Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

One of the recurring scams you’ll run across on Craigslist, Facebook Marketplace, and anywhere where a scammer can operate is the free PS5 or free high end notebook. Substitute any free item really, the scam is the same.

There’s usually a backstory on the gaming systems about how either their kid died and they want someone to get enjoyment from the thing, their kid is terrible and they want them to suffer. The backstory on the notebook is usually cheating husband/wife/whatever and now it’s time for revenge in a fashion in which you actually are agreeing to be part of an illegal transaction (you can’t give someone else’s stuff away, that’s called stealing).

But illegalities aside, you know it’s a scam but what is the scam?

Comes down to it costing $20 or so to ship because even though they’re local somehow this laptop, gaming system, etc requires shipping and possibly an insurance fee against damage and you have to pay it to the scammer. Now, $20 or so for mailing doesn’t seem like a lot for them to gain, but they’re doing it to a whole lot of people simultaneously. Quite often you’re paying a compromised Paypal/Venmo/cash app that the owner isn’t aware yet they’re involved in scamming people.

In my neighborhood we had people offering to purchase homeless people’s identity for use on Cash App / Venmo / etc to use as a “legitimate” looking cash app tunnel for a few hundred dollars. It’s fairly easy to get a formerly legit identity and when you go after the person, well, they sold that to someone else and what are you going to take from them?

Short of it becomes are you going to spend 8-12 hours fighting with PayPal or Mastercard over being scammed $30? File a police report? At least some people are not, saying something to the effect of they didn’t get that much and I’ll be smarter in the future, and thus we have a thriving scam running barely checked until the end of time.

It falls under Advance Fee scams although that page (run by the US govt evidently,) doesn’t address it exactly.

How to identify a scam – what is that free dead kid PS5, or cheating husband Mac notebook? by Paul E King first appeared on Pocketables.

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

One of the recurring scams you’ll run across on Craigslist, Facebook Marketplace, and anywhere where a scammer can operate is the free PS5 or free high end notebook. Substitute any free item really, the scam is the same.

There’s usually a backstory on the gaming systems about how either their kid died and they want someone to get enjoyment from the thing, their kid is terrible and they want them to suffer. The backstory on the notebook is usually cheating husband/wife/whatever and now it’s time for revenge in a fashion in which you actually are agreeing to be part of an illegal transaction (you can’t give someone else’s stuff away, that’s called stealing).

But illegalities aside, you know it’s a scam but what is the scam?

Comes down to it costing $20 or so to ship because even though they’re local somehow this laptop, gaming system, etc requires shipping and possibly an insurance fee against damage and you have to pay it to the scammer. Now, $20 or so for mailing doesn’t seem like a lot for them to gain, but they’re doing it to a whole lot of people simultaneously. Quite often you’re paying a compromised Paypal/Venmo/cash app that the owner isn’t aware yet they’re involved in scamming people.

In my neighborhood we had people offering to purchase homeless people’s identity for use on Cash App / Venmo / etc to use as a “legitimate” looking cash app tunnel for a few hundred dollars. It’s fairly easy to get a formerly legit identity and when you go after the person, well, they sold that to someone else and what are you going to take from them?

Short of it becomes are you going to spend 8-12 hours fighting with PayPal or Mastercard over being scammed $30? File a police report? At least some people are not, saying something to the effect of they didn’t get that much and I’ll be smarter in the future, and thus we have a thriving scam running barely checked until the end of time.

It falls under Advance Fee scams although that page (run by the US govt evidently,) doesn’t address it exactly.

How to identify a scam – what is that free dead kid PS5, or cheating husband Mac notebook? by Paul E King first appeared on Pocketables.

Despite an authoritarian regime's efforts to obstruct free and fair elections, Venezuelans turned out in large numbers to vote for their president last Sunday, hoping for change amid widespread political repression and a humanitarian crisis. The U.S. is deeply implicated in this turmoil, as the disputed election results underscore significant geopolitical stakes and can have a significant impact on American interests.

A government-controlled electoral commission declared Nicolás Maduro the winner of the election, claiming he received 51 percent of the votes. Yet exit polls and tallies by the opposition indicate that over 70 percent of Venezuelans supported the opposition candidate, Edmundo González.

Governments around the world have denounced the election as fraudulent and demanded evidence of Maduro's claimed victory. Leaders such as Argentine President Javier Milei and Italian Prime Minister Giorgia Meloni have expressed their solidarity with the Venezuelan people's desire for change. 

