By Geoff Earle, Deputy U.S. Political Editor and Daniel Bates In New York For Dailymail.Com
12:17 25 Mar 2024, updated 14:29 25 Mar 2024
- The trial has been put off until at least mid-April because of the recent delivery of tens of thousands of pages of records from a previous federal investigation
- Monday is deadline for him to pay massive fraud judgment pending his appeal
- Trump howled that the award put his real estate ‘babies’ at risk
Donald Trump began a pivotal day in his legal saga with an attack on the judge and prosecution in his New York fraud trial as the Stormy Daniels ‘hush’ money case faced a key hearing while his real estate empire was under threat.
He attacked ‘crooked’ politicians, claimed all the cases against him were ‘rigged,’ blasted a New York judge’s massive $454 million court judgment puts his property ‘babies’ at risk, and claimed the entire country was ‘CORRUPT.’
‘This is a witch hunt. This is a hoax. Thank you,’ Trump said in unusually brief remarks inside Manhattan criminal court.
That came after Trump left his Trump Tower apartment – one of many assets under threat amid DA Letitia James’ threats to seize property – and failed to raise his fist, a defiant gesture he sometimes makes when heads to court.
The former president once again claimed his prosecution in multiple jurisdictions was ‘coordinated’ by the White House, even as local authorities in New York prepared to slap liens on valuable properties following DA Letitia James’ threat to ‘seize’ properties if Trump failed to make good on a $454 million judgment against him.
After boiling over online, Trump visited court Monday morning for the start of his criminal trial where he is charged with 34 counts of falsifying business records over $130,000 payments to the porn star.
‘These are Rigged cases, all coordinated by the White House and DOJ for purposes of Election Interference. THE NUMBER ENGORON SET IS FRAUDULENT. It should be ZERO, I DID NOTHING WRONG! The D.A. Case, that I am going to today, should be dismissed. No crime. Our Country is CORRUPT!’ Trump wrote in one angry post on his Truth Social network.
‘Crooked Pols!!! There should be no FINE. Did nothing wrong!’ Trump fumed in another, where he used language indicated just how personal were the real estate assets under threat of being seized pending his appeal of Judge Arthur Engoron’s judgment.
‘Why should I be forced to sell my “babies” because a CORRUPT NEW YORK JUDGE & A.G. SET A FAKE AND RIDICULOUS NUMBER. “TAKE HIS CASH SO THAT HE CAN’T USE IT TO DEFEAT HIS POLITICAL OPPONENT, CROOKED JOE BIDEN.” ELECTION INTERFERENCE, ALL HEADED UP BY THE WHITE HOUSE – THIS INCLUDES FANI AND THE CORRUPT MANHATTAN D.A. BRAGG ADMITTED THERE WAS NO CRIME, WAS MORTIFIED BY WHAT MARK POMERANCE DID – AND HE SHOULD BE. WITCH HUNT!’ he wrote.
His posts continued even as he was en route and parked outside Manhattan criminal court, hitting many of the same themes in his repeat postings.
‘People must continue to speak of, and remember, that the Engoron number of $450,000,000 for doing absolutely NOTHING WRONG is a big part of the crime being perpetrated against me by Crooked Joe Biden and his political Hacks and Thugs. Engoron’s fraudulent valuation of Mar-a-Lago for $18,000,000, when it is worth 50 to 100 times that amount, is another piece of the Election Interference HOAX. It’s all a giant and totally illegal Witch Hunt against Biden’s Political Opponent!’ Trump wrote.
‘Crooked Pols!!! There should be no FINE. Did nothing wrong! Why should I be forced to sell my “babies” because a CORRUPT NEW YORK JUDGE & A.G. SET A FAKE AND RIDICULOUS NUMBER. “TAKE HIS CASH SO THAT HE CAN’T USE IT TO DEFEAT HIS POLITICAL OPPONENT, CROOKED JOE BIDEN.” ELECTION INTERFERENCE, ALL HEADED UP BY THE WHITE HOUSE – THIS INCLUDES FANI AND THE CORRUPT MANHATTAN D.A. BRAGG ADMITTED THERE WAS NO CRIME, WAS MORTIFIED BY WHAT MARK POMERANTZ DID – AND HE SHOULD BE. WITCH HUNT!’
