Donald Trump, Jr. testified in NYC civil fraud trial

Donald Trump Jr. and former President of the United States Donald Trump look on prior to the fight between Evander Holyfield and Vitor Belfort at Seminole Hard Rock Hotel & Casino on Sept. 11, 2021 in Hollywood, Florida.

Donald Trump Jr. is expected to testify on Wednesday in the state of New York’s civil fraud trial against the Trump Organization, which is accused of wildly inflating the value of assets to banks and investors. 

Before junior takes the hot seat, investment banker Michiel McCarty is expected to testify as an expert witness for the state. Trump’s defense team has been trying to block his testimony, but Judge Arthur Engoron ruled in favor of the state. 

McCarty’s testimony follows Tuesday’s testimony from David Orowitz, a former Trump Organization vice president who described Ivanka Trump’s "significant involvement" in loan negotiations. 

Reporters we will be following throughout the day for their live coverage from New York:

Adam Klasfeld - The Messenger

Lisa Rubin - MSNBC legal analyst

Henry Rosoff - Brooklyn political reporter for PIX11

Erica Orden - Politico Senior Reporter

UPDATE: Wednesday, Nov 1, 2023 · 8:38:49 PM +00:00 · Jen Hayden

And that is a wrap on testimony for Wednesday. We’ll be back tomorrow for more testimony from Don Jr. and Eric Trump.

We're done for the day.

Trump Jr. returns tomorrow, and we'll be here to cover it again.

When he's done, Eric Trump is up.

— Adam Klasfeld (@KlasfeldReports) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 8:22:40 PM +00:00 · Jen Hayden

And now Robert and Habba are up too, and Habba accuses Faherty of testifying, to which she takes umbrage. Engoron says not every part of the statement of financial condition is relevant.

— Lisa Rubin (@lawofruby) November 1, 2023

Faherty continues to ask about how Jr. reported back to the Trump Org. that licensing and management deals for which TTT Consulting was paid were struck. He does not recall.

— Lisa Rubin (@lawofruby) November 1, 2023

Trump knows he is cornered. He becomes defensive, saying he depended not only on the “intimate knowledge” of Mazars but that of Weisselberg, who he describes as an accountant. (The answer is struck because it was “all over the place.”)

— Lisa Rubin (@lawofruby) November 1, 2023

Faherty then directs him to the portion of the 2017 statement dealing with real estate licensing and developments, the $246 million value of which was based on an assessment by the trustees, in conjunction with the professionals they hired.

— Lisa Rubin (@lawofruby) November 1, 2023

But he does not recall whether he did or not.

— Lisa Rubin (@lawofruby) November 1, 2023

Trump has no knowledge whether he receives distributions to this day from TTT. And we’re done for the day.

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 8:08:59 PM +00:00 · Jen Hayden

He does not recall anyone serving as a trustee with him other than Weisselberg or his dad. Eric, for example, was not a trustee, but he had authority to do things within the Trump Org. and Jr. would have consulted him on projects where Eric had greater involvement.

— Lisa Rubin (@lawofruby) November 1, 2023

(This is smart on the AG’s behalf. They know the Trumps are self-aggrandizing and will claim broad expertise.)

— Lisa Rubin (@lawofruby) November 1, 2023

And Kise is now on his feet, objecting that TTT Consulting is irrelevant to this case and asked that the AG move it along. Engoron echoes that request—but it’s not clear anything must or will change.

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 7:55:04 PM +00:00 · Jen Hayden

We’re back.

Now the AG’s Colleen Faherty is showing Trump Jr. a cover email from Feb. 2022 between Alan Rosen, a Trump Org lawyer, and Alan Garten, the org’s general counsel, attaching trust-related docs.

— Lisa Rubin (@lawofruby) November 1, 2023

The document reflects that Trump Jr. would resume his role as trustee six months later on July 7, 2021. But Trump has no memory of not serving as trustee or being restored.

— Lisa Rubin (@lawofruby) November 1, 2023

Trump is shown a new document starting with an email from Sherri Dillon, a prior outside tax counsel to the Org. and was counsel to the trustees. Trump said, “I believe she set it up.”

— Lisa Rubin (@lawofruby) November 1, 2023

(Trump Jr. was well prepped: He says he won’t speculate about notes on a document he did not receive and has not previously seen.)

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 7:27:39 PM +00:00 · Jen Hayden

And just like that we are again in recess for 15 minutes.

