Trump seethes through the start of trial in New York lawsuit accusing him of lying about his wealth

NEW YORK -

Aggrieved and defiant, former U.S. president Donald Trump spent a day in court Monday for the sometimes testy start of a trial in a fraud lawsuit that could cost him control of Trump Tower and other prized properties.

"Disgraceful trial," he declared during a lunch break, after listening to lawyers for New York Attorney General Letitia James excoriate him as a habitual liar. The state's lawsuit accuses the business mogul-turned-politician and his company of deceiving banks, insurers and others by misstating his wealth for years in financial statements.

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"They were lying year after year after year," Kevin Wallace, a lawyer in James' office, said as Trump sat at the defense table. He looked straight ahead, arms crossed, facing away from a screen that showed details of Wallace's presentation.

Trump denies wrongdoing and voluntarily attended a trial that he called a "sham," a "scam," a waste of the state's time and "a continuation of the single greatest witch hunt of all time." Currently the Republican front-runner in the 2024 presidential race, he reiterated claims that James, a Democrat, is trying to thwart his bid to return to the White House.

"What we have here is an attempt to hurt me in an election," he said outside court, adding, "I don't think the people of this country are going to stand for it."

Trump sneered at James as he passed her on his way out at lunchtime; she left smiling. Meanwhile, his campaign immediately began fundraising off the appearance.

But Trump left for the day claiming he'd scored a victory, pointing to comments that he viewed as Judge Arthur Engoron coming around to the defence view that most of the suit's allegations are too old.

Former President Donald Trump, center, appears in court Monday, Oct 2, 2023, in New York. (Brendan McDermid/Pool Photo via AP)

The judge suggested that testimony about Trump's 2011 financial statement was beyond the legal time limit. Wallace promised to link it to a more recent loan agreement, but Trump took the judge's remarks as an "outstanding" development for him.

Engoron ruled last week that Trump committed fraud in his business dealings. If upheld on appeal, the ruling could force Trump to give up New York properties including Trump Tower, a Wall Street office building, golf courses and a suburban estate. Trump has called it a "a corporate death penalty" and insisted the judge, a Democrat, is unfair and out to get him.

The non-jury trial concerns six remaining claims in the lawsuit, including allegations of conspiracy, insurance fraud and falsifying business records. Engoron said that neither side sought a jury and that state law doesn't allow for juries when suits seek not only money but a court order setting out something a defendant must do or not do.

James is seeking US$250 million in penalties and a ban on Trump doing business in New York.

"No matter how powerful you are, and no matter how much money you think you have, no one is above the law," she said on her way into the courthouse.

Trump says that James and the judge are undervaluing such assets as his Mar-a-Lago resort in Palm Beach, Florida. He and his lawyers also maintain that disclaimers on his financial statements made clear that they were estimates and that banks would have to perform their own analysis.

The former president, his two eldest sons, Trump Organization executives and fixer-turned-foe Michael Cohen are all listed among dozens of potential witnesses.

Trump isn't expected to testify for several weeks. His trip to court Monday marked a remarkable departure from his past practice.

Trump didn't go to court as either a witness or a spectator when his company and one of its top executives was convicted of tax fraud last year. He didn't show, either, for a civil trial earlier this year in which a jury found him liable for sexually assaulting the writer E. Jean Carroll in a department store dressing room.

Former U.S. president Donald Trump, centre, arrives at New York Supreme Court, Monday, Oct. 2, 2023, in New York. (AP Photo/Seth Wenig)

This time, "I wanted to watch this witch hunt myself," he said outside court.

In a recent court filing, James' office alleged Trump exaggerated his wealth by as much as US$3.6 billion.

He claimed his three-story Trump Tower penthouse, replete with gold-plated fixtures, was nearly three times its actual size and worth US$327 million, far more than any New York City apartment ever has fetched, James said. He valued Mar-a-Lago as high as US$739 million -- more than 10 times a more reasonable estimate of its worth, James maintained.

"Every estimate was determined by Mr. Trump," Wallace said in his opening statement. He pointed to pretrial testimony by Trump Organization figures and ex-insiders including Cohen, who said the company estimated assets to get to a predetermined number "that Mr. Trump wanted."

Wallace said the alleged scheme got the company better loan rates, saving it US$100 million in interest.

"They hid their weaknesses and convinced these banks to take on hundreds of millions of dollars in risk," he said, adding, "While the defendants can exaggerate to Forbes magazine or on television, they cannot do it while conducting business in the state of New York."

Defense lawyers said the financial statements were legitimate representations of prime properties that can command top dollar.

"That is not fraud. That is real estate," attorney Alina Habba said in an opening statement. She accused the attorney general's office of "setting a very dangerous precedent for all business owners in the state of New York."

Defense experts will testify that valuing properties is subjective, Trump attorneys said. He and his lawyers have also argued that no one was harmed by anything in the financial statements, which were given to banks to secure loans and to financial magazines to justify his place among the world's billionaires.

Banks that made loans to him were fully repaid. Business partners made money. And Trump's own company flourished.

Defense lawyer Christopher Kise blasted last week's fraud ruling, telling the judge he shouldn't have made a decision before hearing expert trial testimony on property valuations. Engoron, tiring of the defense's criticism, shot back: "Respectfully, what's that expression? You're stalking the dead horse here."

Testimony began Monday afternoon with Donald Bender, a longtime partner at accounting firm Mazars LLP, describing how he spent 50 to 60 hours a year preparing Trump's financial statements. Mazars cut ties with Trump last year after James' office raised questions about the documents' reliability.

James' lawsuit is one of several legal headaches for Trump as he campaigns to return to the White House. He has been indicted four times since March, accused of plotting to overturn his 2020 election loss to Democrat Joe Biden, hoarding classified documents and falsifying business records related to hush money paid on his behalf. He has pleaded not guilty to all the allegations.

The New York fraud trial is expected to last into December, Engoron said.

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Associated Press writers Jill Colvin and Karen Matthews contributed to this report.