Trump’s comment about Pomerantz was a reference to the former prosecutor who quit the Stormy Daniels case and wrote a book, People vs. Donald Trump, about it.
Trump walked into the courtroom scowling and pursing his lips, wearing his trademark dark blue suit and a bright red tie.
The former President sat at a table with his lawyers and briefly looked back towards the press.
There were 10 court security officers and seven Secret Service agents present in the courtroom, which was packed with more than 60 journalists.
Trump faces a crunch hearing Monday in his hush money case with his lawyers demanding that it be delayed for months.
Judge Juan Merchan will have to decide if the last minute document dump from federal prosecutors should delay the case in the state court in New York.
The Manhattan District Attorney’s office claims that such delays are a ‘red herring’ and part of a ‘strategic delay’.
The hearing is expected to last at least a day.
Trump has denied a 34-count indictment related to him falsifying business recorded in connection with a $130,000 hush money payment to porn star Stormy Daniels.
The payment was made just days before the 2016 election and prosecutors claim it amounted to an illegal campaign contribution.
The trial was supposed to begin on March 25th but was delayed until at least mid-April after the US Attorney’s Office in Manhattan released more than 200,000 pages of evidence from its inquiry into Michael Cohen, Trump’s former personal lawyer.
But the Manhattan District Attorney’s office, which is bringing the hush money case, says that just 270 pages of the material is relevant and that the case should go ahead next month.
Trump and his lawyers have also torn into Manhattan District Attorney Alvin Bragg, who brought the case, for trying to bury information that would damage Cohen’s credibility.
Should the trial go ahead it will be the first of four criminal cases that Trump faces.
He is accused of election interference at a court in Washington, D.C. over his election overturn effort but the case is on hold pending a Supreme Court ruling on whether he has immunity.
Trump faces a trial in Florida for mishandling classified documents but it is mired in delays and a tentative date for the trial this summer appears unlikely.
He is also accused of election interference in Georgia, however there is no date yet set and prosecutors have been ensnared in allegations of improper behaviour.
Trump has said that he does not have the money to pay the $454 million despite claiming to be worth billions of dollars.
The New York State Attorney General, Letitia James, has already taken steps that could be a prelude to seizing Seven Springs, Trump’s golf course and private estate just north of Manhattan.
Trump could receive a massive boost when his social media company Truth Social floats on the stock market which could net him $3.5 billion.
But the windfall would be on paper only for at least six months due to laws which forbid him from selling too soon.
New York Judge Juan M. Merchan has summoned both sides to court Monday to explain what happened, so he can evaluate whether to fault or penalize anyone and decide on the next steps.
Trump is charged with falsifying business records. Manhattan prosecutors say he did it as part of an effort to protect his 2016 campaign by burying what Trump says were false stories of extramarital sex.
Trump has pleaded not guilty and says the prosecution is politically driven bunk. The prosecutor overseeing the case, Manhattan District Attorney Alvin Bragg, is a Democrat.
The case centers on allegations that Trump falsely logged $130,000 in payments as legal fees in his company’s books ‘to disguise his and others´ criminal conduct,’ as Bragg’s deputies put it in a court document.
Rather, they say, Cohen was just recouping money he’d paid porn actor Stormy Daniels on Trump’s behalf, so she wouldn’t publicize her claim of a sexual encounter with him years earlier.
Trump’s lawyers say the payments to Cohen were legitimate legal expenses, not cover-up checks.
Cohen pleaded guilty in 2018 to federal charges, including campaign finance violations related to the Daniels payoff.
He said Trump directed him to arrange it, and federal prosecutors indicated they believed him, but they never charged Trump with any crime related to the matter.
Cohen is now a key witness in Manhattan prosecutors’ case against Trump.
Trump´s lawyers have said Bragg’s office, in June, gave them a smidgen of materials from the federal investigation into Cohen.
Then they got over 100,000 pages more after subpoenaing federal prosecutors themselves in January.
The defense argues that prosecutors should have pursued all the records but instead stuck their heads in the sand, hoping to keep information from Trump.
The material hasn´t been made public.
But Trump’s lawyers said in a court filing that some of it is ‘exculpatory and favorable to the defense,’ adding that there’s information that would have aided their own investigation and consequential legal filings earlier in the case.
