Legal Update Reviewed by Momizat on . People of the State of New York v. Donald J. Trump et al. The recent lengthy court opinion in People of the State of New York v. Donald J. Trump et al., provide People of the State of New York v. Donald J. Trump et al. The recent lengthy court opinion in People of the State of New York v. Donald J. Trump et al., provide Rating: 0
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People of the State of New York v. Donald J. Trump et al.

The recent lengthy court opinion in People of the State of New York v. Donald J. Trump et al., provides a cautionary tale to aspiring damages expert witnesses. In this article, Michael Molder synthesis the factors that persuaded and dissuaded the judge.

Legal Update: People of the State of New York v. Donald J. Trump et al.

It is axiomatic in the civil justice system that everyone is entitled to present their case as they see it. In jury trials, we never know how the factfinder weighed the credibility of the witnesses, which is of particular interest to those who act as expert witnesses. On the other hand, in bench trials, judges typically issue opinions containing detailed discussion of their credibility assessments for the various witnesses. In People of the State of New York v. Donald J. Trump, et al., 2024 N.Y. Misc. LEXIS 711, 2024 NY Slip Op 30493(U) (N.Y. Sup. Ct. February 16, 2024), Judge Engoron provided, in excruciating detail, descriptions of the various witnesses testimony, both fact and expert, and his assessment of their credibility.


This opinion is the culmination of a widely publicized and broadly reported damages trial following an earlier ruling that granted summary judgment[1] to the plaintiff, Office of the Attorney General for the State of New York (OAG), which found that the defendants[2] had committed fraud in preparing false and misleading statements of financial condition (SFC) and sharing those documents with entities outside of the Trump Organization.

The court had previously ruled that the state had a “judicially recognized interest in an honest marketplace” for financial services and the OAG was responsible for protecting that interest.[3] Obtaining financing or insurance based on false and misleading financial representations imperils the integrity of the marketplace.

Timely and total repayment of loans does not extinguish the harm that false statements inflict on the marketplace. Indeed, the common excuse that ‘everybody does it’ is all the more reason to strive for honesty and transparency, and to be vigilant in enforcing the rules. Here, despite the false financial statements, it is undisputed that defendants have made all required payments on time; the next group of lenders to receive bogus statements might not be so lucky.[4]

In this penalty phase of the case, OAG sought ill-gotten gains in the form of reduced interest rates that had been tied to the fraudulent SFCs and disgorgement of profits from the sale of projects that had been financed through fraudulently obtained loans. Over the course of the 11-week trial, the court “listened to every witness, every question, every answer. Witnesses testified from the witness stand approximately a yard from the Court, was thus able to observe expressions, demeanor, and body language. The Court … also considered the simple touchstones of self-interest and other motives, common sense, and overall veracity.”[5]

Court Findings

The opinion details the court’s findings regarding each witness. Focusing on the proffered expert witnesses,[6] the court found:

Michiel McCarty was OAG’s expert on banking and capital markets. With approximately 45 years of experience in the banking industry and an MBA from the Wharton School in capital markets, the court qualified him as an expert. Mr. McCarty used internal documents from the bank funding the loans on the Trump Organization’s projects to calculate the differential in interest rates between loans secured by the projects alone (aka non-recourse loans) and loans also secured by Mr. Trump’s personal guarantee based on the information in his SFCs. Mr. McCarty then calculated the differential in interest cost between a non-recourse loan and the discounted rate loan, including the personal guarantee. Those interest savings totaled approximately $168,000,000. While the defendants disagreed with the methodology, the court described it as “airtight.”

Steven Witkoff was one of the defendants’ experts in real estate development and a self-characterized “good friend” of Mr. Trump for more than 20 years. Mr. Witkoff was neither an accounting expert nor an appraiser, and he was unfamiliar with the requirements of generally accepted accounting principles (GAAP). The court found his testimony irrelevant to the issue of damages.

