Court rejects expert opinions justifying Trump's business records citing lack of credibility

Court rejects expert opinions justifying Trump’s business records citing lack of credibility

After a rigorous three-year investigation conducted by the Office of the Attorney General, involving in-depth interviews with over 65 witnesses and the examination of extensive documentation provided by the Defendants and other involved parties, it was established Defendants Donald J. Trump (“Trump”), Trump Organization LLC and the Trump Organization, Inc. (collectively with the other named entities, the “Trump Organization”), Allen Weisselberg, and the other individuals and entities affiliated with Trump and his companies named as Defendants, were engaged in a pattern of fraudulent activities and misrepresentations spanning the years 2011 through 2021. These deceptive practices primarily revolved around the preparation of Trump’s annual financial statements, known as the Statements of Financial Condition.

The investigation revealed a consistent and deliberate pattern of fraudulent conduct orchestrated by upper management within the Trump Organization. This conduct was deemed a collective effort to manipulate the content and presentation of the Statements of Financial Condition. Moreover, crucial information was deliberately withheld or concealed from Mazars, the entity responsible for compiling these financial statements. It’s important to note that Mazars, in its role of compiling assertions of Trump and the Trustees’ into financial-statement format rather than conducting comprehensive audits, remained unaware of many of the fraudulent strategies and misrepresentations embedded within the financial statements.

These fraudulent actions were not isolated incidents but were instead part of a systematic effort that received approval at the highest levels of the Trump Organization, including Donald J. Trump himself. The intent behind these actions was to present a misleading and inaccurate financial portrayal through the annual statements.

New York University Stern School of Business research professor, Eli Bartov testified that upon his review, he did not identify any indications of fraud within Trump’s family real estate company’s financial statements. This assessment contrasts with the allegations made by the New York state’s attorney general, who pointed to overstated property values meant to secure advantageous loan and insurance terms.

Jason Flemmons, a forensic accountant who’s a senior managing director at Ankura, an international consultancy firm and a a former deputy chief accountant at the U.S. Securities and Exchange Commission acknowledged that Trump’s annual net-worth statements spanning a decade exhibited “glaring” issues. However, he attributed the content of these statements to Trump’s accountants, asserting that they held the ultimate responsibility for the statement’s contents.

Accounting Expert Witnesses

Eli Bartov, renowned for his expertise in accounting and academia, serves as a Professor of Accounting at New York University’s Leonard N. Stern School of Business. With a Ph.D. from UC Berkeley in 1989, he’s recognized globally for his award-winning research and teaching prowess. His extensive research spans a diverse array of topics including financial reporting, executive compensation, social media’s impact on capital markets, forensic accounting, stock price dynamics, M&A analysis, and diverse facets of equity valuation and trading strategies.

Jason Flemmons, currently serving as a Senior Managing Director at Ankura in Washington, DC, boasts an extensive career spanning more than 25 years. His expertise lies in forensic accounting, corporate investigations, and technical accounting and auditing. Notably, Flemmons previously held the position of Deputy Chief Accountant within the Securities and Exchange Commission’s Division of Enforcement. In this pivotal role, he oversaw and actively conducted a multitude of investigations focused on financial and accounting fraud, involving SEC registrants and other involved parties.

Discussion by the Court

The Court held that the “overarching point” of Bartov’s testimony was that Trump’s subject statements of financial condition were “accurate in every respect” yet the Statements of Financial Condition were found to consist of numerous inadvertent errors with even a previous ruling to that effect. Bartov contended that no expert countered or disputed his testimony, nor did any expert testify that they had uncovered evidence of fraud.

During his testimony, Bartov disclosed that he dedicated approximately 650 hours to the case, charging at a rate of $1,350 per hour, resulting in compensation totaling around $877,500. He clarified that payments for his services came from both the Trump Organization and Save America, a political action committee that backed Trump’s prospective 2024 election campaign. Bartov held this rate to represent his standard billing fees.

Justice Arthur Engoron wrote that the testimony merely demonstrated that, for a considerable sum of money, certain experts could be swayed to align their statements with the desires of those footing the bill.

During his testimony, Flemmons admitted to lacking expertise in property valuation, yet attempted to offer opinions on property values. He testified that a wide variety of “methodologies” could legally be used in estimating property and asset values. These methodologies could produce net-worth values that differ from each other by “orders of magnitude.”

He emphasized that according to ASC 274, as long as a method permitted by the standards was selected by the Defendant, figures could be inserted into such methods without regard for their accuracy or relation to reality.

Additionally, Flemmons conceded the necessity of discounting future income to present value in financial statements but paradoxically stated there were no departures from Generally Accepted Accounting Principles (GAAP) when Defendants failed to apply a discount rate to future income.

He expressed the opinion that Mazars should have pursued items in the Statements of Financial Condition (SFCs), but firmly stated that it would have been “highly unusual” for Mazars to inquire about any appraisals in the possession of the client.  “There would be no obligation or expectation on the part of Mazars or any accountant performing compilation services” to request appraisals that weren’t the basis for values on the statements, said Flemmons.


The Court held that the testimony of Defendant’s expert Eli Bartov and Jason Flemmons lacked credibility. Closing arguments in the trial are set for January 11, 2024.

Key Takeaways:

The Court noted discrepancies in Eli Bartov’s assertion of accuracy with regard to Statements of Financial Condition, considering previous findings of errors. Justice Arthur Engoron flagged concerns about substantial compensation potentially influencing expert alignment with the paying party’s interests. Jason Flemmons emphasized the wide legal scope of methodologies for estimating property values, often without accuracy or relation to reality, as allowed by accounting standards. Flemmons’ stance on GAAP compliance presented a contradiction regarding discounting future income. Additionally, while suggesting Mazars should have pursued items in the Statements of Financial Condition, Flemmons deemed it “highly unusual” for them to inquire about unrelated appraisals, absolving Mazars from obligation in such cases.