U.S. Secretary of State Antony Blinken has echoed these concerns, claiming that the election results do not reflect the true will of the Venezuelan people. On Thursday, Blinken affirmed that the U.S. recognizes González as the legitimate winner of the Venezuelan elections.

Even left-wing governments like Brazil and Colombia are pressing Maduro to substantiate his claim of victory, but no such proof has emerged. In a bigger turn of events, the Carter Center, one of the few entities invited to observe the Venezuelan election, condemned the electoral commission for its lack of transparency. 

Protests erupted nationwide in response to the disputed election, with thousands taking to the streets. Several statues of former socialist president Hugo Chávez were toppled in the unrest. Clashes with security forces have resulted in hundreds of arrests and at least 17 deaths. 

Strategic Concerns for the U.S.

Supporting the democratic aspirations of Venezuelans is crucial for U.S. interests. A free Venezuela will address key U.S. policy concerns such as the rise in illegal migration, untapped market opportunities, the growing influence of Iran and China in the region, and security risks for international commerce in the region.

Should Maduro remain in power, migration to the United States from Venezuela is expected to surge. Surveys show that over 40 percent of Venezuelans plan to leave the country if Maduro continues as president. This potential influx of refugees could strain U.S. immigration systems and social infrastructure, posing a major humanitarian and logistical challenge.

American firms will also miss out on substantial business opportunities in Venezuela if Maduro stays in power. The country's vast reserves of oil and uranium represent untapped markets that could enhance U.S. energy security. Investing in Venezuela's oil industry could help diversify energy sources and reduce dependency on unstable or unfriendly regions, leading to more stable energy prices and a reliable supply of oil for the U.S. market. 

Maduro's continued rule will also likely increase the presence of U.S. adversaries such as Russia, Iran, and China in the region. Iran plans to expand trade with Venezuela to $20 billion per year, China is heavily investing in the country, and Russia has signed multiple military agreements with the South American country. As Venezuela continues to distance itself from the democratic world, one can only expect these relationships to strengthen. And having a rogue state relatively close to the U.S. border represents security concerns to American businesses and international trade in general. 

To address these challenges, American policy makers need to adopt a more strategic approach. The current administration has focused on negotiating sanction relief for the Maduro regime in exchange for promises to hold free and fair elections. But this has proven insufficient, producing no positive changes in Maduro's behavior.

A new foreign policy approach should include a reassessment of institutions such as the United Nations and the Organization of American States. For years, these institutions have systematically failed to uphold the rule of law and human rights in Venezuela. Additionally, U.S. policy makers should establish measures to prevent regimes from exploiting international treaties and cooperation agreements. This includes sectors like finance and energy, where regimes have undermined democratic nations' interests. Finally, the methodology and effectiveness of sanctions should be reassessed. Despite a series of sanctions imposed by the U.S. on countries like Venezuela, Russia, and Iran, the International Monetary Fund projects economic growth for all these nations in 2024.

Failure to address these issues risks empowering autocrats around the world, jeopardizing U.S. national security, economic performance, and diplomatic standing.

The post Maduro Is Bad for Venezuela and Bad for the U.S. appeared first on Reason.com.

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

You can add the Internal Revenue Service to the ranks of federal agencies conceding that raining taxpayer money on all and sundry to offset the negative effects of pandemic-era closures didn't go as well as intended. Not only was a program meant to offset the cost of paying workers during lockdowns and voluntary social-distancing prone to being gamed, but the "vast majority" of claims submitted to the program show evidence of being fraudulent.

The Tax Man Is Shocked To Discover Fraudsters

In the course of a detailed review of the Employee Retention Credit, "the IRS identified between 10% and 20% of claims fall into what the agency has determined to be the highest-risk group, which show clear signs of being erroneous claims for the pandemic-era credit," the IRS announced June 20. "In addition to this highest risk group, the IRS analysis also estimates between 60% and 70% of the claims show an unacceptable level of risk."

The Employee Retention Credit was offered to businesses that were shut down by government COVID-19 orders in 2020 or the first three quarters of 2021, experienced a required decline in gross receipts during that period, or qualified as a recovery startup business at the end of 2021. But it was clear early on that scammers were taking advantage of giveaways of taxpayer money, either to claim it for themselves or to pose as middlemen helping unwitting business owners file claims.

