NY AG Letitia James drops the (civil) hammer {On Trump & Family} [9/21/2022]

[Northern_Piper]

@k9bfriender

You are not the attorney, so you are not restricted by privilege.

I think that in most circumstances, you could not waive the other party’s privilege, the attorney would not be able to discuss what was said, but there’s nothing stopping you from ratting them out.

It will depend on the law of privilege in a particular jurisdiction. In some places, the privilege is an evidential one: it’s just that neither the lawyer not the client can be forced to disclose the legal advice given, but if the advice is known from some other route, it may be admissible.

But in other places, the privilege is more substantive law: the advice given is inadmissible in court, no matter the source. If the jurisdiction where the events occured has the substantive approach, @Horatius may not be able to testify, even if he’s not the holder of the privilege. Laws vary.

To take Horatius’s hypothetical, it may also depend on why they were in the room with the other person and the lawyer. If Horatius is a separate client of the lawyer, it could get very complicated; who is the lawyer giving the advice to, and why are two people there? This is why a lawyer doesn’t normally give advice to two different clients at the same time, unless there is a clear co-counsel agreement between the clients, addressing the privilege issue.

If Horatius is there because they’re an employee of the person getting the advice, then the situation is clearer: Horatius may equally be bound by the privilege, because of their employment relationship. The privilege would not be of any force in a large operation if any employee is able to waive the privileged information. A large operation receiving legal advice needs to be able to keep it confidential, even if the advice was not given directly to a particular employee, and will generally be protected by the courts.

That doesn’t mean that everything that is said in a meeting with a lawyer is privileged; it’s not a Cone of Silence. It’s only the legal advice: the request for advice by the client, the disclosure of facts that underlie the request, and the advice back from the lawyer. But comments from other people in the meeting, unrelated to the legal advice and which don’t disclose the legal advice, likely would not be covered by privilege.

So suppose you have this conversation, with only three people in the room:

Big Boss: "Lawyer Jane, thanks for coming. Horatius here is my trusted employee and familiar with the file. I want to do Operation X. [Detailed outline of facts follows]. Is that legal?

Lawyer Jane: “No, Mr Boss, that’s not legal at all. I strongly advise you against doing it. You could be in a world of trouble. You would probably be committing a crime [detailed legal advice follows].”

Big Boss: “Thanks for the advice. Please send me your bill.”

[Lawyer Jane leaves the room.]

Big Boss: “Horatius, I want you to do Operation X - set it in motion, right away.”

Horatius: “Boss, I’m really uncomfortable with this proposal. I don’t want to do Operation X. We’ve just heard from Lawyer Jane that it’s likely illegal.”

Big Boss: “I don’t agree with Lawyer Jane’s advice. Start putting Operation X into play, as soon as you leave this meeting.”

Horatius: “I quit. I’m not doing something illegal. Find someone else to do Operation X.”

Horatius later finds out that the next one in line in the office did start up Operation X for Big Boss. Horatius goes to the police. Big Boss gets charged after an investigation. Here’s what Horatius would likely be able to testify to:

Big Boss: "So, Lawyer Jane, thanks for coming. Horatius here is my trusted employee and familiar with the file. I want to do Operation X. [Detailed outline of facts follows]. Is that legal?

Lawyer Jane: “No, Mr Boss, that’s not legal at all. I strongly advise you against doing it. You could be in a world of trouble. You would probably be committing a crime [detailed legal advice follows].”

Big Boss: “Thanks for the advice. Please send me your bill.”

[Lawyer Jane leaves the room.]

Big Boss: Horatius, I want you to do Operation X - set it in motion, right away."

Horatius: “Boss, I’m really uncomfortable with this proposal. I don’t want to do Operation X. We’ve just heard from Lawyer Jane that it’s likely illegal.”

Big Boss: “I don’t agree with Lawyer Jane’s advice. Start putting Operation X into play, as soon as you leave this meeting.”

Horatius: “I quit. I’m not doing something illegal. Find someone else to do Operation X.”

By this approach, Horatius is able to testify to his conversation with Big Boss, so long as nothing he says discloses the legal advice given by Lawyer Jane, in response to the request by Big Boss for legal advice.

Highly simplified, of course, and simply a hypothetical for discussion purposes on a matter of public interest. Not meant as legal advice. Laws vary considerably from place to place, and I’m just some shmoe on the interwebs.

