Friday, April 19, 2024
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Congress Must Prohibit Fraud Cases Without Victims



We must never lose sight of the fact that leftists have no reverence for American institutions, and that includes the law. Regardless of the original intent, if a law can be twisted, perverted and weaponized to punish their opponents, count on leftists to take advantage of it.

Nothing has illustrated this utter lack of ethics and morality than the politically motivated election interference cases against Donald Trump. While they all deserve intense scrutiny, for the sake of brevity, I will focus on the recent case in Manhattan relating to Trump’s businesses and the supposed fraud committed in securing loans for real estate development.

Executive Law 63 (12)

The Trump organization was charged under New York Executive Law 63 (12), which was passed in 1956 and signed by Governor Averell Harriman. Essentially, it is a fraud statute that gives the Attorney General broad and significant powers to issue subpoenas and file indictments.

Since the law was passed, it has been used in several high-profile cases, including a leasing company whose victims signed leases based on deception, the e-cigarette company JUUL Labs, a home improvement company that presented itself to consumers as a state agency, a law firm that represented itself as specializing in landlord tenant law when it was really a debt collector, and so on. In New York’s financial district, 63 (12) is often used in conjunction with the Martin Act to prosecute securities and bank fraud schemes. The point is, that in the past, indictments under 63 (12) were only initiated when there was a clear predator and an obvious victim.

Until now.

Restoring the Six Year Statute of Limitations

Shortly after winning her election for Attorney General in 2018, Letitia James could not hide her contempt or loathing for Donald Trump:

We will use every area of the law to investigate President Trump and his business transactions and that of his family as well. We want to investigate anyone in his orbit who has, in fact, violated the law. Donald Trump’s days of defrauding Americans are coming to an end. We can spot a carnival barker. I will shine a light into every dark corner of his real estate dealings, and every dealing.

After expressing her antipathy and making her intentions to selectively prosecute Trump clear, James set about executing her obsessive strategy.

In 2018, the New York Court of Appeals ruled that the statute of limitations for crimes committed under the Martin Act would be reduced to three years from six years. The Court left the decision on whether the three-year limit would apply to 63 (12) to trial court. However, through rigorous lobbying efforts, James was able to persuade the state legislature and Governor Andrew Cuomo to pass a law in 2019 that restored the six-year statute for both the Martin Act and 63 (12).

If Main Street has to play by a set of rules, then so must Wall Street,” said James. “This law strengthens two of our most critical tools in holding corporate greed accountable and delivering justice for victims of financial fraud. As the federal government continues to abdicate its role in protecting investors and consumers, this law is particularly important. New York remains committed to finding and prosecuting the bad actors that rob victims and destabilize markets. I thank the bill’s sponsors, Senator Gianaris and Assemblymember Carroll, legislative leaders, and Governor Cuomo for helping to make this important bill the law of the land.

It’s not hard to imagine James anticipated filing charges against Trump under 63 (12) long before she took office, and so she initiated the effort to extend the statute of limitations to ensure he would suffer the maximum penalties.

Weaponizing 63 (12)

With the plan in place, James conjured up the indictment against Trump based on accusations that he defrauded banks by inflating his assets during negotiations for his construction loans. Unlike any other case prosecuted under the statute in the past, Trump was found guilty despite the absence of malice, intent, actual fraud, or a victim.

In fact, almost laughably, representatives for Deutsche Bank testified that they relied on their own due diligence in approving Trump’s loans, and they would welcome the opportunity to earn his business in the future. The premise of the indictment, which was on shaky ground from the beginning, completely fell apart after the banker’s testimony. You would think the case would have been dismissed, but it wasn’t.

Relying on a provision of 63 (12) that apparently allows a prosecution to take place even without any victims, leftist Judge Arthur Engoron ordered Trump to pay $364 million in damages and suspended his business licenses for three years. The judgement is around $450 million when pre-trial interest is figured in. To appeal, Trump must post the full amount in advance.

In essence, this is a financial death penalty, even for a billionaire.

The Chilling Effect of Lawfare and Judicial Weaponization

The impact of this gross miscarriage of justice cannot be overstated. In effect, woke leftists want to break Trump financially and send a message to anyone with America First values who might be considering entering the political arena.

“See what we did to Trump? If you don’t stay quiet and disappear into the background, you might be next.”

But this bald-faced authoritarianism is even more unsettling in the context of how it could impact ordinary American citizens in their daily lives.

Essentially, all transactions in America involve a perception of worth. Just as Donald Trump evaluated his real estate assets and arrived at a value, the bank he was negotiating with was doing likewise. This process is an integral part of every negotiation that happens every day, no matter how big or how small the deal may be.

The question becomes, what would stop leftist zealots from using laws similar to 63 (12) to prosecute any political opponent who engaged in a transaction they deemed “unfair”?

For example, let’s say I researched local comps, consulted with my realtor, and arrived at the conclusion my house was worth $1 million. So, my house goes on the market and eventually sells for asking price. The deal is consummated, and both the buyer and seller are satisfied.  

But what if I was a high-profile local politician advocating America First ideas in a leftist jurisdiction? Could a prosecutor examine the deal, use the local assessor’s fair market value of $750k, and charge me with fraud because I over-inflated the value of my home by $250k when I sold it?

Even if the person who purchased my house believed they got a good deal, would this still be a fraudulent transaction in the eyes of Letitia James and Arthur Engoron?

James and Engoron have opened a Pandora’s box for potential abuse of fraud statutes across the country, which is why Congress must step in and pass a bill that prohibits prosecution under any federal, state or local fraud statute when there is not an obvious and verifiable victim.

It is remarkable the lengths these leftist lunatics are forcing us to go to in order to preserve some semblance of decency fairness, and justice in America.