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Fraud conspiracy is bigger than just Trump

By September 28, 2022November 29th, 2023CNN, News, Trump

Former federal prosecutor Shan Wu provides his insight into the fraud case against Donald Trump.

Regular readers of our blog will know that Shan is frequently tapped by national media outlets for his take on prominent legal news stories, from issues facing the AAPI community, to the ongoing legal battle between the state of New York and the Trump dynasty.

This week, we’ll be delving into the latest developments in the case against Trump, and Shan’s take on what they mean for the future of our legal system.

Tax fraud case is open and shut

On Wednesday, September 21st, New York Attorney General Letitia James announced a civil lawsuit against former President Donald Trump, the Trump Organization, executives of the business, and three out of four of Trump’s adult children.

The lawsuit alleges a decade-long scheme to defraud New York businesses, banks, and the government, most prominently by overinflating the value of Trump organization assets.

In an interview for CNN last Wednesday, Shan described the tax fraud case against the Trumps as open and shut.

“Obviously, there’s tax fraud going on given the massive inflation of these values… There are facts you can’t spin your way out of. I mean, claiming that the penthouse, for example, is three times the square footage that it is, there’s no way that you can spin your way out of that.”

Attorney General James has announced that she plans to make criminal referrals to the Southern District of New York and the Internal Revenue Service. In that same interview, Shan had this to say about the potential for criminal charges against the Trump organization:. 

The evidence that [James] has amassed for this suit, which was very hard-fought to get it after a lot of litigation, would provide the basis for those criminal actions, tax fraud… So she’s giving them a very valuable head start on all this evidence they have taken so long to gather.

In Shan’s view, things are not looking great for Trump’s side of the case.

Banks and businesses turned a blind eye

But according to Shan, there’s more to this story than just Trump and his family being fraudulent. In an article for the Daily Beast published the day after this lawsuit was announced, Shan highlighted three businesses that have been caught up in the controversy around Trump’s alleged fraud scheme.

  • Cushman Wakefield is a real estate firm that appraised several of the overvalued properties that were highlighted in this lawsuit. During the extensive legal battles to obtain information for this lawsuit, the firm was held in contempt by the court for refusing to hand over documents.
  • Mazars is Trump’s accounting firm, and since the lawsuit was filed, the firm has claimed that they did not audit the financial statements prepared for Trump.
  • Deutsche Bank is one of Trump’s favorite loan sources, and has also been involved in the fact-finding process in preparation for this lawsuit.

This lawsuit does not accuse any of these companies of wrongdoing, and indeed, James even described Deutsche Bank as being “fully cooperative” throughout the process. 

But according to Shan, there’s more to the story here. Among Trump’s likely legal defenses to the lawsuit will be that companies such as these three would not have relied merely upon financial statements – meaning that they were too smart to be defrauded. Trump’s legal team will use this to argue that Trump never engaged in fraud to begin with.

But more accurately, Cushman Wakefield, Mazars, and Deutsche Bank are just three examples of the many businesses Trump has dealt with over the years who all may have turned a blind eye to suspicious valuation and unethical practices. So long as they were making money with Trump, the theory goes, they were happy to go along with his schemes.

A tale of two legal systems

In a press conference announcing this lawsuit, Attorney General James poetically characterized the fraud allegations as describing “a tale of two legal systems. One for everyday working people and one for the elite, rich and powerful.”

The truth of James’s words are undeniable. From the Wall Street firms responsible for the 2008 financial crisis to the fossil fuel companies poisoning the planet, our legal system too often protects the rich and powerful from facing any legal consequences for their actions that harm millions. Meanwhile, poor people, and especially people of color, languish in prison for decades on nonviolent drug possession charges.

However, as Shan argues in his article, what’s ironic about such a populist framing of this issue is that it mirrors the populist language that Trump and his ilk use to rally support for right-wing causes.

Trump’s appeal to so many plays upon what has been described as a “cult of democratic aspiration,” meaning he wears both the appearance of the common man and that of the privileged elite—a costume that allows him to be a stand-in for all those who yearn for what they don’t have.

It’s important that we don’t let this obfuscation of the issues cloud our perception. The real victims of cases like these are the working people who suffer financial hardship at the hands of the wealthy elite. It’s important that we use our legal system to hold them accountable for their actions. Hopefully, this civil lawsuit is the beginning of an attempt to do just that with the Trump dynasty. 

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