Jason Flemmons, CPA was proffered by the defendants as an expert in accounting.[7] While he had no valuation credentials, he testified that GAAP requires “estimated current value” in the preparation of SFCs. He discussed several valuation methods and asserted that as long as the defendants chose one of those methods, “any numbers may be inputted into such methodology, regardless of their accuracy or relationship to reality.”[8] The court found that Mr. Flemmons’s testimony on this issue was irrelevant since the OAG had not suggested that the defendants used an impermissible method (but rather that the data used was false), but Mr. Flemmons could not address the validity of the data. Finally, Mr. Flemmons “was reluctant to acknowledge” that including cash in a venture in which Mr. Trump owned a minority interest as cash in his own SFC, [9] was a misrepresentation. Instead, Mr. Flemmons would only agree that it was a “red flag.”

Steven Laposa was proffered by the defendants as an expert in “real estate.” Mr. Laposa had no experience in preparing or reviewing personal financial statements or preparing valuations. His testimony focused on the non-controversial assertion that different appraisers might disagree about the value of a particular property. He also acknowledged that lenders tend to prefer more conservative valuation methodologies than developers.

Gary Giulietti was proffered by the defendants as an expert in insurance underwriting and brokerage. Mr. Giulietti had both personal and business relationships with Mr. Trump, including being a member of several of Mr. Trump’s golf clubs and having been the insurance broker for the Trump Organization since 2017. This lead the court to note, “In its over 20 years on the bench, this Court has never encountered an expert witness who not only was a close personal friend of a party, but also had a personal financial interest in the outcome of the case for which he is being offered as an expert.” Nonetheless, the court allowed Mr. Giulietti to testify, and his testimony was belied by numerous documents and the testimony of another defense expert.

David Miller was proffered by the defendants as an expert in commercial insurance underwriting. Mr. Miller reviewed the documents from Zurich Insurance, which provided coverage for the Trump Organization and many of its properties. Mr. Miller testified that, based on his review, Zurich was not actually concerned with Mr. Trump’s assets and that the insurer made a business decision to write the policy without regard to technical underwriting. According to Mr. Miller, Zurich was more interested in accommodating the broker to maintain the business it was generating than the risks associated with this customer. On cross examination, Mr. Miller acknowledged his previous deposition testimony where he testified that Zurich had “employed ‘normal underwriting guidelines that included sufficient liquidity as a reasonable risk factor.’”[10] Mr. Miller also admitted that he had not considered the Zurich underwriter’s contemporaneous notes of her meetings with Trump Organization representatives, and he acknowledged that he had no basis to dispute her testimony that, among other things, she had:

a) been limited to an onsite review of the SFCs and was not permitted to retain copies for her underwriting file;

b) discussed the valuations with the Trump Organization’s chief financial officer who confirmed the valuations were prepared by an independent professional appraisal firm; and

c) noted the cash on hand contained in the SFCs, which had great bearing on her assessment as it showed that the defendants had the liquidity to repay Zurich in the event of a loss.

In short, Mr. Miller had not considered the entirety of the Zurich underwriting file.

Robert Unell was proffered by the defendants as an expert on commercial real estate finance and banking. Mr. Unell’s testimony was filled with inconsistencies. For example, he opined that the Trump Organization’s lenders eschewed the values included in the SFCs, instead conducting their own due diligence in assessing lending risk. Therefore, according to Mr. Unell, any misstatements in the SFCs were immaterial. This testimony was followed by an acknowledgement that minimum net worth and liquidity covenants in the loan agreements were based on the information contained in the SFCs, contradicting his initial testimony. By way of further example, he disputed Mr. McCarty’s calculation of the interest differential based on the difference between the lender’s commercial real estate group’s term sheet for a non-recourse loan and the actual interest rate that included a personal guarantee from Mr. Trump. Mr. Unell then testified that the “best indication as to what this rate [meaning the rate without the guarantee] would be” was the lender itself. Ultimately, the court concluded that Mr. Unell’s opinions were unreliable because they were “unresearched, unsupported, inconsistent, and contradicted by ample other documentary and testimonial evidence.”[11]

