Donald Trump “arbitrarily” inflated the value of his real estate assets in order to secure favourable insurance premiums, Trump’s former lawyer and fixer Michael Cohen has testified at the former president’s civil fraud trial.
Cohen, who cut ties with the former US president five years ago, is now a key witness in a case brought by Democratic New York Attorney General Letitia James alleging Trump inflated the value of his family companies’ properties. The lawsuit could break up Trump’s business empire.
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Cohen testified that Trump tasked him with increasing the value of his company’s assets “based upon a number that he arbitrarily elected”.
The value of the company’s holdings was “whatever number Mr Trump told us”, Cohen said.
He said he and onetime Trump Organization chief financial officer Allen Weisselberg would mark up line items by hand using red ink in Trump’s financial statements after he told them the numbers were too low.
“He would say, ‘I’m actually not worth $4.5bn, I’m really worth more like six [billion],” Cohen said.
Cohen said that the resulting financial statements would show the assets “had extremely high values with low liabilities in order to secure better insurance premiums”.
During a lunch break, Trump told reporters Cohen was a “liar”.
“We’re not worried at all about his testimony,” said Trump, the frontrunner for the 2024 Republican presidential nomination.
Colleen Faherty, a lawyer for the attorney general’s office, began her questioning of Cohen by reviewing his criminal history in an apparent effort to head off expected attacks by Trump’s lawyers on Cohen’s credibility.
‘For the benefit of Donald Trump’
Cohen in 2018 pleaded guilty to a campaign finance violation and falsely telling Congress that negotiations over a proposed Trump Tower in Moscow ended by January 2016, when in fact the efforts continued until June 2016 – after Trump had clinched the Republican nomination.
“I did that at the direction of, in concert with and for the benefit of Donald Trump,” Cohen said on the stand, referring to his false testimony about the Russia real estate project, which never materialised.
Prosecutors never accused Trump of criminal wrongdoing stemming from his business dealings with Russia.
Trump leaned back in his chair with his arms folded and intently watched Cohen on the stand, occasionally whispering to his lawyers.
Cohen, who once said he would “take a bullet” for Trump, began a three-year prison sentence in 2019 but was released to home confinement the following year during the coronavirus pandemic.
Cohen’s testimony during a 2019 congressional probe of Trump’s finances was the impetus for James’s lawsuit.
Trump has denied wrongdoing and defended the valuations of his properties, saying the case is a “fraud” and a political witch-hunt.
He has occasionally appeared in court over the past month, complaining in inflammatory remarks to reporters that it is a distraction from his campaign.
He arrived on Monday following a campaign stop in New Hampshire and just days after being fined $5,000 by Justice Arthur Engoron, the judge overseeing the case, for violating a gag order.
In September before the trial began, Engoron found that Trump fraudulently inflated his net worth and ordered the dissolution of companies that control crown jewels of his real estate portfolio, including Trump Tower in Manhattan.
That ruling is on hold while Trump appeals.
The trial largely concerns damages. James is seeking at least $250m in fines, a permanent ban against Trump and his sons Donald Jr and Eric from running businesses in New York and a five-year commercial real estate ban against Trump and the Trump Organization.
James’s civil suit is one of many legal woes Trump faces as he campaigns for the presidency. He has pleaded not guilty to four criminal indictments, including federal cases tied to efforts to overturn the results of the 2020 election and the removal of government documents from the White House.