[Northern_Piper]

@Shoeless

I think this is the key. It’s not that they misrepresented the value of a property, it’s that they overvalued it for the purposes of acquiring loans, but undervalued the same property for tax purposes.

As I understand it, the AG’s action is brought by the state of New York for tax fraud, correct? If so, she’s not acting for the banks, so not claiming civil fraud against the banks? It’s just that the over-valuation for the purpose of getting a loan is a fact demonstrating the under-valuation for tax purposes is fraud on New York state?

[MagicEyes]

@Lance_Turbo

I would pay to witness his name coming off that building live and in person.

I need to remember to get a bottle of champagne so I’m ready when that happens. I hope it’s livestreamed.

[DesertDog]

@Northern_Piper

Yes, putting a disclaimer on it doesn’t make you immune from the law of fraud.

“Are you a cop? 'Cause you have to tell me if you’re a cop!”

[Northern_Piper]

[Dr.Winston_OBoogie]

@Procrustus

And at least one guy, Michael Cohen, is happy to testify that Trump did it intentionally. If you can get someone with a little more credibility (in Trump’s circle?) to say that, then Trump is toast

So THAT’S why Trump hires crappy attorneys - none of them can credibilly testify against him!

[Mr.Duality]

Allen Weisselberg, the Trump Organization CFO who pled guilty to tax fraud and is cooperating with investigators, could be that someone.

[Northern_Piper]

NYT article about the state statute which the AG is using; apparently it was specifically designed to enable the AG to bring claims against large companies accused of fraud; was enacted at the request of AG Jacob Javits 70 years ago.

Here’s one of the key passages from the article:

The power, he said, stems largely from a relatively low bar to proving fraud. In these cases, the attorney general’s office does not have to show that defendants intended to defraud anyone or that their actions resulted in any financial loss. It can make a case based solely on significant misrepresentations or deceptive practices.

The law also provides for defendants to disgorge their ill-gotten gains, giving the attorney general considerable leverage in potential settlement negotiations before a case goes to trial. The lawsuit against Mr. Trump seeks the $250 million that it contends he reaped through his deceptions, and asks a judge to essentially run him out of business in the state.

Trump Is Battling a New York Law Used to Take on Corporate Giants (Published...

[Chronos]

What if, in the course of the criminal investigation, Big Boss says “I consulted with Lawyer Jane, and she told me that Operation X would be legal”. Would either Lawyer Jane or Horatius be allowed to refute that claim?

What if, instead, Big Boss didn’t name Lawyer Jane specifically, but just said “I consulted with a lawyer”?

Are Horatius and/or Lawyer Jane allowed any workarounds? Like, could Lawyer Jane say “If anyone had asked me about such an operation, my reply would have been to say that it is illegal”? If Horatius is questioned about why he quit the project, could he say that it was because he believed the project was illegal, without saying that he believed that because of Lawyer Jane’s advice?

[Atamasama]

@Chronos

What if, in the course of the criminal investigation, Big Boss says “I consulted with Lawyer Jane, and she told me that Operation X would be legal”.

That sounds to me like a client waiving privilege.

(IANAL)

[Peter_Morris]

@Chronos

What if, in the course of the criminal investigation, Big Boss says “I consulted with Lawyer Jane, and she told me that Operation X would be legal”. Would either Lawyer Jane or Horatius be allowed to refute that claim?

IANAL

My understanding is that attorney-client privilege lies with the client. If a client waives privilege the lawyer doesn’t have to keep silent. If a client voluntarily makes a public statement about consultations with his lawyer, then privilege has been waived and the lawyer is free to reply. (With respect to that specific consultation. Other lawyer-client discussions remain privileged.)

[Procrustus]

@Peter_Morris

Other lawyer-client discussions remain privileged.)

It depends. If those other conversations are on the same topic, a judge might rule that they’re waived too. The rest of your post is correct.

Saying the lawyer “is free to reply” is true. But they could also be compelled to reply if called to testify and the privilege no longer exists.

[Northern_Piper]

@Chronos

What if, in the course of the criminal investigation, Big Boss says “I consulted with Lawyer Jane, and she told me that Operation X would be legal”. Would either Lawyer Jane or Horatius be allowed to refute that claim?

