Here's what's at stake in the 2024 GOP frontrunner's civil fraud trial

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Good morning,

If you grew up in the mid-2000s, there’s a chance you can quote almost every line from the 2004 comedy Mean Girls, which gave us some iconic quotes like “On Wednesdays we wear pink,” “You go, Glen Coco,” and, of course, “It’s October 3rd.”

We’ll stop there. But we hope your day is fetch.

Mosheh, Jill, & Courtney

🗞 TWIST IN TRUMP’S CIVIL LAWSUIT

Former President Trump was back in court yesterday for a $250 million civil fraud lawsuit accusing him, his two sons, and Trump Organization execs of overvaluing their assets to obtain more favorable bank loans and lower insurance premiums.

THE DEFENDANTS
In September 2022, Trump and three of his children — Don Jr., Ivanka, and Eric Trump — along with several other executives from The Trump Organization were sued by New York Attorney General Letitia James. Her office accused them of vastly inflating their wealth and the values of their properties on financial statements.

This summer, a New York appeals court dismissed allegations against Ivanka Trump — but said the claims against Trump, Donald Trump Jr., and Eric Trump were serious enough to take to trial.

THE ALLEGATIONS
The Trumps and officials from the Trump Organization are accused of falsifying business records between 2011 and 2021 to exaggerate both their wealth and property values (Trump Tower penthouse, Mar-a-Lago estate, and various office towers and golf clubs) by millions of dollars in order to secure more favorable loans. They have denied wrongdoing.

KEY PLAYERS
Names to know:

New York AG Letitia James: Her investigation in this case began in 2019 after Trump's former attorney Michael Cohen testified that Trump routinely lied about his wealth on important financial documents.
- “Claiming that you have money that you do not have does not amount to the art of the deal, it's the art of the steal,” James said.
The judge: The judge presiding over this case is Arthur Engoron — a Democrat first appointed by then-Governor Andrew Cuomo to the New York Supreme Court, 1st Judicial District, in 2013. He ran unopposed for the position in 2015.
Kevin Wallace: Leading the Attorney General's team of lawyers
Christopher Kise: Lawyer for Trump

WHAT BOTH SIDES ARE SAYING
The prosecution and defense presented their cases yesterday during opening arguments.

Kevin Wallace says the math ain’t mathin’. Prosecutors will attempt to prove the defendants intentionally submitted false financial statements to inflate their assets.
Chris Kise countered, saying the defense has a slew of experts on deck who can vouch for the accounting used to reach those valuations. He also said the foundation of the case is built on claims made by a “serial liar,” referring to Michael Cohen.

BOMBSHELL ON DAY ONE
When Trump arrived at the courthouse yesterday, he spoke to the media and launched an array of verbal attacks against both NY AG Letitia James and Justice Engoron. He slammed the allegations as corrupt and a sham: “What we have here is an attempt to hurt me in an election."

The shift: As he was leaving court yesterday afternoon, Trump continued attacking James — but said the Judge was “very fair.”

What changed? According to Trump and his lawyers, Judge Engoron decided to throw out any business or real estate transactions that occurred prior to 2014. That means up to 80% of the transactions in question will no longer be considered in the trial.

The move is significant because fewer transactions = less damages. The amount of money Trump will owe in penalties is calculated based on the number of transactions. If 80% of those transactions are no longer in play, the $250 million AG Letitia James is seeking in damages will be drastically reduced.

POSSIBLE CONSEQUENCES
The judge in this case, Justice Arthur Engoron, ruled last week that AG James had proven Trump and his co-defendants fraudulently inflated their assets. That means the trial will largely concern how much they must pay in penalties. Because this is a civil lawsuit and not a criminal case, there is no possibility of jail time. He could face significant financial and business penalties, though.

AG James was seeking $250 million in fines, along with sanctions that would severely limit the Trumps’ ability to do business in New York (a permanent ban against Trump and his sons from running businesses in New York, and a five-year commercial real estate ban against Trump and The Trump Organization).

WHAT’S FOR LUNCH?
A concerning amount of Happy Meals. 🍟

✔︎ Mo News Reality Check: This is a bench trial, meaning there’s no jury — so Justice Engoron will ultimately decide if the defendants are liable and which penalties they will face. The judge asked the attorneys to clear their calendars through December, but it’s TBA if the trial will actually last that long.

Will Trump testify? He might. More than 150 people, including Michael Cohen, could testify.

⏳ SPEED READ

🚨NATION

📌 Dianne Feinstein to lie in San Francisco City Hall on Wednesday ahead of funeral service (USA TODAY)

📌 Rep. Matt Gaetz triggers vote to oust Kevin McCarthy from speaker's office (NBC NEWS)

📌 US Supreme Court rejects challenge to New York rent control system (BLOOMBERG)

📌 Grizzly bear attack in Banff National Park leaves couple, dog dead (FOX NEWS)

📌 Nobel Prize goes to scientists behind mRNA Covid vaccines (BBC)

🌎 AROUND THE WORLD

📌 U.N. Approves Kenya Mission to Haiti (NY TIMES)

📌 E.U. makes historic show of support for Ukraine after U.S. budget deal snub (NBC NEWS)

📌 Pope Francis softens Vatican’s ban on gay blessings (WSJ)

📌 The UAE holds a major oil and gas conference just ahead of hosting UN climate talks in Dubai (AP NEWS)

📱BUSINESS, SCIENCE & TECH

📌 Crypto goes on trial, as Sam Bankman-Fried faces his reckoning (NY TIMES)

📌 Microsoft CEO says Google’s deals with Apple led to its dominance (WASHINGTON POST)

📌 UAW strike against Ford, GM, Stellantis cost US economy nearly $4B so far (FOX BUSINESS)

📌 Abercrombie & Fitch ex-CEO Mike Jeffries accused of exploiting men for sex through organized operation (CBS NEWS)

🎬 SPORTS & ENTERTAINMENT

📌 Beyoncé has announced a film for the historic Renaissance tour, and Twitter is a storm (BUZZFEED)

📌 Tom Hanks says dental plan video uses ‘AI version of me’ without permission (CNN)

📌 The Hollywood writers strike is over, but the actors strike could drag on. Here's why (NPR)

📌 Stevie Nicks, Fleetwood Mac icon, now has her own mini-me Barbie (CNN)

🗓 ON THIS DAY: OCTOBER 3

O.J. Simpson tries to fit a leather glove on his hand that was allegedly used in the murders of Nicole Brown Simpson and Ronald Goldman

1935: Italian forces led by Emilio De Bono, under orders from Benito Mussolini, invaded Abyssinia (Ethiopia) in hopes of building a “new Roman Empire.”
1990: After four decades of Cold War division and with pressure from the German chancellor Helmut Kohl, Soviet leader Mikhail Gorbachev agreed to a unified Germany within NATO, leading to Germany's reunification this day in 1990.
1995: One of the most sensational trials in U.S. history ended as a jury found O.J. Simpson not guilty of murdering his ex-wife Nicole Brown Simpson and her friend Ronald Goldman.
2003: School of Rock, starring Jack Black - premiered on this day.