Frederick Chin was an expert offered by the defendants in real estate valuations, the real estate market, and real estate operations. Mr. Chin testified about the difference between “as is” valuations and “as if” valuations, which developers sometimes use to value a property based on their planned improvements. Among other examples, Mr. Chin testified that to value rent controlled properties “as if” they were open market properties, the value would need to reflect the often-substantial costs of buying-out the rent-stabilized tenants. Mr. Chin acknowledged that the Trump SFCs, which valued rent-stabilized apartments as free-market apartments, were erroneous. Mr. Chin also testified that interest rates had a significant effect on real estate developers, including that increased interest rates would increase the cost of a project and make a development less feasible. While Mr. Chin had been offered as an expert by the defendants, his testimony contradicted the claims of other defense experts and verified a motive for the defendants’ misrepresentations in the SFCs to obtain lower interest rates.

Eli Bartov, PhD was offered by the defendants as an expert in financial accounting, credit analysis, and valuation. Dr. Bartov is a tenured professor of accounting at New York University.[12] In prior opinions in this litigation, the court had already determined that Dr. Bartov had “lost all credibility in the eyes of the court.”[13] Despite those prior indications that the court did not believe Dr. Bartov, the defendants elicited testimony from him that overstating the size of Mr. Trump’s personal residence, resulting in a $200 million overstatement of the property’s value, was immaterial. Dr. Bartov further testified that GAAP is not intended to provide the economic value of an asset despite the requirements of GAAP as related to the SFCs and the SFCs’ explicit disclosure that the assets were presented at their estimated current values. Dr. Bartov also attempted to resuscitate the defendants’ argument that the accountant’s disclaimers in the SFC relieved the defendants of liability for the accuracy of those financial statements. The court had previously rejected that defense; a ruling that was upheld by the appellate court.

Eric Lewis, PhD was offered by the OAG as a rebuttal witness to the testimony of Mr. Flemmons. Dr. Lewis testified that, contrary to Mr. Flemmons’ testimony, GAAP does not allow a financial statement issuer to pick whatever valuation method suits their whim, notwithstanding the propriety of the method. Dr. Lewis further testified that the responsibility for the fair presentation of financial statements and compliance with GAAP always rests with the issuer, not an independent accountant that may report on them. In particular, he testified that accountants performing a compilation engagement have no responsibility for identifying GAAP departures. “He convincingly demonstrated that, according to the operative standards, an accountant creating a compilation will not verify the accuracy of the supporting information.”[14]


Expert witnesses are key sources of evidence in modern litigation, particularly complex commercial litigation like accounting fraud cases. Successful expert testimony is not a product of the number of witnesses a party presents, but whether those experts can establish both credibility and relevance in their testimony. This case shows that several factors can impair an expert witness’s credibility, including: personal relationships with the retaining party, the failure to consider significant documents, staking out positions that are contrary to professional standards or common sense, and a lack of expertise in the relevant area of knowledge.


[1]People v. Trump, 2023 N.Y. Misc. LEXIS 5705, 2023 NY Slip Op. 33314(U) (N.Y. Sup. Ct. September 26, 2023).

[2] The defendants in this litigation included: Donald J. Trump (“Trump”), The Donald J. Trump Revocable Trust, two of Trump’s adult children (Donald Trump Jr. and Eric Trump), two Trump employees (Allen Weisselberg and Jeffrey McConney), and several entities owned by Trump, including: The Trump Organization, Inc., Trump Organization LLC, DJT Holdings LLC, DJT Holdings Managing Member, Trump Endeavor 12 LLC, 401 North Wabash Venture LLC, Trump Old Post Office LLC, 40 Wall Street LLC, and Seven Springs LLC (collectively “the Trump Organization”).

