Trump insists on ‘disclaimer’ defense already tossed in NY fraud trial
As he sat on the witness stand in a New York courtroom last week, Donald Trump reached into his pocket, pulled out a piece of paper and tried to hand it to the judge.
Trump explained the document showed the standard disclaimer he used on financial records he sent to lenders — essentially saying they can’t rely on him to tell the truth. These disclaimers are likely to come up again and again in his defense case, which kicked off this week at the civil fraud trial against him. The judge, who refused to accept the document Trump tried to hand him in court, has already rejected the disclaimer argument over and over, signaling it will be a losing strategy for the former president and his real estate business.
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Central to the case are the statements of financial condition Trump had his accountants at Mazars USA LLP send to lenders detailing his assets and their values. The state of New York alleges he inflated his net worth by as much as $3.6 billion a year to get better terms on loans and insurance, reaping $250 million in “illegal profit” from 2011 to 2021.
Trump insists that the “worthless statement clause” included in those documents is proof enough that no fraud was committed, and that financial institutions did their own due-diligence. The argument has continuously come up in the chaotic trial over claims he defrauded Deutsche Bank AG and other banks by inflating the value of his assets.
“It says, very strongly, ‘do your own due diligence,’” Trump testified Nov. 6. “Don’t take anything from this statement for granted. You could look at the statement, but you must do your own analysis and due diligence.” He added, “If there is any mistake, the disclaimer clause covers it.”
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‘WORTHLESS’ DEFENSE
But the judge said boiler-plate warnings about the reliability of his financial statements aren’t legally binding.
“Defendant’s reliance on these ‘worthless’ disclaimers is worthless,” state court judge Arthur Engoron wrote in September, when he found Trump liable for fraud in the case. The trial is focused on the remaining claims in the lawsuit filed by New York state — including issuing false financial statements and conspiring to falsify business records.
At the conclusion, the judge will rule on liability for those claims and determine any penalties. Engoron has rejected Trump’s argument twice — and was upheld both times by a state appeals court, once for his ruling in September and again over a January motion to dismiss.
The judge said defense lawyers were argued repeatedly that a disclaimer should exonerate lies on financial documents, even though the documents “put the onus for accuracy squarely on the defendants’ shoulders.”
Disclaimers aren’t designed to be used in the way Trump has, according to John Moscow, a former prosecutor in the Manhattan District Attorney’s office. Instead, they allow borrowers the right to make minor adjustments if there’s an error in the documents they’ve submitted, he said.
