower. TT 1581.
Upon learning that his name had been repeatedly used to justify cap rates that he had not
recommended, Larson said it was “inappropriate and inaccurate … I should have been told and,
you know, an appraisal should have been ordered.” TT 1587.
Larson further took issue with his name being used to justify a cap rate on the property
controlled by a Vornado partnership interest. In 2012, Larson appraised the property at 1290
Avenue of the Americas at $2 billion with a cap rate of 4.5 percent. PX 1824; TT 1588-1589.
Notwithstanding, in the following SFC’s supporting data, McConney cites Larson as the source
for using a 3.12 percent cap rate, even though he never worked with McConney to pick a cap rate
to value that property, and that he would not have, as valuing minority interests is a specialized
area beyond his expertise. TT 1589-1595.

. . .

Michael Holl...

On January 10, 2017, Holl attended a meeting at the Trump Organization with Allen Weisselberg
and other Trump Organization employees for the purpose of reviewing the Trump Organization’s
financials as part of the insurance company’s due diligence. PX 588; TT 2496-2498, 2516. On
the way home from the meeting, Holl drafted an email to his supervisors memorializing the
information he obtained. PX 2985; TT 2498-2499. Holl’s contemporaneous email reads: “Saw
very few financials but did see the balance sheet for year ends 2015. They assured me that the
one being put together is better. They have total assets of 6.6 BB. Cash of $192 mm. Total debt
of $519 mm. No single debt larger than $160mm.” PX 2985. Holl testified that the $192
million in cash was a meaningful number for him, as it “was a measure of liquidity for the
company.” TT 2500.
Holl’s contemporaneous email also reads: “No material litigation or communication from
anyone.” PX 2985. Holl understood this to be a representation from the Trump Organization
that there was no pending litigation or notices or communication that could lead to litigation and
implicate the D&O policy, which he viewed in a positive light. TT 2500-2502.

Holl deemed these representations relevant when HCC ultimately decided to extend coverage.
TT 2502.

Page 17 of 92
452564/2022 PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK vs.
one being put together is better. They have total assets of 6.6 BB. Cash of $192 mm. Total debt
of $519 mm. No single debt larger than $160mm.” PX 2985. Holl testified that the $192
million in cash was a meaningful number for him, as it “was a measure of liquidity for the
company.” TT 2500.
Holl’s contemporaneous email also reads: “No material litigation or communication from
anyone.” PX 2985. Holl understood this to be a representation from the Trump Organization
that there was no pending litigation or notices or communication that could lead to litigation and
implicate the D&O policy, which he viewed in a positive light. TT 2500-2502.
Holl deemed these representations relevant when HCC ultimately decided to extend coverage.
TT 2502.

Sheri Dillon

Sheri Dillon is a tax lawyer who provided business and legal advice to the Trump Organization
from 2005 through 2020. TT 2527. Throughout her various engagements from 2011-2020,
Dillon interfaced with Donald Trump, Donald Trump, Jr. Eric Trump, Ivanka Trump, Patrick
Birney, and Jill Martin. TT 2532-2534.
Contrary to the representations made to Holl about no pending litigation or claims, as early as
June 2016 Dillon was aware of claims made against the Trump Organization that could trigger
liability, and she had discussed such claims with Donald Trump, Jeffrey McConney, and Allen
Weisselberg. TT 2540-2555.
Part of her work for the Trump Organization was advising it about potential conservation
easements. TT 2531. Dillon explained that a conservation easement is essentially a “negative
covenant” in which someone who owns property agrees, in a recorded deed that runs in
perpetuity with the land, not to do something, in exchange for a tax deduction that is “equal to
the value of the easement.” TT 4123-4126.
Dillon recalls working on potential conservation easements at Trump National Golf Club LA
(“TNGCLA”), Briarcliff, and Seven Springs. As part of her engagements, Dillon would retain
appraisers from Cushman & Wakefield. She explained that obtaining a qualified appraisal to
value the potential conservation easement is an essential part of the process, as only a qualified
appraisal could determine the value of the tax deduction that could be taken. TT 4127-4128.
She clarified that qualified appraisers were tasked with determining the “highest and best use” of
a property if it were developed. TT 4141-4142.

When working on a potential conservation easement for TNGCLA, Dillon retained Brian Curry,
of Cushman & Wakefield, who valued the driving range on the property at between $27-28
million in 2014. PX 944; TT 2578-2580. On March 12, 2015, Cushman & Wakefield sent an
appraisal of the TNGCLA driving range portion of the property that valued it at $25 million as of
December 26, 2014; the appraisal also valued the entire TNGCLA property, before any potential
conservation easement, at $107 million. PX 1464; TT 2598-2603. Although Dillon could not
recall exactly with whom at the Trump Organization she shared this valuation, she knows it
would have gone to McConney, as he “would have needed it.” TT 2608-2611. Further, email
communications demonstrate ongoing discussions between Dillon, Weisselberg, and Trump, Jr.
about the potential conservation easement on TNGCLA. PX 1412; TT 4142-4146.
Notwithstanding, the 2015 supporting data and accompanying SFC valued TNGCLA at over
$140 million. PX 731; TT 2611-2623.

Lets see, Borrows $150,000,000 against properties worth between $500,000,000 and $1,200,000,000. Pays back the money, with interest, on time. Show me the fraud

Disgorgement is distinct from the remedy of
restitution because it focuses on the gain to the wrongdoer as
opposed to the loss to the victim. Thus, disgorgement aims to deter
wrongdoing by preventing the wrongdoer from retaining ill-gotten
gains from fraudulent conduct. Accordingly, the remedy of
disgorgement does not require a showing or allegation of direct
losses to consumers or the public; the source of the ill-gotten gains
is “immaterial.”

Engoron ordered basically three tiers of judgements: $168,040,168 with 5~ years of pre-judgment interest; $126,828,600 with 2~ years of pre-judgment interest; and $68,000,000~ with 1~ year of prejudgment interest. The imputed rate in New York for prejudgment interest is 9%.

So, for the $168,040,168 tranche, Trump will owe $263,097,302.80 with the interest added. For the $126,828,600 (2 years), Trump will owe $151,739,452.95. For the remaining $69,026,048, Trump and/or his sons will have to pay $75,501,167.42.

For a grand total of $490,337,923.17! And each year this thing goes unpaid, Trump will owe an additional $44.1 million!