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UPDATE: Wednesday, Nov 1, 2023 · 7:20:52 PM +00:00 · Jen Hayden

Faherty probes the timing of Allen Weisselberg's departure from the Trump Organization.

Trump Jr. said it was after his indictment, but he says he doesn't know when.

Q: Did you ask him to leave?
A: I did not.

Q: Did your brother ask him to leave?
A: I'm not sure.

— Adam Klasfeld (@KlasfeldReports) November 1, 2023

He claims he doesn’t know the specifics of why Weisselberg is no longer employed there and didn’t terminate him. Whether Eric did, he does not know.

— Lisa Rubin (@lawofruby) November 1, 2023

Trump, Jr. is presented with a document he says he does not recognize. It is a power of attorney for his father, as the principal, that was executed in March 2017.

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 7:18:43 PM +00:00 · Jen Hayden

The ultimate authority post-Trump inauguration was held by Eric, Weisselberg, and Trump, Jr.; Weisselberg no longer works there because of “some legal trouble he got himself into” and is no longer employed there.

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 7:09:12 PM +00:00 · Jen Hayden

Asked if he's familiar with rent-stabilization law, Don Jr says: "I was then. I probably forgot most of it now."

— Adam Klasfeld (@KlasfeldReports) November 1, 2023

At some point, he became an Executive Vice President at the Trump Org., although he could not pinpoint when. He confirmed that he has served in that capacity since 2011.

— Lisa Rubin (@lawofruby) November 1, 2023

Still, he initially could not list any activities for which he needed Weisselberg’s authority from 2011-2013. Pressed, he said he would not have done a refinance without Weisselberg but would not have sought Weisselberg’s approval for a licensing deal. (He could not recall any…

— Lisa Rubin (@lawofruby) November 1, 2023

In 2017, he said, they stopped reporting to his father with respect to decisions involving the business. That’s when a combination of he, Eric, and Weisselberg took control, he testified, but did not remember any changes in title to reflect those changes.

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 7:03:40 PM +00:00 · Jen Hayden

Asked who his employer is, Trump Jr. replies: "I believe it’s still Trump Payroll Corp."

— Adam Klasfeld (@KlasfeldReports) November 1, 2023

Jr. says he began his employment at the Trump Org. in 2001 as a project manager for a Hudson Waterfront Associates project.

— Lisa Rubin (@lawofruby) November 1, 2023

He then handled construction and development at Trump Park Avenue, including overseeing the banking relationship there. There are certain units there that are “hotel stabilized,” or rent stabilized as a matter of law, he testified.

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 6:57:51 PM +00:00 · Jen Hayden

Q: Are you familiar with an acronym G-A-A-P or GAAP?

After a back-and-forth, Trump Jr. answers that he knows what it stands for: "generally accepted accounting principles."

Beyond that, he says, "That's what I have CPAs for."

— Adam Klasfeld (@KlasfeldReports) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 6:55:12 PM +00:00 · Jen Hayden

And here we go.

Pool photographers are being admitted to take the requisite pictures of Trump, Jr. Meanwhile, Chris Kise, who participated in today’s 1 pm hearing in the classified documents case remotely, is back in the courtroom.

— Lisa Rubin (@lawofruby) November 1, 2023

Trump testifies that he received a B.S. in real estate finance and marketing from the Wharton School of the University of Pennsylvania. He also holds a license as a real estate broker, as sponsored by Trump International Realty, the organization’s brokerage arm.

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 6:49:50 PM +00:00 · Jen Hayden

It appears we are getting closer to junior’s testimony. 

The witness prior to Don Jr. just finished testifying.

— erica orden (@eorden) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 6:43:01 PM +00:00 · Jen Hayden

Suarez just paused and asked for time to confer with Habba. Kise is nowhere to be found, having excused himself at 12:40.

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 6:21:46 PM +00:00 · Jen Hayden

Court is back in session. 

The witness returns to the stand.

Trump's attorney asserts that a Deutsche witness testified that the bank was not misled.

NYAG objects, stating that Suarez is misstating the testimony.

— Adam Klasfeld (@KlasfeldReports) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 5:59:48 PM +00:00 · Jen Hayden

Looks like we’ll be underway again soon.

Donald Trump Jr. arrives at a Manhattan courthouse to testify in his father’s New York civil fraud trial. pic.twitter.com/AEPRlFBPBj

— The Recount (@therecount) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 5:06:19 PM +00:00 · Jen Hayden

Court has recessed for lunch. Back soon.

