Letitia James won a $454 million judgment against Trump, his penalty for a decade of fraud.
She and Trump are now fighting over her claims that he withheld evidence from her fraud probe.
NY law lets James seek additional fines if evidence that she subpoenaed was lost or destroyed.
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New York Attorney General Letitia James is not content to rest on her $454 million civil fraud trial victory, even as Trump's debt to the state keeps snowballing, growing by a punishing $5 million in interest since February.
No, James still has some unfinished Trump business on her calendar.
She is asking hard questions about the $175 million bond that would safeguard at least some of what Trump owes New York while he appeals losing the trial. A hearing on the bond's financial soundness is set for Monday, April 22.
And James is also intent on holding Trump's feet to the fire, along with the feet of his lawyers, over something her office has complained about for four years: the withholding of evidence.
The integrity of the fraud trial may be at stake, she argued in a letter Tuesday night.
The AG is looking at three internal Trump Organization email chains from 2016 that were never turned over to her office during her five years of pursuing Trump for tricking banks into thinking he's worth more than he is.
Manhattan prosecutors used them as evidence in sending former Trump CFO Allen Weisselberg to jail for perjury on Monday.
But the emails — in which Weisselberg and his Trump Org underlings responded to Forbes magazine questions about the value of Trump's Manhattan triplex penthouse — were not among the 900,000 documents Trump Org turned over to James' fraud probe.
"The Court is well within its authority to determine if Defendants and their counsel facilitated that perjury by withholding of incriminating documents," James argued in Tuesday night's letter.
Solving that mystery is "certainly within the power of this Court to safeguard the integrity of its own proceedings," she argued.
When James first found out about the missing triplex emails in October, she immediately asked the trial judge to order a forensic review of "electronic data held by the Trump Organization for the very brief period [of] August to September of 2016," when the emails were written.
"The failure to produce these later emails indicates a breakdown somewhere in the process of preserving, collecting, reviewing, and producing documents," her office complained in an October 18 letter to the judge, state Supreme Court Justice Arthur Engoron.
The forensic review would be conducted by the court-imposed monitor — former federal judge Barbara Jones — whose staff at Bracewell LLP has been scrutinizing Trump's finances since November, 2022.
Former federal judge Barbara Jones. Drew Angerer/Getty Images
Six months later, the proposed forensic review has not yet been approved by Engoron.
Instead, it's the subject of a heated new paperwork battle between Trump's lawyers, who oppose a review, and an attorney for James who has championed the withheld-documents cause since 2020.
"We have already raised multiple times the prospect that Defendants have withheld relevant and responsive information," that lawyer, Senior Enforcement Counsel Kevin Wallace, wrote Engoron last week.
His April 4 letter to the judge formally asks "that the Monitor be tasked with reviewing electronic files collected by Defendants," including those collected for production to Manhattan prosecutors.
The monitor's review would determine if the emails "were in the possession of the Trump Organization," and, if so, why they were never turned over.
One of Trump's lawyers, Clifford Robert, this week spent seven single-spaced pages arguing against expanding the monitor's role further.
"The NYAG's astonishing request is an evident play to transform the Monitor into her own special counsel," he wrote.
He did not immediately respond to a request for comment from Business Insider.
Under Engoron's most recent expansion of the monitor's role, from March 21, Jones' powers are already sweeping.
Trump must give the retired judge and her staff five days notice of any cash or asset transfers totaling $5 million or more, and 30 days notice of the creation or dissolution of any of the 400-plus entities under the Trump Organization umbrella.
She must also review all company financial filings, including tax returns, before they're sent to third parties.
Trump's alleged withholding of evidence has been an issue since at least 2020, when James first complained publicly that Trump Organization was defying her subpoenas.
This 2020 filing was first time New York officials publicly complained about the withholding evidence. NY Attorney General's Office/Business Insider
For at least two years, James has appeared to be steadily building a "spoliation" case against Trump and his company. That's the legal term for the loss or destruction of evidence that should have been preserved for a lawsuit.
As a senior lawyer for James, Wallace has repeatedly complained about missing evidence and signaled that his office may seek "relief," meaning potential sanctions.
At a hearing in April of 2022, he compared getting Trump's documents to "pulling teeth."
Out of some 900,000 documents turned over, only ten were "custodial" Trump documents, meaning business files in the former president's direct custody.
When Trump attorney Alina Habba insisted that Trump had no other personal custodial documents to turn over, Wallace told the judge, "I'll be frank. If that's all there is, it raises a bunch of other issues."
Sixteen months later, when Wallace wrote the judge that the AG was ready for trial, he made sure to add that James' office "reserves its right to seek relief after trial relating to the Defendant's spoliation of evidence."
Civil case law from New York allows a judge to set sanctions for spoliation that include a finding of contempt of court and any fines they see fit.
But there's a high bar of proof, said Marc Frazier Scholl, a former financial crimes prosecutor for the Manhattan District Attorney's Office.
The AG's office would have to prove that Trump, Trump Org executives, and/or their defense attorneys had control over the documents being subpoenaed and destroyed or withheld them instead of turning them over.
