Isn’t fraud a crime? Why isn’t this a criminal case? Who is the plaintiff? If New York State is the plaintiff, does that mean that NYS suffered a financial loss as a result of Trump’s fraud? If Trump is ordered to pay $100m, who gets the money?
IANAL:
Fraud can be a crime. If convicted the person will go to jail and/or pay a fine.
But, the person/entity that was defrauded needs to bring a civil case against the person to get their money back (or property or some kind of compensation). So that will happen too (probably).
But, a criminal trial is more difficult to get a guilty verdict in. It requires guilt “beyond a reasonable doubt.” A civil case has a lower threshold of “preponderance of evidence” so it is easier for the plaintiff to win in a civil trial.
It may be (I do not know) that the state doesn’t think it can win a criminal case but thinks a civil case can be won. Winning a criminal case against the person for fraud makes the civil trial a lot easier since a higher standard of guilt was already found but it is not necessary to win a civil trial.
I do not know who gets the money in this instance. Presumably whoever was defrauded (and I would think the state will take some to pay for the effort to bring the case and go to trial).
He committed fraud to the State of New York and NYC by lowballing his tax bill. He committed fraud against the banks who loaned him money at reduced rates. He committed fraud against the people he over charged rent to in rent controlled apartments. He committed fraud to the people who attended Trump University. He basically is the King Midas of fraud.
Then the plaintiff(s) should be New York County, or the banks or those that he over charged, or Trump University students. What is New York State’s loss (or where do they get the right to sue on behalf of someone else).
Tax money the state feels it was owed.
That is literally one of the main jobs of a state Attorney General. I’m not sure why this bothers you. Misconduct coming to light and justice being done is generally considered a good thing.
In my state, if the revenue department thinks I’ve underpaid my taxes (be it income or real-estate taxes), they send me a bill. If I object to the new assessment, it’s up to me to take the revenue department (or my town assessor) to court. If the IRS thinks I’ve committed fraud, they send me a bill and it’s up to me to take the IRS to court. In other words, why is New York State/City/County the plaintiff. They should be the defendant.
I think it is different when the state is alleging fraud occurred as opposed to disagreeing on what the tax bill ought to be. If fraud, the state may be able to get more than just the amount originally owed but punitive damages as well (like triple the amount owed…but that will vary state-to-state and may or may not apply here…just an illustration).
It is a form of consumer protection law. The Legislature of the state of New York has passed this law, to give the AG of New York the power to bring civil suits when there is civil fraud, and for the courts to impose civil penalties. It was enacted at the request of Jacob Javits, a Republican Attorney General of New York. The purpose of the law is to protect honesty in commercial affairs, in matters where individuals may not have the resources to go to court to protect themselves.
See:
See also this NYTimes article from a year ago, when AG James first announced the civil action:
It’s not just a matter of fractionally underpaying one’s taxes, a relative drop in the revenue bucket to be remedied by surrendering the unpaid amount. Large-scale fraud distorts the entire marketplace. For just one example, if the banks are deceived into making loans to the dishonest party, they have reduced funds available to loan to other parties, which has knock-on effects throughout the entire economy.
New York lawmakers have deemed this a reasonable and proper concern such that enforcers are granted powers to combat the effect using both criminal and civil mechanisms. The DA is using the powers granted under the law.
Therefore, it sounds like your concern should not be about the DA’s office exceeding their powers, because this is not happening. It sounds like your concern should be with the nature of the law itself, and that penalties for fraudulent actions that pollute and injure the marketplace should always be criminal. Is this the argument you are attempting to make?
If the IRS thinks you have committed fraud, they will send you a bill and refer you to the Justice Department for prosecution.
I thought the NYC DA decided not to press charges. I also think Letitia James has referred the evidence that she uncovered to the IRS and the justice department, so there still could be some criminal case brought. These seem like small potatoes compared to the other charges he’s facing, though.
Well the Trump University lawsuit was settled out of court.
And the banks and NYC can sue after the settlement in the New York state case has concluded. But they may very well be included in the settlement, we will just have to wait and see. Hopefully not very long.
Apparently the law also allows the government to claw back any profits gained as a result of illegal activity. I assume this lawsuit could be seen as an alternative to a class action suit by the parties affected by the fraud. It is simpler for removing fraudulently obtained profits than waiting for a criminal trial. It’s quicker and simpler, becuase it does not involve jail time as a penalty. The concommittant civil penalties include barring officers of the businesses from being officers of NY corporations, and cancelling the licenses of corporations, when there has been a consistent pattern of such behaviour.
Also, licensed NY corporations need to file regular accounting reports with the state, so any such activity also includes filing fraudulent staements, so committing fraud against NY state too.
We expect the state to prosecute criminal fraud, in the public good.
This statute takes the position that it is also the role of the state to prevent systemic business fraud through civil actions, again in the public good.
In the long run, endemic business corruption harms honest businesses, consumers, and the state’s reputation as a good place to do business.
In the simplest terms, a 10-20% difference in valuation for either loan or tax purposes might be considered an error made in good faith, something that can be remedied with a tax bill and a “we’ll say no more about it.”
A 400% difference in valuation – as is the case in many Trump valuations – can only be viewed as fraud. As such, it must be prosecuted either civilly or criminally.
For now, it is being prosecuted in civil court in an effort to make the damaged parties whole.
It remains to be seen if Alvin Bragg will take this matter up again criminally. His case may be bolstered if Letitia James’s civil proceeding prevails.
That happened to me once but it was really small potatoes. The state said I owed $300 more than I paid and levied a tiny penalty (I forget…like $30 or something). I paid it…done and done.
(It was a legit mistake…we both knew it…no need for a trial.)
ETA: There was one other time where the state said I owed more but they were wrong. I was surprised at how easy that was resolved. I spoke with a very nice lady who said she was going to do an asset search and, when she was done, she said no problem, all was well and the whole thing went away. I expected that one to be a lot more difficult. In 40 years of filing taxes I think that’s a pretty good track record. What pisses me off is their diligence to get my $300 but their lack of diligence at getting Trump’s many millions.
Yes, I think many Americans have had the IRS send them notice that they disagree with something on their tax form.
As what happened to you, it happened to me about 10 years ago. The IRS claimed I hadn’t declared 1099 income that I knew I had declared and I owed them an additional $600. My first instinct was to just pay it, even though I knew I’d declared it. But then I asked myself, “Would you just throw $600 out the car window?” No. No, I would not.
I spent a day locating and copying my tax records, highlighting the relevant portions and writing a detailed letter explaining where they’d missed the income declaration.
Several weeks later, I received a letter that basically said, “Never mind!” In that instance, I’ll assume a good faith error on their part. Although I imagine a lot of people do just pay it, and that kind of makes one wonder.
The OP may find this video (only 3 hours old as of this post) interesting. It discusses what is happening to Trump in the New York civil case in some detail.
Tl;Dw version…Trump is (almost certainly) f’d financially in this case. He’d need some seriously good lawyers to save him from this and he doesn’t have those (for reasons out of the scope of this thread).