Testimonies in Fraud Trial Indicate that Trump’s Penthouse Valuation Elevated by Millions Through Celebrity Factor, Say Executives

In a recent trial hearing, corporate leaders from Donald Trump’s business empire admitted that they inflated the estimated value of his Trump Tower penthouse by $20 million, attributing part of this to Trump’s celebrity status. This was according to Thursday’s testimony by former Trump Organization controller, Jeffrey McConney, who provided insights into the calculations that are pivotal to Trump’s ongoing civil business fraud trial in New York.

An additional $100 million increase in the penthouse’s estimated value originated from a solitary email correspondence with a real estate broker. This broker had neither conducted an official appraisal nor personally inspected the tri-level property. Moreover, the broker was misled to believe that the property was three times larger than it actually was.

The lawsuit, spearheaded by New York Attorney General Letitia James, accuses the former U.S. president and his senior executives of fraudulent activities, alleging that they artificially inflated his net worth to mislead lenders among others. Trump, for his part, vehemently denies any unlawful conduct.

During a pretrial deposition, Trump argued that his financial documents were not intended to be considered as strictly accurate valuations but rather as an assemblage of his properties. He stated that numbers included in these documents were, at times, mere approximations.

However, correspondence presented in court indicates that the financial documents in question were crucial to some of Trump’s loan transactions. McConney confirmed this by presenting letters to a bank in which he enclosed Trump’s financial statements for the years 2015 and 2016 as mandatory for a loan pertaining to his Seven Springs estate located north of New York City.

To determine the value of the penthouse, Trump’s corporate team selectively searched through real estate listings, focusing solely on the highest-priced comparable apartments, McConney testified. When queried about the abrupt $100 million increase in 2012, McConney cited an email from real estate agent Kevin Sneddon, who had given a rapid estimate based on the asking price of a similar property in another Trump-owned building in Manhattan. This property eventually sold for only 40% of its asking price.

In the subsequent year, McConney added an extra $20 million to the penthouse’s estimated value, elevating it to $200 million. This adjustment, he revealed, was partly predicated on the advice of a Trump real estate executive, who believed that the celebrity allure of the apartment justified a higher valuation.

Furthermore, McConney acknowledged that he personally calculated an additional $227 million increase in the value of Trump’s Wall Street office building, instead of relying on formal bank appraisals. Such inflated valuations were incorporated into Trump’s financial statements, which were then distributed to banks, insurers, and other stakeholders. Attorney General James labels these actions as “consistent and recurrent fraud.”

Trump retorts that the lawsuit is a political maneuver by James, a Democrat, aimed at undermining his potential 2024 presidential bid. Trump, a leader in the Republican field, opted not to attend Thursday’s court session, although he was present for the preceding three days.

Presiding Judge Arthur Engoron refuted McConney’s claim that no “correct method” exists for determining property valuations. He argued that the appropriate procedure for such calculations is commonly understood, even by high school students.

In addition to the civil case, Trump faces a multitude of criminal charges, to which he has entered pleas of not guilty. These charges include conspiracy to subvert the results of the 2020 election, illegal retention of classified documents, and fraudulent business record-keeping linked to hush money payments.

Court documents filed late Wednesday by Trump’s legal team sought to dismiss the hush money case, deeming the prosecution a politically driven assemblage of legally flawed charges. Federal prosecutors are expected to counter this argument, as both sides await further legal developments.

To maintain compliance with the court’s earlier ruling, Judge Engoron has ordered both parties to submit names of possible receivers by October 26 and has instructed the defendants to notify a court-appointed monitor of any efforts to form new entities for the purpose of holding or acquiring assets.

The trial continues, with James’ legal team seeking $250 million in penalties and a prohibition on Trump conducting business in New York State.

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More about Trump civil fraud trial

• New York Attorney General Letitia James’ Official Statement on the Lawsuit
• Overview of Donald Trump’s Civil Fraud Trial
• Guide to Asset Valuation Methods and Legalities
• Background on Jeffrey McConney’s Role in the Trump Organization
• Understanding New York’s Civil Fraud Laws
• Timeline of Donald Trump’s Legal Battles