[3] 2024 N.Y. Misc. LEXIS 711 at *6.

[4] Ibid. at *7.

[5] Ibid. at *12.

[6] While I typically avoid identifying expert witnesses by name, since this case involved so many of them, it is unavoidable.

[7] Mr. Flemmons was also the subject of the court’s December 18, 2023, opinion denying the defendants’ five motions for a directed verdict. In that ruling, the court chastised Mr. Flemmons for “inexplicably” acknowledging that future income should be discounted to present value in a statement of financial condition, “while at the same time stating there were no [GAAP] departures where defendants failed to apply a discount rate to future income.” 

[8] 2024 N.Y. Misc. LEXIS 711 at *112.

[9] While the primary reason that the OAG alleged the SFCs were false and misleading related overstatements of the fair values of the various real estate assets included in the Trump Organization, one issue involved the reporting of cash and cash equivalents. Mr. Trump owned a 30 percent limited partnership interest in an entity that owned office buildings in Manhattan and San Francisco. The partnership agreement for the entity specifically stated that limited partners had no rights to access the assets of the entity. Nonetheless, Mr. Trump’s SFCs included 30 percent of the limited partnership’s reported cash as its own. This misrepresentation inflated Mr. Trump’s reported liquidity, a subject of restrictive covenants in the defendants’ financing agreements.

[10] 2024 N.Y. Misc. LEXIS 711 at *117.

[11] 2024 N.Y. Misc. LEXIS 711 at *125.

[12] While offered as an expert in valuation, Dr. Bartov holds no credential in valuation. He does not teach any courses related to valuation and his only publication related to valuation involved initial public offerings of “internet stocks.” See

[13] 2024 N.Y. Misc. LEXIS 711 at *132. In a prior ruling denying the defendants’ motions for a directed verdict, the court had noted, “[Dr.] Bartov is a tenured professor, but all that his testimony proves is that for a million or so dollars, some experts will say whatever you want them to say.” (People of the State of New York v. Donald J. Trump, et al, Index No. 452564/2022 [N.Y. Sup. Ct. December 18, 2023]).

[14] 2024 N.Y. Misc. LEXIS 711 at *134.

Michael J. Molder, JD, CPA, CFE, CVA, MAFF, applies 30 years of experience as a Certified Public Accountant and litigator to help investigate and analyze cases with complex financial and economic implications. He has acted as both counsel and accounting expert in pending and threatened litigation as well as participating in internal investigations of financial misconduct. As a litigator, Mr. Molder helped co-counsel understand complex financial and accounting issues in dozens of cases. In 2006, Mr. Molder returned to public accounting applying his unique skills to forensic engagements. He has also performed valuations of business interests in a wide variety of industries.

Mr. Molder has served as valuation expert for both plaintiffs and defendants in commercial litigation matters and owner and non-owner spouses in matrimonial dissolutions. He has participated in the valuations of businesses in a wide variety of industries, including: food service, wholesale and retail distribution, literary development and production, healthcare, manufacturing, and real estate development.

Mr. Molder has also investigated and valued damages in a wide variety of litigation contexts ranging from breach of contract claims to personal injury cases, and from employment disputes to civil fraud. He has consulted on many matters which have not involved the issuance of a report for litigation or resulted in deposition or trial testimony. Accordingly, the identity of these matters is protected by attorney client privilege.

Mr. Molder has also lectured widely on a variety of accounting and litigation related topics including business valuation, financial investigations in divorce proceedings, accountant ethics, financial statement manipulation and “earnings management.”

Mr. Molder can be contacted at (610) 208-3169 or by e-mail to

The National Association of Certified Valuators and Analysts (NACVA) supports the users of business and intangible asset valuation services and financial forensic services, including damages determinations of all kinds and fraud detection and prevention, by training and certifying financial professionals in these disciplines.

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