Big Boss has waived the privilege by purporting to say what his lawyer’s advice was, so I would think the LEO would be able to inquire into what happened at the meeting. However, lawyers are very reluctant to break privilege, so it might need a ruling first from the Law Society (or local equivalent). There’s also an exception to privilege (at least in my jurisdiction) where if the client publicly misrepresents what the legal advice was, the lawyer is permitted to clarify, but again, this is a tightly controlled exception.

Don’t know about Horatius in this example; again, if Big Boss is fighting hard in court, he might argue a contractual requirement that his employees not disclose business matters learnt in the course of their employment. The investigator might need to get a ruling from the court as to what Horatius can say.

What if, instead, Big Boss didn’t name Lawyer Jane specifically, but just said “I consulted with a lawyer”?

Probably too vague to count as waiver; the next logical question an investigator would ask would be “What did the lawyer advise?” If Big Boss refuses to comment, claiming privilege, probably can’t be forced to disclose, but then the claim of consulting with a lawyer is just fluff.

Are Horatius and/or Lawyer Jane allowed any workarounds? Like, could Lawyer Jane say “If anyone had asked me about such an operation, my reply would have been to say that it is illegal”? If Horatius is questioned about why he quit the project, could he say that it was because he believed the project was illegal, without saying that he believed that because of Lawyer Jane’s advice?

For lawyer Jane, no. That’s an attempt to get her to disclose her legal advice.

For Horatius, on the facts of the hypothetical, probably no, because the next question asked by the investigator or by the prosecutor in court would be “And why did you think it was illegal?” Given the context that he was in the meeting with the lawyer and the client, and heard the legal advice, it would be an obvious inference that he was basing it on the legal advice, unless he could show some completely independent reason why he thought it was illegal.

Again, this is all just hypothetical, law-school type discussion, to outline this area of the law; no legal advice on my part.

[glowacks]

The standard disclaimers that can be found on unaudited financial statements are there to remind the people that rely on them that they are management’s best guesses, and to not hold management responsible if their best guesses turn out to be wrong. Thus, the problem mainly lies when management reports something on their financial statement that is not their best guess, but is intended to deceive the readers of the financial statement.

I don’t understand why anyone working with the Trump Org on their scale of business wouldn’t at least required reviewed financial statements, which are far less expensive to produce than audited ones, but at least have to go through accountants that are independent with respect to the entity that they are reporting on. You don’t hear much about accountant reviews of financial statements; I hadn’t heard about them until I went to accounting school. I don’t know how common they are compared to audits (we do a few more audits than reviews, but mainly because we started doing reviews and the organizations were forced by growing to need audits), but generally reviews and audits are done, and level of service is requested, based on requirements from lenders or government regulators. Lenders will all have different requirements. Lenders only wanting compiled financial statements, which can be done by someone who is not independent, and for which basically no verification is done, are usually working with much smaller amounts of money than what they’d be giving Trump.

[JohnT]

I would like to speculate, using the cheapest pop psychology known to Man, that perhaps trump’s success in politics is because he decided to introduce the ‘malignant asshole’ approach he used the business world to the political sphere. In other words, maybe the asshole persona also held key business people in the same thrall that MAGA is under.

[Son_of_a_Rich]

Whatever superpower he has will be studied for years. But it is some sort of power. The way people who have little skin in a particular trump game will leap to a microphone to fanwank some plausibility into whatever bullshit he’s spinning at the time.

[Atamasama]

I believe Trump has figured out how to appeal to the worst in people, and that’s pretty powerful. Also evil and destructive.

What do you hate? He hates that too! What dirty little secret do you have? He shares it! What sick thing do you desire? He’ll help you get it! (On your dime of course.)

Faust would totally understand.

[DavidNRockies]

I think … so would Anne Lamott:

You can safely assume you’ve created God in your own image when it turns out that God hates all the same people you do.

[Dr.Winston_OBoogie]

@DavidNRockies

Anne Lamott:

You can safely assume you’ve created God in your own image when it turns out that God hates all the same people you do.

I’m gonna have to remember that one. That’s a wonderful quote.

[alphaboi867]

@PhillyGuy

In theory, Trump could be blocked under the insurrection clause of the 14th amendment. In practice, that would be a destructive violation of democratic norms.

How so?