(Bloomberg) -- Former President Donald Trump’s sons took turns on the witness stand disavowing any role in preparing financial records at the center of New York’s $250 million civil fraud suit against them and their father, even when evidence suggested otherwise.
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Donald Trump Jr. and Eric Trump, who help run the family real estate empire, are accused of conspiring to inflate the value of their father’s assets by as much as $3.6 billion a year to get better terms from banks and insurers. They both answered questions Thursday under oath by lawyers for New York Attorney General Letitia James, who filed the lawsuit last year.
Donald Trump Jr., 45, said he certified but never verified the accuracy of his father’s annual statements of financial condition, which were used to tout his net worth in transactions worth hundreds of millions of dollars. “I would be comfortable trusting my team” of accountants and lawyers, who advised him to sign off on the documents, he said in a Manhattan courtroom.
The proceeding, in its fifth week, is one of six trials the former president faces as he seeks to return to the White House in 2024. In the Manhattan case, the judge already ruled the financial statements were fraudulent, focusing the trial on who was involved in creating them, how they were used and what penalties should be imposed. Trump, who’s set to testify Monday, denies wrongdoing.
Read More: Trump Directed Bogus Asset Inflation, Ex-Fixer Cohen Says
The former president, who did not attend the trial to watch his sons testify, weighed in on social media: “So sad to see my sons being PERSECUTED in a political Witch Hunt by this out of control, publicity seeking, New York State Judge, on a case that should have NEVER been brought.”
Donald Trump Jr. ended his testimony Thursday without being cross-examined by defense lawyers. Eric Trump will return to the stand Friday for additional questioning by the state. Ivanka Trump is expected to be the final state witness as soon as Nov. 8, two days after her father.
Trump and his sons are all expected to testify again later in the trial during the defense portion of the case, when their lawyers can pose questions that may portray them in a better light and rebut the state’s allegations. The trial is scheduled to end Dec. 22.
Eric Trump, 39, echoed his brother on the stand Thursday when he was presented with internal Trump Organization communications in which he discussed the value of certain key assets. “I didn’t know anything about it until this case came to fruition,” he said of his father’s annual statements of financial condition.
But the younger Trump son backtracked after being presented with an Aug. 20, 2013, email from Trump Organization Controller Jeffrey McConney asking him for the value of his father’s Seven Springs estate in New York, so the value could be added to Trump’s statement of financial condition.
“So you did know about your father’s annual statements of financial condition” as of that date, “didn’t you?” asked Andrew Amer, a lawyer for James.
“It appears that way, yes,” Eric Trump responded.
“And he told you he needed the value of Seven Springs for that annual statement of financial condition,” Amer said.
“That’s what it says, yes,” Eric Trump said.
He raised his voice and spoke forcefully when pressed about the financial statements by the state lawyer. “We are a major organization, a massive real estate organization,” Eric Trump said. “Yes, I am fairly sure, of course, that we would have had financial statements. Absolutely.”
Earlier, Donald Trump Jr. testified he has no recollection of how the asset valuations used in the financial statements were prepared by the company’s accountants at Mazars USA LLP, despite documents displayed at trial showing he personally signed off on them.
“I relied upon Mazars and our accounting team to tell me” about the preparation of a 2017 Trump financial statement, Donald Trump Jr. told the judge, who is hearing the case without a jury. “That’s why we have accountants.”
But earlier in the trial, Mazars accountant Donald Bender testified he relied on the Trump Organization to provide accurate valuation data and that he wouldn’t have signed off on the financial statements if he had known they were inflated. Bender said under the terms of the contract with Trump, Mazars wasn’t required to verify the appraisals.
Donald Trump Jr. also said he had no recollection of how he responded when he was made aware in 2017 that one of his father’s biggest assets — his Trump Tower penthouse apartment — was being wildly overvalued.
A lawyer for the state showed him an email exchange from March 2017 in which Forbes magazine explained that the apartment his father claimed was 30,000 square feet was about one third that size.
“Insane amount of stuff here,” Donald Trump Jr. wrote in an internal Trump Organization response to the Forbes email.
The state alleges that Donald Trump Jr. ignored the error days later when he verified to Mazars that his father’s 2016 statement of financial condition, which falsely valued the penthouse at over $300 million, was accurate. He also sent the statement to one of the family’s biggest lenders, Deutsche Bank AG.
Trump, 77, has argued the state’s case is illegitimate because he repaid all the loans and no banks lost money. The judge previously ruled that argument doesn’t absolve Trump from using fraudulent documents in business transactions.
The judge in the case, Arthur Engoron, threatened to expand a gag order he imposed last month barring Trump from posting comments about any member of his staff on social media, including his law clerk. The former president has been fined $15,000 for twice violating the order.
The threat came after Trump lawyer Chris Kise made a reference late Thursday to Engoron’s clerk passing him a written note — a common occurrence during the trial and something the defense team has complained about before.
“Mr. Kise, all joking aside, do not refer to my staff again,” said Engoron, who was visibly angry, adding that he suspected misogyny toward his female clerk. At one point, the judge was shouting.
“The person who’s sitting alongside me, she’s my principle law clerk, she’s helping me and the process correctly,” the judge said. “I’m pounding the table. I have an absolute right, an absolute unfettered right to get advice from my principle law clerk.”
Kise insisted he was merely advocating for his client and pointing out what he perceived as “bias” from the judge’s clerk.
(Updates with comments by judge.)
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