Trump Lawyers Face Possible Sanctions in NY Civil Fraud Case

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(Bloomberg) — The New York judge overseeing the state’s civil fraud suit against Donald Trump and his sprawling real-estate company is losing patience with the former president’s argument that the case is a “witch hunt.”

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Former US President Donald Trump speaks during a ‘Save America’ rally in Vandalia, Ohio, US, on Monday, Nov. 7, 2022. Former President Donald Trump suggested an announcement that he plans to make another White House bid is imminent and attacked Florida Governor Ron DeSantis at a rally in Pennsylvania, a sign the former president is training his ire on a potential chief rival in a 2024 GOP primary.

State court Justice Arthur Engoron warned lawyers for the former president, his business entities and two of his children that he may hit them with sanctions for making the same arguments to dismiss the case that he already rejected previously.

“This court is considering imposing sanctions for frivolous litigation,” Engoron said in a Jan. 4 letter to the lawyers that was posted on the court docket. The attorneys for the defendants are repeatedly “making the same arguments based on the same facts and the same law,” he said.

The threat is the latest setback for Trump in the $250 million suit filed by New York Attorney General Letitia James, who claims the former president, three of his children and the Trump Organization manipulated the value of mogul’s assets for years deceive banks and insurers.

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The judge sent the letter to the law firms of Alina Habba, who represents Trump and his company; Clifford S. Robert, who represents Trump’s sons Donald Trump Jr. and Eric Trump; and Christopher Kise, who represents several Trump trusts and business entities. 

The lawyers argued in their motions to dismiss the lawsuit that the case is politically motivated because James, a Democrat, targeted Trump to advance her career. They also argued James lacks legal standing to sue and that Trump’s former accounting firm used disclaimers that would have made it clear to banks and insurers that it hadn’t audited Trump’s financial statements.

But Engoron noted in his letter that he already rejected those arguments when they were raised in opposition to James’s motion for a preliminary injunction in the case. Based on that motion, the judge appointed an independent monitor to oversee some aspects of Trump’s business while the case proceeds.

The lawyers responded in a joint letter to Engoron late Thursday night, saying his threat of sanctions was based “on a flawed legal premise.”

“It would be a prejudicial reversible error for a court to reject arguments brought forth by litigants on the basis that such arguments were previously rejected in a preliminary injunction order,” the lawyers said. They also said they were given “troublingly little notice” to respond.

Trump’s lawyers clashed with Engoron even before the suit was filed. When James went to court to enforce subpoenas during her three-year investigation, Engoron held Trump in contempt of court and fined him $10,000 a day for failing to properly comply. Trump has appealed that order, though he’s already paid a total of $110,000 in fines that are being held in escrow.

Trump has also railed against Engoron on his Truth Social site, calling the judge “a radical left lunatic” and a “partisan disaster.”

Read more: Trump Lawyers Sanctioned Over ‘Negligent’ Clinton Lawsuit

(Updates with detail from the lawyers’ response.)

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