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The latest Trump legal woes comes once again from NY where a judge ordered his business dissolved for fraud. Nobody losts money and it came down to some misstatements. I haven’t read the full case, but the judge on a high profile part of the case is completely off. Not even ballpark off.
He valued Mar-a-Lago at 17-25 million. I texted a broker in the area and he told me 100 million for an ocean acre and 25 million for a non-ocean acres. Mar is between 17-20 acres depending where you look online. Palm Beach has gone up a lot since COVID so maybe divide those numbers by 2 since Trump made his filling. He listed the property at 450-650 million. Without doing a full underwriting (maybe zoning issues where it couldn’t be worth the raw land price) it still appears Mar is worth a lot of money.
If you are going to do lawfare shouldn’t you avoid obvious mistakes? It’s easy to see a headline and write this whole case off as political. It weakens public perception of all other cases if you make mistakes that are this stupid.
If I am remembering this case correctly he did likely violate the law and include some statement that were obviously false but in a category that no one besides Donald Trump gets prosecuted for. So the case of Mar-a-Lago violates a principle of maintaining plausible deniability.
Edit: @AshLael looked up the prosecutors brief and it appears they did not use the tax assessment for valuation purposes. Which would negate my main point. The judge has a history of making stuff up against real estate developers and being later reversed. It’s quite possible this judge hates developers and just does stupid things.
https://twitter.com/goodguyguaranty/status/1707232241925910944?s=46&t=aQ6ajj220jubjU7-o3SuWQ
https://nypost.com/2023/09/27/mar-a-lago-judges-developer-hating-past-is-a-big-win-for-donald-trump/
Which would change the ruling and it’s citations to much more of all developer are bastards story (which is culture war) than my why are you lawfaring stupidly story
It is not correct to say the judge is the one valuing Mar-a-Lago at 17-25 million. The judge is just quoting the valuation from the Palm Beach County Assessor:
You can read the full ruling here. The ruling also goes over a bunch of properties Trump owned where he lied about easily verifiable facts to inflate valuations, like claiming his Trump Tower triplex was 30k sq ft when it was actually 11k sq ft.
Seriously, just skip down to page 20 and start reading. For property after property Trump was in possession of third party appraisals of his properties that he inflated to many times their actual value when reporting their worth to other parties.
Seven Springs:
So he inflated the value of his property by almost 10x what an appraiser said it was worth.
40 Wall Street:
Please tell me how it isn't fraud to lie to banks you're seeking a loan from and claim your assets are worth many times what they are actually appraised for.
I don’t disagree that some of the other valuations look off to me. My point is why the exaggeration on Mar-a-Lago which is the easiest one for the average person to look up and conclude the judge is an idiot. Property taxes in perhaps all locations but certainly many are not marked-to-market or anything close to market. They are often well below market (sometimes above market too often in poorer areas). The goal is that if one house is worth 20 million (market) and another is worth 10 million (market) that the assessed values would have a similar 2x to apply mileage rates too. It just seems silly to me they would even quote that. I’m not sure why the prosecutor would even feed that data to the judge because it’s not a market value and makes them look stupid.
He probably did knowingly exaggerate for his own self-worth ego. The key thing here is the statements on these values was not a key point to underwriting the loans and had no effect on any loan terms. There is no victim here the banks would have done the same deals regardless of what he said on the forms. It’s like if I call Amex to get a credit card and I asks for a $10 million limit. My portfolio lets even call it public markets so exact values is worth $1 billion but I tell them $2 billion. The bank doesn’t care I exaggerated.
I briefly read through the ruling so I might have missed it, but how are you certain the over-valuation of these properties didn't affect the terms or availability of any loan/insurance/financial agreement?
The bank absolutely does care about your debt-to-asset ratio for a multitude of reasons, but more importantly they care if you're a liar.
A $10 million loan to someone with $1-2b in assets is likely a low risk for default. A $10 million loan to someone who lies on their financial statements is a reputational and financial risk.
He wasn’t directly borrowing against these properties. The debt was on other properties that were underwritten. High other assets only come into play if something goes wrong on those properties. So it could matter but if the loan was debatable I would assume the banks would underwrite the quality of his personal guarantee more than just rubber stamping what he submitted.
Right - and his personal guarantee is based on the valuation of his assets, which he overstated.
Find me one case with precedence here where a little exaggeration on this specific form with zero victims was pursued.
It's going to be pretty hard to find cases where there's no egregious harm because they would normally go undetected. And once there is harm, your company is probably insolvent and not worth pursuing by OAG.
If you're pointing out that this only got investigated because it's Trump, I agree. Unfortunately for him, the investigation uncovered a crime.
Actually this is in civil court not criminal which heavily indicates how weak of a case it is. Beside it being very rare for a civil case that isn’t origionating from a victim.
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