by After spending two days on the witness stand for the second time, Jeffrey McConney had had enough.
Through tears, he told a defense attorney for his former boss Donald Trump and his co-defendants that he “gave up” his longtime accounting role with the Trump Organization after a wave of legal threats against him.
“I just wanted to relax and not be accused of misrepresenting assets to the company I loved working for,” he testified in a lower Manhattan courtroom on Tuesday. “I’m sorry.”
Mr. McConney is among more than a dozen defendants charged in a sprawling fraud lawsuit by New York Attorney General Letitia James, who has accused the former president, his two grown sons and his chief executive associates of greatly inflating his net worth and assets to to fraudulently obtain favorable finance. terms over ten years in an effort to strengthen the family’s brand building properties in its vast real estate empire.
Judge Arthur Engoron has already found the defendants liable for fraud. In the eighth week of a trial that resulted from the lawsuit, the former president’s attorneys have narrowed their defense: blame the accountants.
Handwritten notes on Mr. Trump’s financial statements at the center of the case suggest that the former president and his top executives had the final say. One of Mr. Trump’s net worth statements from 2014 expressly said “DJT TO FET FINAL REVIEW”.
Mr. Trump, whose own scathing testimony has repeatedly included insults against the judge and attorney general, even admitted at one point that he would sometimes look at those financial condition statements and offer “suggestions ” sometimes.
The civil trial within the New York State Supreme Court will determine the remaining claims in the lawsuit – including insurance fraud, falsifying business records and conspiracy charges – and what penalties, if any, will be faced by Mr. Trump and his co-defendants.
Ms James is seeking at least $250m to recover unearned gains, and to effectively block the Trumps from doing business in the state. The judge’s pre-trial ruling ordered a receiver to take possession of the Trumps’ property, but that decision has been frozen by an appeals court for some time.
Defense attorneys are expected to return to court on November 27 and continue their case until December 15.
Mr. McConney, who joined the Trump Organization in 1987 and continued to work for the company until last year, was granted immunity in exchange for his testimony in an unrelated but parallel criminal prosecution of the Trump Organization last year.
The company was fined $1.6m after a New York City jury convicted two of its subsidiaries on 17 charges stemming from what prosecutors described as a year-long scheme to avoid paying payroll taxes by giving kickbacks for top executives with tax-free benefits.
In that case, Mr. McConney admitted that he broke the law to help Trump Organization executives in the scheme.
Allen Weisselberg, the former longtime chief financial officer of the Trump Organization, also pleaded guilty to several tax crimes stemming from the criminal investigation into the former president’s business empire. He was sentenced to five months in prison earlier this year.
Mr. McConney was among the first witnesses to testify in the fraud trial last month, when lawyers for Ms. James’ office questioned him and others about statements of Mr. Trump’s financial condition.
Those documents allegedly included inaccurate valuations of Mr. Trump’s assets, which were provided to banks, insurers and other parties in order to obtain favorable terms for loans and other benefits.
Mr McConney said he was responsible for those statements from 2011 to 2017, but resigned from the main accounting firm he hired to prepare them.
“We as the Trump Organization did not prepare the statement,” he said during his testimony last month.
However, Mr McConney acknowledged that Mr Trump himself would seek a final review of the compilation of the statements of financial condition before submitting them.
The former president later confirmed that he had given full authority to Mr McConney and Mr Weisselberg for those statements.
But defense attorneys turned again and again to the longtime accountant of the firm that compiled them: Mazars USA.
While being questioned at length for nearly three days on the witness stand early in the trial, that accountant, Donald Bender, testified that the Trump Organization provided him with the data used to compile those financial statements.
Under questioning this week, Mr McConney said Mr Bender had “access to anything he wanted” and was “basically an extension of our accounting department” where “anyone could … talk to someone on be.”
“I relied on him for a lot of things,” he said.
Donald Trump Jr. and Eric Trump similarly testified denying their own involvement in manipulating or having any knowledge of their father’s financial condition statements.
“He was an outside accountant that we relied on a lot for all of our accounting needs,” Donald Jr. said.
When it came to the accountants, “I listen to their expertise,” he said.
“Every decision I made was based on information I received from Mazars,” he said. “They were closely involved in every aspect … For accounting purposes, I rely on accountants”
Eric Trump said he knew “almost nothing” during his testimony.
“This is just not something I’ve ever had anything to do with,” he said.
When shown an email he received from Mr. McConney in 2013 about “your father’s annual financial statement,” Eric Trump continued to deny his involvement.
“It wasn’t just something I was involved with,” he said. “I knew nothing, or next to nothing, about the [statements of financial condition]. I never worked on it. … I was responsible for building properties and pouring concrete. This was not in my domain.”
Ivanka Trump also denied having anything to do with those remarks.
“You showed me a few documents and emails and correspondence that make general reference to financial statements but that was not something I was involved with,” she told lawyers for the attorney general.
When their father was questioned about making sure those statements complied with accounting guidelines, he said his accountants had to “do something” with them.
“They got a lot of money to do this work,” Mr. Trump said. “I told two great people to work with the accounting firm to give them anything they needed.”
When it came to identifying fraud, “everyone” was responsible, he said.
When he returned to Judge Engoron’s courtroom this week for another round of evidence, Mr McConney was presented with a 2014 statement about Mr Trump’s financial condition – which was allegedly exaggerated by $3.5bn.
“Would Donald Trump get a final review?” Andrew Amer, a lawyer for the state, asked him.
“That was my understanding, yes,” replied Mr McConney.
Mr. Trump had final review of all other statements until he entered the White House in January 2017, Mr. McConney said.
Mr McConney, in emotional statements from the witness stand on Tuesday, defended the remarks and said he had not meant to offend anyone.
“I think everything was justified. The numbers do not fully reflect the value of these assets,” he said.
“Being hit over the head every time with a negative comment on something is very frustrating,” he said, “and I gave up.”
