Week In a Nutshell, 9/23/22

September 23, 2022 | Updated Feb 22 2023

Week In a Nutshell, 9/23/22

NY Attorney General Letitia James speaks during a press conference at the office of the Attorney General on September 21, 2022 in New York, New York. (Photo by Michael M. Santiago/Getty Images)

Here are some of the legal news stories making headlines this week:

New York Attorney General Letitia James filed a civil lawsuit against former President Donald Trump, three of his children, the Trump Organization, and business executives for allegedly taking part in a years-long financial fraud scheme.

According to James, Trump “falsely inflated his net worth by billions of dollars to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company, to satisfy continuing loan covenants, to induce insurers to provide insurance coverage for higher limits and at lower premiums, and to gain tax benefits,” for a period of ten years from 2011 to 2021. The lawsuit names as defendants, Trump, Donald Trump, Jr., Ivanka Trump, Eric Trump, Trump Organization CFO Allen Weisselberg, Trump Organization Controller Jeffrey McConney, the Trump Organization, and other business entities.
James alleges that Trump and the other defendants’ conduct violated multiple criminal statutes in New York, including falsification of business records, issuing a false financial statement, and engaging in insurance fraud.
The alleged misconduct impacted numerous Trump properties, including, among others, Trump’s triplex apartment in Trump Tower, Trump’s building on Wall Street, and Mar-a-Lago. For example, James argues that Trump misreported the size of his apartment — listing it as 30,000 square feet instead of about 11,000 square feet — which overvalued the unit.
Through the lawsuit, James is looking to, among other things, bar Trump from acquiring real estate in New York for five years or from serving as an officer of a New York corporation. James is also requesting that the defendants pay an estimated $250 million in disgorgement of profits. James has also referred the matter to the Internal Revenue Service and the U.S. Attorney for the Southern District of New York. The Manhattan District Attorney is conducting a parallel criminal investigation into Trump’s business dealings. James said she will continue to share evidence with prosecutors.

Judge Raymond Dearie has started his work as special master to review the documents seized from Mar-a-Lago.

Last week, District Judge Aileen Cannon appointed Dearie, a senior District Judge for the Eastern District of New York, as special master in this case. Trump’s legal team nominated Dearie for the job and DOJ accepted their submission.
On Tuesday, Dearie held the first hearing in the matter. He signaled his intention to swiftly complete the process — Cannon ordered him to finish reviewing the documents by the end of November. “I’m not going to hurry, but we have a lot to do and a relatively short period of time,” Dearie said.
Dearie also pressed Trump’s attorneys on the controversy surrounding the classification status of the documents. In media appearances, Trump has claimed that he declassified all of the seized documents. On Wednesday, Trump said that presidents can declassify documents “even by thinking about it.” However, his attorneys have yet to make such claims in court filings. During the hearing, Dearie said, “If the government gives me prima facie evidence that these are classified documents, and you, for whatever reason, decide not to advance any claim of declassification, I’m left with a prima facie case of classified documents, and as far as I’m concerned, that’s the end of it.” “My view of it is you can’t have your cake and eat it,” Dearie continued.
Meanwhile, a three-judge panel of the 11th Circuit Court of Appeals ruled in favor of DOJ and permitted investigators to resume using the documents with classification markings in furtherance of the investigation. “The United States argues that the district court likely erred in exercising its jurisdiction to enjoin the United States’s use of the classified records in its criminal investigation and to require the United States to submit the marked classified documents to a special master for review. We agree,” the judges wrote. The ruling only sets aside the part of Cannon’s order pertaining to classified documents — DOJ did not challenge the rest of the district court order, for now.