Former President Donald Trump’s trial for civil business fraud took a significant turn on Tuesday as the focus shifted to the valuation of his Mar-a-Lago club in Palm Beach, Florida.
During the defense’s testimony, a Florida real estate attorney argued that the club could be sold as a residential property, despite previous legal documents where Trump stated his intention to exclusively use it as a club. This restriction is crucial to the claims made by New York state lawyers, who allege that the former president fraudulently exaggerated the value of the property.
To support their argument, a Palm Beach luxury real estate broker presented a captivating video showcasing the historical estate and testified that its value exceeded $1 billion in 2021.
“It’s truly breathtaking and absolutely incredible,” stated broker Lawrence Moens during his testimony. However, the proceedings took an unexpected turn when he briefly answered a personal phone call while on the witness stand.
Covering 17 acres (7 hectares) and surrounded by waterfront on two sides, the estate and social club serves as Trump’s residence. It is a location where the former president, who is currently the leading Republican candidate for the 2024 election, has held significant meetings both during and after his presidency. Additionally, it is the place where federal special counsel Jack Smith claims that Trump stored classified documents in an inappropriate manner, an allegation that Trump vehemently denies.
Mar-a-Lago plays a crucial role in the ongoing New York civil case, fueling Trump’s intense frustration.
According to State Attorney General Letitia James’ lawsuit, the former president and his company deceived lenders and others by presenting financial statements that significantly inflated the values of certain prime assets, including Mar-a-Lago.
In a pretrial ruling, Judge Arthur Engoron determined that Trump and his company committed fraud, as they exaggerated Mar-a-Lago’s value by up to 2,300% compared to the valuations provided by the Palm Beach County tax appraiser, which ranged from $18 million to $28 million.
Trump vehemently denies any wrongdoing, asserting that his financial statements actually underestimated his assets and were accompanied by disclaimers that absolve him of any liability for errors.
His frequent grievances about the case often revolve around the allegations concerning Mar-a-Lago. Just recently, on his Truth Social platform, Trump accused the judge of “fraudulently reducing the value of Mar-a-Lago.”
Mar-a-Lago plays a crucial role in the ongoing New York civil case, fueling Trump’s intense frustration.
According to State Attorney General Letitia James’ lawsuit, the former president and his company deceived lenders and others by presenting financial statements that significantly inflated the values of certain prime assets, including Mar-a-Lago.
In a pretrial ruling, Judge Arthur Engoron determined that Trump and his company committed fraud, as they exaggerated Mar-a-Lago’s value by up to 2,300% compared to the valuations provided by the Palm Beach County tax appraiser, which ranged from $18 million to $28 million.
Trump vehemently denies any wrongdoing, asserting that his financial statements actually underestimated his assets and were accompanied by disclaimers that absolve him of any liability for errors.
His frequent grievances about the case often revolve around the allegations concerning Mar-a-Lago. Just recently, on his Truth Social platform, Trump accused the judge of “fraudulently reducing the value of Mar-a-Lago.”
The judge referenced the Palm Beach County tax assessment, which was based on Mar-a-Lago’s annual net operating income as a club, rather than its resale value as a home or its reconstruction cost. This method of valuation is the county’s standard for social clubs and results in tax benefits for Trump. His property tax bill this year is $602,000, whereas it would be approximately $18 million if Mar-a-Lago were assessed at $1 billion.
Additionally, in a 2002 agreement with the National Trust for Historic Preservation, Trump and the club relinquished any rights to develop the property for any purpose other than club usage.
However, when compiling Trump’s annual financial statements, his former corporate controller Jeffrey McConney valued Mar-a-Lago club as if it could be sold as a private home. The statements indicated a value as high as $612 million in 2021.
James claimed that the mentioned principles disregarded the accord made with the National Trust. The attorney general, who is affiliated with the Democratic party, asserts that Trump should have assessed Mar-a-Lago in the same manner as the county does, considering its club earnings.
However, Trump, during his testimony last month, expressed his belief that he still possesses the authority to redefine the property as a personal residence. Additionally, real estate attorney John Shubin, based in Miami, testified on Tuesday that “there are no restrictions whatsoever on utilizing Mar-a-Lago as a single-family dwelling.”
He observed that the property functions as both a club and Trump’s personal residence. Shubin also pointed out that a 1993 agreement between Trump and the town of Palm Beach stipulated that Mar-a-Lago should primarily serve as a private social club, but could be used as a private residence if the club was “abandoned.”
Trump’s legal team argues that this agreement justifies valuing the property as if it could be sold as an individual residence, without any issues.
“Anyone who purchases it would essentially step into President Trump’s shoes,” stated defense attorney Christopher Kise.
According to some Palm Beach luxury real estate agents, the property could be sold for $300 million to $600 million, and potentially even reach $1 billion or more if it incites a bidding war among extremely wealthy contenders.
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