Bragg’s deputies have insisted they ‘engaged in good-faith and diligent efforts to obtain relevant information’ from the federal probe.
They argued in court filings that Trump’s lawyers should have spoken up earlier if they believed those efforts were lacking.
Prosecutors maintain that, in any event, the vast majority of what ultimately came is irrelevant, duplicative or backs up existing evidence about Cohen’s well-known federal conviction.
They acknowledged in a court filing that there was some relevant new material, including 172 pages of notes recording Cohen´s meetings with the office of former special counsel Robert Mueller, who investigated Russia´s 2016 election interference.
Prosecutors argued that their adversaries have enough time to work with the relevant material before a mid-April trial date and are just raising a ‘red herring.’
Trump’s lawyers also have sought to delay the trial until after the Supreme Court rules on his claims of presidential immunity in his election interference case in Washington. The high court is set to hear arguments April 25.
On Friday, he claimed to have $500 million in cash hours before shareholders voted through a merger of his media company that put his paper stock at the venture at $3.3 billion.
New York DA Letitia James has said if Trump hasn’t made good on a $454 million court judgement against him by then from his New York fraud trial, she will begin seizing properties – hitting that Trump’s prized Art Deco skyscraper 40 Wall Street could be in her sights.
She also appears to be eyeing Trump’s Westchester golf club and Seven Springs estate, registering judgments in Westchester County.
The former president was boiling over online at the prospects the state may act against him. He wrote a series of fundraising pitches telling New York to ‘keep your filthy hands off Trump Tower.’
Then he fulminated online about the judge who slapped the stunning $454 more award on him – which increases by more than $100,000 per day as he moves to appeal.
‘Arthur Engoron is a Rogue Judge who was intimidated by the big, nasty, and ugly mouth of Leticia James, considered by many to be the WORST Attorney General in the U.S. She is a Low IQ individual who campaigned for Governor, using my name, and got TROUNCED,’ he posted on his Truth Social site.
‘She and her PUPPET Engoron, who valued Mar-a-Lago at $18,000,000 when it is worth 50 to 100 times that amount, have destroyed all business prospects for New York State, that is already dying, or dead. But have no fear —When I become the 47th President, we will MAKE NEW YORK GREAT AGAIN!’
- Trump was ordered to pay more than $350 million and barred from doing business in New York for 3 years
- The court found Trump dramatically inflated the values of multiple properties including his Trump Tower penthouse and Mar-a-Lago estate
Donald Trump has long touted his vast real estate empire, but the future of the embattled former president’s property holdings remains unclear after the former president was ordered to pay more than $350 million in the blockbuster civil fraud trial and banned from doing business in New York for three years.
Judge Arthur Engoron issued the order on Friday. Trump’s sons Eric and Don Jr. are also banned from serving in top roles at New York company for two years and ordered to pay $4 million each.
It’s unclear what exactly the ruling means for the former president’s finances and properties. Much of his wealth is tied up in real estate. Trump has to come up with the money or secure a bond within 30 days.
In the end, Trump could have to sell property or other assets to cover his legal penalties.
The former president’s lawyer Alina Habba has vowed to appeal the decision calling it ‘a manifest injustice – plain and simple.’
The ruling follows an explosive three-month court case in which Trump was accused of massively inflating the value of his properties including his Trump Tower penthouse and Mar-a-Lago estate to obtain favorable bank loan terms.
During the trial, the former president railed against the judge and prosecutor arguing his financial statements were perfect, he is innocent and was being targeted by political opponents.
Here’s a breakdown of the properties that Trump is accused of inflating the values of:
Trump Tower and the penthouse apartment which Trump claimed was three times its actual size
Located on Fifth Avenue, Trump Tower is perhaps the most recognizable property carrying the former president’s name and is headquarters of the Trump Organization.
Prosecutors said Trump inflated the value of his Manhattan penthouse in Trump Tower by about $200 million when he tripled the estimate of the square footage from 11,000 square feet to 30,000 square feet.
Trump had valued the apartment at $327 million, which James called ‘absurd.’
The former president claimed it was an ‘honest mistake’ and was immediately corrected.
Trump Park Avenue which Trump valued based on the units’ market value but were rent stabilized and worth far less at $84.5 million
The Trump Organization received a valuation for Trump Park Avenue, a 32-story condo building with 120 apartments and eight penthouses, in 2020 at $84.5 million.
