The case is more complicated with respect to Ivanka than the other defendants.
The case is more complicated with respect to Ivanka than the other defendants.
N ew York attorney general Letitia James could wrap up the presentation of the state’s civil-fraud case against former president Donald Trump today, after eliciting testimony from his daughter, Ivanka Trump.
Trial lawyers like to open and close strong. In this instance, though, it would be a mistake to read too much into Ivanka’s appearance as the state’s closer. She is a reluctant witness, and she is testifying last because she fought the state’s subpoena. Only last Thursday (November 2) did a New York appellate court decline to disturb trial judge Arthur Engoron’s denial of her motion to avoid testifying. She had claimed that doing so would be a hardship, as she is now a Florida resident with three young children in school; Engoron rejected that argument but ruled that she should not be forced to testify earlier than Wednesday, November 8 (today).
Ivanka Trump was a top executive in the Trump Organization. Initially, she was a defendant when James brought the lawsuit in 2022. She was sued along with her father, her two adult brothers (Don Jr. and Eric), other company executives, the Trump organization itself, and various of its component entities. In the lawsuit, the state alleges that the organization engaged in a persistent pattern of fraud from 2011 through 2021, essentially inflating the value of its real estate and other assets in order to get favorable terms on bank loans and insurance coverage.
The case is more complicated with respect to Ivanka than the other defendants. She left the Trump Organization during the 2016 presidential campaign, and then worked in her father’s administration from 2017 through 2020. She has not been a part of the family real-estate and branding business for nearly eight years — unlike her adult brothers, who ran the business while Trump was president, and Trump himself, who remained the head of the Trump organization though he was not actively running it while in office.
This matters because, as relevant here, the statute of limitations for fraud claims under New York law is six years. The statute of limitations can be extended (or “tolled”) by an agreement between the parties. There was such a tolling agreement in 2016. (It is often in the interest of a potential defendant to agree to tolling in the interest of trying to negotiate a favorable settlement; in the end, there was no settlement in this case.) Nevertheless, when the tolling agreement was struck, Ivanka was no longer part of the Trump Organization, so she was not bound by it.
Since Ivanka had no involvement in the business in the six years prior to the suit’s being filed, she moved to dismiss the claims against her as time-barred. Judge Engoron denied dismissal motions by all the defendants, describing some of them as “borderline frivolous.” But the appeals court (New York’s Appellate Division, First Department) reversed, throwing out the case against Ivanka in its entirety, and requiring a narrowing of the case against other defendants.
For statute-of-limitations purposes, the fraud allegations against the former president and the other defendants involve what’s known as “straddle” transactions — i.e., parts of them occur before, and parts after, the limitations date. In general, the rule is that if a defendant’s pattern of behavior continued after the limitations date (i.e., the allegation is not time-barred), then the relevant evidence about the transaction that occurred before the limitations date is admissible.
To apply that here (and I’m oversimplifying a bit), James is permitted to introduce evidence of fraud transactions that would otherwise be time-barred (i.e., from 2011 through 2015) against defendants whose conduct continued beyond the limitations date (i.e., from 2016 through 2021).
This means that, even though Ivanka Trump could not be sued over allegedly fraudulent activities that occurred from 2011 through 2015, she still has relevant testimony to provide regarding those matters since the other defendants are being sued over them.
Understandably, she does not want to testify. She hasn’t been involved in the business for years. Moreover, James and her minions are only calling Ivanka as a witness because they calculate that her testimony will be damaging to her father, her brothers, and the family business.
Ivanka thus moved to quash the subpoena on the grounds that she is not a defendant in the case, she is now a resident of Florida, and the hardship appearing in court would cause outweighed the value of her testimony. Alternatively, she asked to postpone her testimony to a week when her children would not be in school. Engoron rejected these arguments and the appellate division agreed with him. Hence, she is testifying today.
The trial began in early October and was estimated to last two to three months, which seemed long to me. The state’s case has taken about six weeks. The defense case will begin in the next few days. Trump’s team has intimated that there will be an extensive presentation. I have my doubts.
For what it’s worth, here’s what I’m watching for: Will Trump’s corporate counterparties be willing to testify on his behalf?
All other things being equal, since the state has not been able to establish that there were any victims of the alleged fraud, one would think Trump’s defense would parade in a bunch of bank and insurance executives to testify that they were glad to have done business with Trump, he was a good customer who paid on time, and they were very comfortable with his asset valuations.
But if you’re a top executive at a financial institution that is heavily regulated by New York State, and you see how the state has gone after Trump hammer and tong in a transparently partisan vendetta, do you want to get on the “wrong” side of that? When you see that an elected-Democratic attorney general, aided and abetted by an elected-Democratic judge, is hellbent on putting Trump out of business and taking a quarter-billion dollars from him in a case where there are no victims, what makes you think they wouldn’t come after you if you cross them?
This is the business climate under woke-progressive, vindictive government. I’d be surprised if banks, insurance companies, and other corporate entities line up to testify against the state on Donald Trump’s behalf.