In Trump's civil fraud trial, defense takes shape amid rising stakes

The civil fraud trial of Donald Trump concluded its first week of defense testimony Friday, with Trump's eldest son and a series of expert witnesses seeking to show that Trump is not liable for fraudulent overvaluations in his statements of financial condition that were sent to banks and insurance companies.

The defense case comes amid rising stakes for the former president. New York Attorney General Letitia James sued Trump for $250 million, but as the trial has progressed her office has introduced testimony and documents that bring a potential disgorgement request closer to $400 million.

Trump has denied all wrongdoing in the case.

Donald Trump Jr., testifying at the start of the week, called his father a real estate "visionary" who "sees the sexiness in a real estate project," which has created value for the family business that cannot be captured on paper.

Defense expert Jason Flemmons, an accountant, buttressed Trump Jr.'s view, describing a process of valuing real estate that could result in a range of outcomes.

"Estimated current value is not an exact science. There is not one single correct value that comes of this exercise," Flemmons said.

He testified that while Trump's statements of financial condition deviated from generally accepted accounting standards, they included disclaimers clearly informing lenders of that fact.

Flemmons, who formerly worked in the enforcement division of the Securities and Exchange Commission, also put the burden for any errors on the Trump Organization's outside accountants at Mazars USA.

As an example, the defense pointed to Trump revising the square footage of his Trump Tower penthouse after Forbes magazine pointed out he had inexplicably tripled it. As a result, Trump's statement of financial condition reflected a change in the apartment's value from $327 million to $116 million.

Judge Arthur Engoron asked Flemmons, "Would accounting standards require Mazars to notice the change?"

"Yes," Flemmons responded.

State attorney Kevin Wallace tried to challenge that argument, asking Flemmons in his cross-examination, "Did you ever encounter issuers facing allegations of fraud [try] to throw their accountants under the bus?"

The defense objected to the question and the Judge Engoron sustained their objection.

The judge was less sympathetic to another line of argument advanced by the defense: that any overvaluation of one property on Trump's statements of financial condition was offset by the undervaluation of another.

"We get to present holistic picture of his financial position," defense attorney Christopher Kise said in attempting to introduce an expert opinion that Trump's Doral golf club in Miami was worth more than listed on Trump's financial statements, thereby making up for properties whose values were deemed inflated.

State attorney Andrew Amer called the argument "nonsense" and Judge Engoron agreed.

"The reader of the financial statement has a right to know whether each particular number is accurate," Engoron said. "Any value with Doral doesn't insulate a false value."