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Spokane, Washington  Est. May 19, 1883

Trump Jr. testifies, deflects responsibility in N.Y. fraud case

Then President-elect Donald Trump along with his children, left to right, Eric, Ivanka and Donald Jr., arrive for a news conference in 2017 at Trump Tower in New York.  (Timothy A. Clary/AFP/GETTY IMAGES NORTH AMERICA/TNS)
By Shayna Jacobs and Mark Berman Washington Post

NEW YORK – Donald Trump Jr. testified Wednesday afternoon in a multimillion-dollar civil case that accuses him, his father and other Trump Organization executives of cheating in business deals, saying he was not directly involved in the production of financial statements.

The former president’s son is the first member of his family to be called as a witness by the office of New York Attorney General Letitia James (D) in its $250 million fraud lawsuit against the family and the company.

James’ lawsuit accuses Donald Trump and his executives of inflating his financial statements to secure better terms. During his testimony, Trump Jr. said the responsibility of preparing financial statements rested with Mazars USA, the company’s longtime accounting firm.

“These people had an incredibly intimate knowledge, and I relied on them,” Trump Jr. said.

His testimony marked the beginning of a new, more high-profile phase in the trial, in which multiple members of the family – including Trump – are expected to take the witness stand in the coming days and address the allegations against their company.

Trump Jr. is one of the defendants in the trial, which began on Oct. 2. He is expected to continue testifying Thursday and is also expected to be summoned back to the stand later in the case by his own attorneys.

His brother Eric Trump, also a defendant in the case, is scheduled to testify on Thursday as well. Their father is set to testify Monday, followed by their sister Ivanka Trump two days later, although she is appealing an order directing her to take the stand.

The family’s dynamics and businesses practices are expected to be on display in the coming weeks as they and the Trump Organization as a whole face scrutiny in a Manhattan courtroom.

James’ lawsuit alleges that Donald Trump, his executives and his adult sons committed a decadelong fraud to inflate his net worth by billions to get better rates from lenders and insurance firms.

The Trump family and their lawyers have denied any wrongdoing, with the defense maintaining that there was no fraud committed. Defense attorneys have said that real estate valuations are subjective and that lenders did not rely on Trump’s annual statements of net worth to make their decisions on loans.

Trump, Trump Jr. and Eric Trump, who is running the company, remain defendants in the case, while Ivanka Trump was dismissed as a defendant in an appellate decision in June.

Before the trial, New York Supreme Court Justice Arthur Engoron ruled that the defendants and the company broadly committed fraud. The trial, which will be decided by the judge and not a jury, is examining whether the defendants committed specific illegal acts in the course of committing fraud.

The case has the potential to essentially stifle Donald Trump’s ability to conduct business in New York, by restricting the ability of officers to do their jobs and by preventing the company from obtaining new loans and from acquiring new properties. It is civil case, not a criminal one, so no one involved faces any time behind bars as a result.

When he took the stand Wednesday, Trump Jr. discussed his background, including his education and work with the Trump Organization.

During his testimony, Trump Jr. said he had no significant knowledge of the accounting standards known as the Generally Accepted Accounting Principles (GAAP). Evidence at the trial has shown that financial statements prepared by the Trump Organization and distributed to business partners between 2011 and 2021 did not comply with those rules.

“I have no understanding (of accounting guidelines). … That’s what we have CPAs for,” Trump Jr. said, referring to certified public accountants.

Trump Jr. arrived in the courtroom with a confident stride Wednesday afternoon. While his testimony got underway, he avoided the more bombastic stance he has displayed on social media and in television interviews. He maintained his composure on the stand, though his patience seemed to wane as the questions continued throughout the afternoon.

Leaving the room during an afternoon break, he paused to hover over the courtroom sketch artist’s work, looking at her drawing of him.

Trump Jr. and Engoron shared a laugh Wednesday over his testimony that he knows nothing about accounting rules. His only knowledge of GAAP, Trump Jr. said, is that it covers common accounting procedures. He learned that in his introduction-to-accounting course at the Wharton School years ago, he said.

Trump Jr.’s father was called to the witness stand briefly last week for a much less lighthearted moment. Donald Trump was summoned in an impromptu hearing over whether he had violated a gag order Engoron imposed barring him from making public comments about the judge’s court staff.

The limited gag order in the case came after Trump had posted to social media about a member of the judge’s staff, including a photograph. Then, last week, Trump spoke to reporters in the hallway outside the courtroom – as he often does – and assailed Engoron, a Democrat, as “a very partisan judge.” He also said there was “a person who’s very partisan sitting alongside of him, perhaps even more partisan.”

Engoron soon summoned Trump to the stand. Trump said his remark was not about one of the judge’s staff members but instead was aimed at Michael Cohen, a Trump attorney turned nemesis who testified earlier that same day. Trump said he was talking about Cohen, but then added of the staff member that he felt she was “very biased against us.”

Engoron said he did not find Trump’s defense credible, fining him $10,000.

Trump has appeared at the civil trial several times, even though he isn’t required to do so. He has grimaced during testimony, delivered campaign-style remarks to reporters outside the courtroom and complained repeatedly on social media about what he claims is improper meddling in his private business affairs by James, a Democrat.

Trump, who is seeking the 2024 GOP presidential nomination, is facing four criminal prosecutions in other jurisdictions. He has insisted he is being targeted for political reasons.

He has also criticized Engoron, calling him a “political hack” and protesting that some of his offspring have to appear in court.

“Leave my children alone, Engoron,” Trump posted on social media early Wednesday. “You are a disgrace to the legal profession!”

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Berman reported from Washington.