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UPDATE: Wednesday, Nov 1, 2023 · 4:45:01 PM +00:00 · Jen Hayden

He also spent the bulk of the last hour establishing what assets were excluded from the collateral posted for certain loans and therefore reduced the amount of Trump’s personal guarantee in ways that should have also reduced McCarty’s differential between the real interest rate…

— Lisa Rubin (@lawofruby) November 1, 2023

In any event, McCarty says, the testimony of David Williams, a DB exec, and DB’s pricing grid for different risk profiles/kinds of loans were not material to his analysis. He says he also did not consider whether DB’s pricing grid would have remained the same even if his net…

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 4:38:57 PM +00:00 · Jen Hayden

Doral, 2021

Actual Int % - 1.8318%
CRE Int % - 10.0000%
Term - 8/11/23
Loan Amt Adj - $125,000,000
Interest delta - $10,210,313

— Molly Crane-Newman (@molcranenewman) November 1, 2023

The Old Post Office, 2020

Actual Int % - 1.9348%
CRE Int % - $8.0000%
Term - 8/11/24
Loan Amt Adj - $170,000,000
Interest delta - $10,310,840

— Molly Crane-Newman (@molcranenewman) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 4:26:37 PM +00:00 · Jen Hayden

Adam Klasfeld from The Messenger has a summary of the testimony thus far:

"Trump Org’s Fraudulent Statements Cost Banks $168 Million in Interest, AG’s Financial Expert Testifies"

Here is the expert's chart on what they banks charged vs. what they would have had they known Trump's true wealth.

My latest, @TheMessenger https://t.co/rGy3MK0Yvm pic.twitter.com/Lw00T7DyRl

— Adam Klasfeld (@KlasfeldReports) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 4:19:14 PM +00:00 · Jen Hayden

Judge Engoron getting frustrated with the cross-examination of the witness before Don Jr. an AG's expert in valuations... "stop turning every question into four questions"
Team Trump objects and notes "you never interrupt the prosecutions examination..."

— Henry Rosoff (@HenryRosoff) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 4:17:37 PM +00:00 · Jen Hayden

His calculations show approx $168M in lost interest in deals from 2014 to 2023 involving Trump's Wall Street skyscraper, Doral resort in Florida, the Old Post Office in DC, and Trump's Chicago hotel.

Kise has objected to his expert testimony as "beyond absurd."

— Molly Crane-Newman (@molcranenewman) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 4:12:10 PM +00:00 · Jen Hayden

Don Jr. timing update:
It'll be after lunch
(if not tomorrow morning)
After 3pm at the earliest seeks likely based on what Team Trump said just now about its plan for cross-examination of the prior witness. pic.twitter.com/JMP4JMUW7j

— Henry Rosoff (@HenryRosoff) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 3:50:16 PM +00:00 · Jen Hayden

It’s go time!

Direct examination ends.

Trump's lawyer Jesus Suarez is up for cross.

— Adam Klasfeld (@KlasfeldReports) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 3:28:08 PM +00:00 · Jen Hayden

Judge Engoron dismisses the court for a morning recess. Grab a cup of coffee or a bag of popcorn and we’ll return shortly. 

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UPDATE: Wednesday, Nov 1, 2023 · 3:26:36 PM +00:00 · Jen Hayden

Engoron:

"Overruled."

— Adam Klasfeld (@KlasfeldReports) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 3:23:38 PM +00:00 · Jen Hayden

The OPO loan was also a syndicated loan with multiple institutions participating and additional fees owed to the originating bank.

— Lisa Rubin (@lawofruby) November 1, 2023

Using similar methodologies, he concluded the lenders lost over $17 million over the life of the loan.

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 3:08:10 PM +00:00 · Jen Hayden

Trump attorney Christopher Kise is objecting to McCarty’s assessment. 

They did not, he maintains, so it’s inappropriate for McCarty to reconstruct that decision now. Kevin Wallace counters that the AG has already proven persistent, repeated fraud in the statements of financial condition, a conclusion Deutsche Bank has not disputed.

— Lisa Rubin (@lawofruby) November 1, 2023

Judge Engoron wants more clarity as to what McCarty relied on in reaching his conclusions. McCarty says he based his calculation on the same term and amount of the loan; what changed is that he used a different interest rate based on what DB gave other parties in the market for…

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 3:05:03 PM +00:00 · Jen Hayden

Now for his calculations: McCarty says that had the Doral loan been based on accurate financial statements, the banks would have made more than $72 million more between 2014-2022.

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 3:01:28 PM +00:00 · Jen Hayden

Questioning investigates what went into that computation.