On a 2020 statement of Trump’s financial condition he listed the property being worth $135.8 million.
James’ team found that in 2011 and 2012, Trump ‘ignored legal restrictions’ listed 12 rent-stabilized units in the building by what they would be worth if they could be rented out at market value. Trump claimed the units were worth $50 million, over 65 times the $750,000 those units were appraised at in 2010.
Trump’s Seven Springs estate which he valued at $291, nearly ten times what it was appraised for only a few years prior
In 1995 Trump purchased his 213-acre estate in Westchester County, New York for $7.5 million.
Two decades later in 2006 it was found to be worth $30 million, but Trump’s statements of financial condition from 2011 to 2021 found the property to be worth $261 million and $291 million.
40 Wall Street which Trump listed at $300 million more than what it was found to be worth at $530 million
The Trump building at 40 Wall Street, where Trump owns the ground lease was valued at $220 million in 2012. The Trump Organization listed the property’s value at $530 million in 2013.
Trump did not factor in escalating rent expenses for his Niketown valuation in the mid-$400 million range
Trump owns two ground leases for a space that adjoins Trump Tower that for many years he rented to Nike. In 2020 and 2021 Trump reported the value of the property was in the mid-$400 million range, while James’ office found the property to be worth $225-$250 million range, arguing that Trump had not factored in ‘escalating scheduled rent expenses.’
Trump valued Mar-a-Lago at nearly 10 times what it was worth at $739 million
James argued Trump’s glamorous Florida golf resort where he currently lives was valued at $739 million under the ‘false premise’ that it was unrestricted property and could be developed for residential use.
Her office pointed out that Trump donated the residential development rights of the property and sharply restricted making any changes.
The court found Trump inflated the value of Mar-a-Lago as much as 2,300 percent, ruling its valued between $18 million and $27.6 million based on the Palm Beach County tax appraiser’s estimates.
During the case Trump claimed Mar-a-Lago was really worth up to $1.5 billion.
Trump International Hotel and Tower in Las Vegas which Trump told tax authorities was worth far less than what his financial statement showed at $108 million
Trump owns a 50 percent stake in a hotel condominium tower together with businessman Phillip Ruffin. In 2015 the Trump Organization submitted a $24,950,000 valuation to contest taxes they owed to Nevada, but the same year his statement showed the property to be worth $108 million.
Turnberry golf course which Trump valued on a fixed asset scheme at $127 million even though it has been operating at a loss
In 2017, Trump’s golf course in Turnberry, Scotland, was valued at nearly $127million. But James insists it has operated as a loss since then, and says it was ‘false and misleading’ of Trump to use a valuation of the course based on a fixed asset scheme.
Trump Lawyer Alina Habba slammed the devastating ruling and has vowed to appeal.
‘This verdict is a manifest injustice – plain and simple,’ Alina blasted the decision in a statement provided to DailyMail.com. ‘It is the culmination of a multi-year, politically fueled witch hunt that was designed to “take down Donald Trump,” before Letitia james ever stepped foot into the Attorney General’s office.’
Habba goes on that countless hours of testimony ‘proved that there was no wrongdoing, no crime, and no victim.’
Things are not OK in Realtorland. The US housing market is still reeling from pandemic-era shocks, home sales are stuck in a rut, and mortgage rates, while inching downward, are still near two-decade highs. It’s a bad time to be a buyer, and maybe a worse time to be a seller.
Despite all this upheaval, there’s another story brewing in which the stakes for everyone in real estate, from agents to the average consumer, are even higher. It won’t have anything to do with the debate over whether you should put your hard-earned cash toward rent or a down payment. Instead, it’ll be about court cases.
The biggest threat facing the industry is a mounting wave of class-action lawsuits that accuse the National Association of Realtors, along with some of the country’s biggest real-estate brokerages, of conspiring to rip off consumers by keeping the commissions paid to agents unfairly high. These cases are expected to reach major milestones in the next year, and the ramifications could be staggering: Tens, if not hundreds, of billions of dollars hang in the balance. Hundreds of thousands of Realtors could see their commissions slashed, which might force many out of the business. The old way of buying and selling homes could go away forever.
