Former President Donald Trump is on trial in New York in a $250 million civil lawsuit that could alter the personal fortune and real estate empire that helped propel Trump to the White House.
Trump, his sons Eric Trump and and Donald Trump Jr., and other top Trump Organization executives are accused by New York Attorney General Letitia James of engaging in a decade-long scheme in which they used “numerous acts of fraud and misrepresentation” to inflate Trump’s net worth in order get more favorable loan terms. The trial comes after the judge in the case ruled in a partial summary judgment that Trump had submitted “fraudulent valuations” for his assets, leaving the trial to determine additional actions and what penalty, if any, the defendants should receive.
The former president has denied all wrongdoing and his attorneys have argued that Trump’s alleged inflated valuations were a product of his business skill.
After two days of testimony for the defense, former Trump Organization controller Jeff McConney stepped off the witness stand.
Judge Arthur Engoron then adjourned court until Monday.
When court resumes after the Thanksgiving break, the defense plans to call two Trump Organization executives, followed by several Deutsche Bank employees.
Former Trump Organization controller Jeff McConney, on cross-examination, testified that he thought Eric Trump should review his father’s statement of financial condition in 2021.
“You thought Eric Trump should review the statement of financial condition?” state attorney Andrew Amer asked after showing McConney his notes indicating “Eric should review SOFC.”
“That was my thought,” McConney said.
When Eric Trump testified, he described the statements as the responsibility of the Trump Organization’s accountants.
“I never had anything to do with the statement of financial condition,” Eric Trump testified, before partially walking back his statement to say, regarding notes that McConney requested from him, “I don’t think that it ever registered, it was for a personal statement of financial condition.”
Former Trump Organization controller Jeff McConney, testifying for the defense, said that he overvalued Donald Trump’s penthouse apartment by over $100 million because he relied on an incorrect email.
Judge Arthur Engoron determined in his partial summary judgment that the penthouse was overvalued by as much as $200 million because it was falsely listed as being three times larger than its actual size.
To get to that value, McConney said relied on a Trump Organization broker who falsely represented the apartment was 30,000 square feet.
“I would rely on him. I figured he knew the property a lot better than I did,” said McConney, who added that he never spent considerable time in the apartment.
The Trump Organization lowered the value of the penthouse by more than $200 million in 2017 after a Forbes magazine article exposed the error.
McConney’s testimony came before he broke down on the statnd at the end of his direct examination.
Earlier in his testimony, before breaking down on the witness stand, longtime Trump Organization controller Jeff McConney drew a blank when asked why Trump’s Mar-a-Lago property was valued in Trump’s statements of financial condition as a private residence rather than a social club — a central allegation levied by the New York attorney general.
The property was valued in excess of $500 million on the basis that it could be sold as a private residence — despite Trump signing a deed in 2002 with the National Trust for Historic Preservation that exclusively limited the property to being used as a club. The Palm Beach County Assessor subsequently appraised the market value of the club at less than $28 million, significantly lowering Trump’s tax burden.
“I don’t remember off the top of my head,” how the property ended up being valued on Trump’s financial statements as a residence, McConney said, confirming that was the case.
He testified that he could not remember having a specific conversation with outside accounting firm Mazars USA about the approach to valuing Mar-a-Lago.
While McConney could not recall why the decision to value the property as a private residence was made, he said that he used a reasonable approach to determining a price-per-acre based on nearby property sales. He said that their comparable property approach resulted in a $50 million decrease in value between 2014 and 2015.
“Our intention was always to reflect as best we could the value of these properties,” McConney said.