"The first thing, if you're seeking spoliation sanctions, is to prove there was a known obligations to keep the evidence when it was lost or destroyed," said Scholl, who is now of counsel at Lewis Baach Kaufmann Middlemiss .
If the AG does end up seeking fines, they would likely be minimal and symbolic, he predicted.
James' lawyers have said that many of Trump's missing documents were ultimately successfully subpoenaed from outside witnesses who also had copies.
"They got the documents in other ways, which is why they know to ask for them specifically," in the case of the Weisselberg emails, he added.
Ultimately, the AG's office won the case, and won big — getting essentially everything they sued for, including the massive financial judgment.
"Would they really have gotten a larger judgment if they got more documents?" Scholl asked.
"I don't think so," he said. "I think this is a shot across the bow, potentially against the Trump counsel."
CGordini on April 11st, 2024 at 01:34 UTC »
Of course he did.
Guilty people always hide.
And when they do, they'll lie non-stop to cover it up.
That's all Trump does any more.
Afrin_Drip on April 11st, 2024 at 01:34 UTC »
Dear Justice Engoron:
On behalf of the Office of the Attorney General (“OAG”), we write to very briefly respond to the letter submitted last night by Defendants. Spanning more than ten single-spaced pages, Defendants’ argument boils down to the proposition that the Court is powerless to determine if a fraud was committed upon it during the course of two separate proceedings because discovery is now closed. In essence, Defendants contend that once a note of issue is filed it is improper to examine the course of discovery; even when a named Defendant admits to having committed perjury during the discovery process and subsequent trial. That is manifestly not the case.
The Court has inherent authority over any actions that would undermine the integrity of its proceedings. “The judiciary, and the Chief Judge at its head, has the ‘inherent power to address actions which are meant to undermine the truth seeking function of the judicial system and place in question the integrity of the courts and our system of justice.’” Soares v. State, 68 Misc. 3d 249, 282 (Sup. Ct. Albany Cty. 2020), quoting CDR Creances S.A.S. v. Cohen, 23 N.Y.3d 307, 318 (2014), also citing Moxham v. Hannigan, 89 A.D.2d 300, 302, (4th Dep’t 1982) (“it cannot be disputed that a Judge [including the Chief Judge] has the overriding duty to preserve the integrity and honor of the judicial system”). That inherent authority extends beyond the completion of discovery and is broader than merely ensuring compliance with the ethical canons.
The Court has broad authority over the actions of counsel in the conduct of matters before it. As the First Department has noted: The principle that attorneys are subject in the first instance to the power and control of the courts is also firmly embedded in New York jurisprudence, as an inherent power recognized by our Constitution as well as a statutory power reflected in the regulations by which attorneys are disciplined. The language in Judiciary Law § 90(2) stating, “The supreme court shall have the power and control over attorneys and counselors-at-law”, broadly establishes judicial governance over the conduct of attorneys. Notably, this judicial role was stated in like terms as far back as the New York State Constitution of 1777 (see, People ex rel. Karlin v. Culkin, 248 N.Y. 465, 162 N.E. 487 [1928]). April 4, 2024 Page 2 28 LIBERTY STREET, NEW YORK, NY 10005 ● WWW.AG.NY.GOV Moreover, . . . there is explicit authority in this Court’s Rules to support a determination that we retain the inherent authority to discipline attorneys for misconduct independent of any violations of New York’s Code of Professional Responsibility (“NY Code”), which focuses exclusively on prohibitions applicable to a “lawyer.” Section 603.1(c) of the First Department Rules (22 NYCRR 603.1[c]) provides in part: Neither the conduct of proceedings nor the imposition of discipline pursuant to this Part shall preclude the imposition of any further or additional sanctions prescribed or authorized by law, and nothing herein contained shall be construed to deny to any other court or agency such powers as are necessary for that court or agency to maintain control over proceedings conducted before it. In re Wong, 275 A.D.2d 1, 5–6 (1st Dep’t 2000). That authority continues not just after the close of discovery, but even after the close of the case. See, e.g., 13 E. 124 LLC v. J&M Realty Servs. Corp., 222 A.D.3d 446 (1st Dep’t 2023) (“Voluntary discontinuance did not divest the court of jurisdiction to impose sanctions for pre-discontinuance conduct.”).
Mr. Weisselberg has admitted that he perjured himself during discovery and the trial in this action.1 The Court is well within its authority to determine if Defendants and their counsel facilitated that perjury by withholding of incriminating documents. The Monitor has already been tasked with assessing Defendants’ internal controls, compliance functions and record- keeping. The potential failure to properly produce documents in a legal proceeding relevant to the valuation of Mr. Trump’s triplex plainly falls within the ambit of her authority, and certainly within the power of this Court to safeguard the integrity of its own proceedings.
TurboSalsa on April 11st, 2024 at 01:34 UTC »
God it's refreshing that at least one AG and a handful of judges in this entire country aren't worried about the optics of not letting Trump walk all over them.