2024 will mark the beginning of a great experiment in real estate. The status quo won’t change overnight — there will be more courtroom showdowns before that happens — but some forward-thinking brokerages and agents, as well as a handful of startups, are already trying to figure out what comes next. Things are about to get really weird — and for American homebuyers, that could be great news.
The old way in jeopardy
If you’ve bought a home, you probably never cut a check to the agent who held your hand through the ordeal. For decades, agent commissions have been mostly out of sight and out of mind for homebuyers. But in 2024, many buyers and sellers may have to start thinking hard about just how much they’re willing to pay their real-estate agents.
When a house trades hands, the money usually works its way down a circuitous path — the buyer pays the seller, who uses a slice of that sum (usually 5% to 6% of the final sale price) to pay their agent, who then splits that money with the buyer’s agent. I’ve previously written about why the system works this way and the arguments for and against the model, but as a recap: Consumer advocates say this setup discourages market competition between agents. If you’re a buyer, you want to pay as little as possible, but your agent stands to make more if the home price goes up. Plus, it’s the seller who decides what percentage each agent will make before even listing their house. As John Kwoka, an economist and antitrust researcher at Northeastern University, told me: The incentives aren’t aligned.
There are going to be real-estate agents who are not able to articulate, let alone demonstrate, their value. Those folks will probably be out of the business very quickly.
On the other hand, the NAR argues the system is designed to get a deal closed as efficiently as possible. When an offer comes in, there’s no bickering over commissions — everyone already knows who will get paid what. And the NAR, as well as the brokerages named in the lawsuits, has maintained that commissions are always negotiable. If you’re a seller and you want the agents to split only 1% of the sale price — or even 0% — you can do that.
The first major lawsuit to put this argument to the test, Sitzer/Burnett v. NAR, went to trial in 2023 — and it wasn’t pretty for the real-estate establishment. On Halloween, jurors deliberated for just a few hours before finding the defendants liable, siding with thousands of home sellers who claimed they’d been strong-armed into paying their agents the customary 5% to 6% of the sale price and dishing out $5.3 billion in damages.
And if the case has cracked open the door to major changes to the commission model, 2024 is shaping up to be the year it’ll be knocked down. The first thing to watch for will be an official ruling from the judge in the Sitzer/Burnett case, expected sometime in the spring. While the jury has already sided with the plaintiffs, the judge still needs to decide which kinds of actions the NAR and the brokerages will need to take to remedy the situation. In this case, it’s pretty clear what the plaintiffs and their lawyers want: They argue for “decoupling,” or changing the rules to make sure that buyers and sellers pay their agents separately. At the most extreme end, buyer’s and seller’s agents might be expressly prohibited from splitting commissions. The NAR has vowed to appeal the verdict, and said it expects arguments to take place later in 2024.
In addition to a ruling on the issue of decoupling, a larger case, Moehrl v. NAR, should reach trial in the last quarter of 2024. That suit involves sellers from a broad swath of the US, including Dallas, Phoenix, Philadelphia, and Miami, and damages could stack up to more than $40 billion.
Other class-action attorneys are bringing lawsuits as well. The two big cases so far have focused on home sellers, but a new case filed in November, known as Batton 2, takes aim at brokerages such as Douglas Elliman, Compass, and Redfin on behalf of a nationwide group of buyers. It’s not yet clear how big the damages could be in this case, but the sheer size of the plaintiff class points to a much-larger figure than that of the Moehrl case.
Meanwhile, the head plaintiff in the Sitzer case has filed another nationwide class-action suit against the NAR and brokerages that weren’t included in the original case, including Compass, eXp, and Redfin. While these cases won’t reach trial anytime soon, they put increasing pressure on the industry to find ways to settle, rather than risk years of time-consuming and costly litigation.
A new age of experimentation
Some real-estate agents may wait until a ruling from the judge in the Sitzer/Burnett case before changing their practices, or hold out hope until the last appeal has worked its way through the courts. Others have read the writing on the wall and are already starting to get creative with how they get paid.
“It’s a matter of allowing alternatives to be experimented with and see what sticks,” Kwoka, the Northeastern economist, told me. “We’re about to do that, ready or not.”
