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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
I feel a little bad about this, but whenever I see you complaining about Trump-persecution, it biases me in the other direction. As if the fact you felt a need to explain is evidence against his behavior. I know this isn’t really rational; it’s a reflex from years of apologetics.
I’m aware that courts, including NY in particular, have gone after Trump for stupid gotchas. Is this really one of them? The judge is granting a summary judgment in part. He gives detailed reasons why plaintiffs’ arguments were credible, while the defendants have consistently misrepresented their position. Throwing that out on the basis of one sloppy valuation is the definition of an isolated demand for rigor.
It looks like Trump has employed his traditional legal strategy of Throwing Shit at Walls. Dismiss this, dismiss that, usually in direct contradiction to precedent or to rulings earlier in the same case! See the fascinating section “Arguments Defendants Raise Again.” None of this inspires confidence.
If you’re going to do fraud, shouldn’t you avoid obvious mistakes? Mistakes like claiming a 3x overstatement of square footage was “subjective,” or that Mar-a-Lago was totally worth $1.5B, or that the SFCs could include a 15% premium for the “Trump brand” while simultaneously stating that they include no brand value. Easy things to avoid, right?
This isn't even close to fraud. It is just basically random speculation by him and banks. Everything is estimates made by people without even 12% knowledge of what reality is. These cases shouldn't be legal because they are treating art like a science. Its basically punishing a person extra above the bet they wagered just because. "Oh you put $500 on the Bills to beat the Redskins and Jim Kelly lost again on a fluke field goal, well actually we are taking another $2500 from you because reasons."
First of all, just by him. The banks (and other business partners) are the ones being defrauded. That's sort of the point.
Second, if it were random speculation, his estimates would be under the true value as often as they were over the true value.
Do you think that's true?
It's actually pretty easy to notice random noise, it tends to follow a well-defined distribution.
When every number over decades comes out heavily biased in the same direction, the direction that benefits you and hurts the people you're dealing with, that's not random noise. That's a pattern of misdirection.
Which is what this case is about.
None of them alleged that during the course of business. They all got paid. The numbers were arbitrary.
Random was the wrong word. The right word is, self serving normal stuff that businesses do and tax people have to go along with 99.99999999% of the time or the state's economy collapses.
Didn't he brag about how often he files bankruptcy to get out of debts? Haven't his companies filed for bankruptcies more often than anyone else's in the US? Haven't there been hundreds of stories about his organizations not paying their bills and obligations?
I haven't gone over all the statements in the case to sort out the specific claims and charges on this particular valuation, but the idea that everyone got paid and no one was hurt by these practices feels leaves me skeptical.
However, part of the reason I'm not investigating that in more depth is because it doesn't matter; you can in fact be defrauded even if you don't lose money. If that sounds weird, remember that all of finance is about the expected value of an investment.
If Trump overstated the worth and stability of his holdings, then any loans he took out were riskier than the banks thought. The expected value of those loans was lower than the banks thought, and if they'd known the truth they might not have made those deals, or might have charged higher interest to compensate (which is a material loss even if the loans were paid back).
Drunk driving is illegal even if you don't hit someone, because it increases the chances you will hit someone. Similarly, lying about how risky it is to make a loan to you is fraud, even if you manage to pay back that particular loan.
Indeed, many things are both illegal and common, and enforcement of pretty much all crimes is spotty and arbitrary at best. That's a sad state of affairs and I think we should solve it with fewer laws; nonetheless, this is not a good reason to decry the law being enforced correctly one time, unless you decry it all the other times too (isolated demands for rigor etc).
That said, there's still such a thing as matter of degree; this was a very long pattern of very big lies on very big deals, a pretty big outlier from the common range for this type of thing.
Again, I agree that it's common to round your $146k income up to $150k when applying for a mortgage. This was a lot bigger than that.
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Did you even read the document?
It contains a long list of dramatic, knowing exaggerations. The square footage of his apartment is not a bet. The outside valuations were not bets. He hired appraisers, got their assessments, then lied about the results when it came time to fish for loans. How is that a bet?
I guarantee you that the various appraisers cited in this case know more about the “reality” of these properties than you or anyone else who has become a sudden real estate expert.
I very much doubt there is anything like an expert in unique property values.
Funny, I’m seeing quite a few chiming in on how much MAL is totally worth.
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If your defense of Trump is that he made factual claims to secure loans based not on facts, but rather "random speculation," then it seens to me that, with friends like you, who needs enemies?
Pretty sure his friends are all the banks that got paid back because he did a normal business thing that they also do and NY state law is just stupid and as applied to this case would, if applied everywhere, would turn NY State into 2009 Greece.
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So claiming his Trump Tower apartment was 3 times bigger than it is was just random speculation?
To me, that is the fraud and not the estimates. The issue is since the judge went all crazy on the valuations I don’t know if the rest of the factual record is accurate and don’t really have the inclination to review the record. I’ll just wait for the appeals and see what happens.
The factual record in this example is accurate. The Judge accurately cited a real valuation by the Palm County assessor.
You may think that the judge is playing rhetorical games to exaggerate their case, but that's a rhetorical issue. The Judge did not representing matters of fact in any way in this example, so there's no reason this should make you doubt other matters of fact cited throughout the ruling.
But that’s the whole thing — a validation by an assessor isn’t a fmv assessment. It would be akin to the judge stating the value of the company is based off of net equity in a balance sheet.
If that were the only factor in her judgement on the matter, yes.
But it's one sentence out of several paragraphs of the ruling on that matter, which is itself just a summary/reference to many many more pages of evidence, filings, and proceedings.
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Where’d the judge go crazy?
He’s citing appraisals from a variety of firms, retained by everyone from Trump to the banks. Then he concludes, yeah, Trump’s guys had these appraisals when they made statements to the contrary. I don’t think he made up any numbers himself.
The existence of these appraisals is factual. Their contents are public record; I don’t think the plaintiff was lying about them. Are you arguing that, if the appraisals were so unrealistically low, lying about their contents was legally correct?
Citing a tax assessors valuation is going crazy because tax assessors aren’t really based on FMV
If you’re throwing out those…what do you think the appeal is supposed to turn up?
This ground has been trod. Exhaustively, judging by the specific sanctions applied to defendant’s counsel. The judge found it unconvincing, perhaps because several of the appraisals were not tax assessments. At least one specifically calls out FMV.
I can’t help but feel like an appeal could confirm all the same things, address your complaint specifically, and you’d turn around and mine for another factoid that favors Trump.
You can feel that way. Kind of a weird thing to say given that I’ve noted there does seem to be potential fraud here (and have said I believe he is guilty on the documents case). But yeah I’m just a mindless Trump fan boy.
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Real estate square footages are so often exaggerated
I’ve noticed that rental units from a professional complex always seem small compared to an identical unit rented by an owner in a condo building.
There are some reasons how sq footage can be counted different. You can measure every room and get a number (excludes the carpentry work) or just measure what it would be as raw space. Commercial has even more leeway on counting space (outside hallways to offices I believe can be counted differently).
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Care to elaborate?
I did see Beckman v Wells Fargo, where the broker advertised twice as much lakefront as the property really had. They ended up protected from liability because they relied on county and bank records.
If you can show me where a suit was dismissed for the broker claiming square footage was “subjective,” as the Trump team attempted, I’d love to see it.
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