Recall: This is one exhibit of the report, showing one category of estimate.

— Adam Klasfeld (@KlasfeldReports) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:55:58 PM +00:00 · Jen Hayden

Had Trump’s statements of financial condition more accurately reflected the true value of his assets and liabilities, McCarty explains, the risk premiums for multiple loans would have increased as well. He cites the Doral, the Old Post Office, and Trump Chicago as three examples.

— Lisa Rubin (@lawofruby) November 1, 2023

He acknowledges that banks have historically been willing to loan to high net-worth individuals at low rates because the loans are usually repaid. He also said it’s hard to find “direct comparables” in terms of loans for major real-estate-related transactions posing similar…

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:49:53 PM +00:00 · Jen Hayden

The NYAG's counsel demonstrates the concept with this footnote from the judge's ruling before trial ordering the dissolution of Trump's corporate entities. pic.twitter.com/Ekltu2TDNZ

— Adam Klasfeld (@KlasfeldReports) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:47:44 PM +00:00 · Jen Hayden

Recall the defense has repeatedly argued that none of the banks or other entities that loaned to Trump were in any way injured by those transactions. It’s up to McCarty to demonstrate why that’s a red herring legally and perhaps factually as well.

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:43:11 PM +00:00 · Jen Hayden

McCarty has been offered to opine on the “economic impact” of the false and misleading financial statements at the heart of this case—and on which the remedies Judge Engoron can award largely depend. 2/

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:40:18 PM +00:00 · Jen Hayden

Engoron has qualified him, with the caveat that he will keep in mind that McCarty does not have experience with compilations of financial statements but that they are sufficiently similar, according to McCarty, that he can analyze them.

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:39:27 PM +00:00 · Jen Hayden

Live blog sidebar, Trump’s lawyer seems to think the Secret Service could prevent Trump from going to jail if he was so ordered:

What???

Alina Habba suggests the judge can’t put Trump in jail for violating the gag order because: “He’s protected by the Secret Service. Period.”pic.twitter.com/aQPLqUQxKe

— Republicans against Trump (@RpsAgainstTrump) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:35:08 PM +00:00 · Jen Hayden

NYAG’s Kevin Wallace is now reviewing McCarty’s experience as a litigation expert, in which “nearly all” of the cases involved credit decisions made by financial institutions. He is explaining that as a banker, he was a senior officer who had to sign off on many loans, including…

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:27:45 PM +00:00 · Jen Hayden

(If you’re interested in McCarty’s credentials as a banker, you can read more about him here: https://t.co/eeWc41Guwy)

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:23:31 PM +00:00 · Jen Hayden

And as McCarty takes the stand, Jesus Suarez — who also crossed former Mazars partner and lead Trump outside accountant Donald Bender — is in pole position, so to speak, at the defense table.

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:20:52 PM +00:00 · Jen Hayden

NYAG showed the witness another email: this time, Deutsche Banks' Rosemary Vrablic to Ivanka Trump, dated Feb. 11, 2016.

Subject: Doral

“I spoke to the credit team on the $50mm request and we are thrilled to consider it for you.”

With that, brief direct examination ends.

— Adam Klasfeld (@KlasfeldReports) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:17:33 PM +00:00 · Jen Hayden

2/ Before Don Jr., we’ll see 2 others on the stand. “Witness entering!” an officer yells out. In walks David Orowitz, a former Trump employee, who was involved in the bid to secure a lease to Washington DC’s Old Post Office, which Trump spent more than $200M turning into a hotel.

— Dan Alexander (@DanAlexander21) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:13:56 PM +00:00 · Jen Hayden

Trump attorney Alina Habba apparently got a pep talk on her way into the courthouse. 

Overheard in the elevator: Alina Habba takes a call from Trump. “Hi, sir, I am in the elevator in the courtroom.” Pause. “I will knock them dead.”

— Lisa Rubin (@lawofruby) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:11:56 PM +00:00 · Jen Hayden

Court is now in session.

"All rise."

Trial begins for the day as NYAG's counsel calls David Orowitz, who was the Trump Org's senior VP of acquisitions and development.

— Adam Klasfeld (@KlasfeldReports) November 1, 2023

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UPDATE: Wednesday, Nov 1, 2023 · 2:10:15 PM +00:00 · Jen Hayden

Overnight and early Wednesday morning, Donald Trump has been ranting and raving about the case, Attorney General Letitia James and Judge Arthur Engoron. 

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And away we go!