Even those who think the jury got it wrong are accepting that commissions are likely going to change. That group includes Brian Boero, the CEO of 1000watt, a brand and strategy agency that advises real-estate brokerages and mortgage companies. Boero said he’s busy prepping his clients for the reality of decoupling, a scenario that he expects to arrive “sooner rather than later.” According to Boero, the key for agents is to clearly explain to buyers what they do, how they get paid, and why they may need to start getting paid differently. In many instances, those conversations have been conveniently swept under the rug for decades.
“There are going to be real-estate agents who are not able to articulate, let alone demonstrate, their value,” Boero told me. “Those folks will probably be out of the business very quickly.”
Many buyer’s agents — at least the competent ones — will be fine. After all, despite all kinds of technological advances, more people are using agents today than they were before the pandemic.
“You would be foolish to buy a home without an expert helping you,” Boero said. “But I also think that a smaller, smarter, more professional real-estate industry is going to come out of this, and I think that’s a good thing.”
Decoupling also opens the door to further experimentation with agents’ fees. Joe Stockton, an attorney who previously worked at Zillow and has spent years thinking about creative fee arrangements, described to me one possibility: a tiered system in which buyers pay more for progressively broader offerings. At the top would be the “white-glove service,” or what you might expect of a sought-after agent today — the market insights, the pavement pounding in search of the best deals, all those hours spent advising and consoling and haggling with the sellers. Something like this could command $250 an hour, like a good lawyer, but be capped at some percentage of the sale price, like 3.5%. The tier below would offer good service but wouldn’t go above and beyond, and would notably exclude all that initial legwork; the agent could step in once you’d already found your options online and would command a smaller fee, like 1.5% of the sale price. At the most basic level, an agent could charge $2,000 for just making sure that nothing goes awry — you’d get none of the hand-holding and advisory services, but you wouldn’t have to pay for them, either.
“In either situation, a one-size-fits-all compensation model and fee structure doesn’t make sense,” Stockton told me. “In this new world order, the agent and the client will have the flexibility to negotiate something that makes sense for them both.”
It’s a matter of allowing alternatives to be experimented with and see what sticks. We’re about to do that, ready or not.
Right now, agents are mostly incentivized to close a transaction quickly — a $10,000 difference in the sale price would shift the amount an agent gets paid by only about $300 on the high end. But there’s a world in which a buyer’s agent’s cut goes up if they’re able to knock $50,000 off the list price, or if they find you a deal below a certain dollar amount that meets your criteria. Similar incentives could be baked into the commission for a seller’s agent as well. Nic Johnson, the CEO of ListWise, is working on such a solution: The company proposes a model in which agents bid for listings, which effectively sets the terms for how much they want to make if they’re able to boost the price of your home. So while an agent might be guaranteed only a 0.75% commission if the home sells for a predetermined baseline price, they may stand to increase that cut by several percentage points if the price goes up by $50,000 or $100,000.
“You need to make it so that the agent’s pay meaningfully varies based on different sale prices,” Johnson told me. “To me, that’s really the important thing: making sure the agent’s incentives are aligned with the homeowner’s.”
This all sounds pretty good for regular buyers and sellers — lower fees, a clearer picture of what you’re paying for, and a greater emphasis on negotiating rather than accepting the status quo. An analysis from a senior fellow at the Consumer Federation of America estimated that American consumers could save as much as $20 billion to $30 billion every year if commission rates fell in line with those of other developed markets, such as Australia, the Netherlands, and the UK. But there may be downsides, particularly for buyers who might not have enough cash on hand to pay their agents out of pocket. There are possible solutions — industry bigwigs could push for changes to mortgage rules so that commissions would be folded into a loan, or sellers could agree to give buyers rebates so they can pay their agents after a sale closes — but they’re far from guaranteed at this point. In the absence of those kinds of fixes, some homebuyers might be forced to accept less help on their purchase or even decide to brave the market alone.
These kinds of questions won’t all be resolved in 2024, but this coming year will mark the beginning of an experiment that could alter real estate beyond the typical boom-and-bust forces of mortgage rates and home prices. It’s time to prepare for a new world that’s rapidly approaching — one in which tinkering with agents’ fees will migrate from the periphery to the mainstream.
“It’s a matter of driving out excess costs,” Kwoka, the economist, said. “But more importantly, it’s just a matter of allowing for new arrangements to see if they work.”
James Rodriguez is a senior reporter on Business Insider’s Discourse team.