In March of 2023, the tax agency warned of "blatant attempts by promoters to con ineligible people to claim the credit." In September of that year, it stopped processing claims amidst growing evidence that vast numbers of applications were "improper," as the IRS delicately puts it. In March 2024, the agency announced that its Voluntary Disclosure Program had recovered $1 billion (since raised to over $2 billion) in improper payouts from participants who got to keep 20 percent of the take.

Ultimately, only "between 10% and 20% of the ERC claims show a low risk" for fraud, even by generous federal standards for throwing other people's money at problems largely of government creation.

"We will now use this information to deny billions of dollars in clearly improper claims and begin additional work to issue payments to help taxpayers without any red flags on their claims," commented IRS Commissioner Danny Werfel.

As of the end of May, the IRS "has initiated 450 criminal cases, with potentially fraudulent claims worth nearly $7 billion."

There's More Fraud Where That Came From

Of course, this is only the tip of the iceberg when it comes to pandemic stimulus fraud.

In April, Attorney General Merrick Garland boasted that the COVID-19 Fraud Enforcement Task Force (yes, it's widespread enough to rate its own task force) had "charged more than 3,500 defendants, seized or forfeited over $1.4 billion in stolen COVID-19 relief funds, and filed more than 400 civil lawsuits resulting in court judgements and settlements."

Strong work. But the various pandemic stimulus bills tallied up to trillions of dollars. And a lot more than a few billion ended up in the hands of grifters.

"The total amount of fraud across all UI [unemployment insurance] programs (including the new emergency programs) during the COVID-19 pandemic was likely between $100 billion and $135 billion—or 11% to 15% of the total UI benefits paid out during the pandemic," the Government Accountability Office warned last September.

Earlier, the Small Business Administration's Inspector General found more than $200 billion stolen from the Economic Injury Disaster Loan (EIDL) program and Paycheck Protection Program (PPP). "This means at least 17 percent of all COVID-19 EIDL and PPP funds were disbursed to potentially fraudulent actors," noted the report.

With between 70 percent and 90 percent of claims for the Employee Retention Credit identified as likely scams, either the IRS is a stand-out magnet for grifters or other agencies need to return to their own investigations with a somewhat more skeptical eye.

Stimulus Fueled Inflation as Well as Fraud

It's maddening enough that the federal government is handing out vast sums of money to con artists. But Americans are contending with a 2024 economy in which the U.S. Bureau of Labor Statistics' own inflation calculator finds that it takes $124.77 to purchase what $100 bought in 2019, before anybody heard of COVID-19. Federal stimulus programs are directly to blame for much of that inflationary slippage in the dollar's buying power.

"U.S. fiscal stimulus during the pandemic contributed to an increase in inflation of about 2.6 percentage points in the U.S.," three economists with the Federal Reserve Bank of St. Louis estimated last year. The reason, they said, was that governments "injected large amounts of money into the economy"—money created from thin air to artificially pump up the economy.

"Inflation comes when aggregate demand exceeds aggregate supply," agreed economist John Cochrane of the Hoover Institution and the Cato Institute in a March piece for the International Monetary Fund. "The source of demand is not hard to find: in response to the pandemic's dislocations, the US government sent about $5 trillion in checks to people and businesses, $3 trillion of it newly printed money, with no plans for repayment."

Officials justified the stimulus as a necessary evil to offset economic collapse from often-mandatory pandemic closures by keeping demand flowing with government checks. After conceding that stimulus fueled inflation, the St. Louis Federal Reserve economists argued that massive spending likely prevented "worse outcomes despite the price pressures that may have resulted from the spending."

But officials could have refrained from issuing closure orders so the economy could function without mandated disruptions. That would have made the creation of trillions of dollars from thin air and its distribution around the country entirely beside the point. Then, grifters wouldn't have opportunity to scam hundreds of billions of dollars out of federal agencies, including the IRS.

It's nice that the IRS, like other federal agencies, is catching up with the vast fraud it enabled. But it would be better if government officials weren't constantly addressing problems they created.

The post 'Vast Majority' of Pandemic Employee Retention Credit Claims Are Likely Scams, Says IRS appeared first on Reason.com.

A powerful New Jersey businessman has been accused of Mafia-like behavior in order to enrich himself and his associates on the taxpayer's dime. But is it all that different from business as usual?

At a press conference this week, New Jersey Attorney General Matt Platkin announced a 13-count indictment, with charges including racketeering and extortion, against six defendants—chiefly George Norcross III, whom the New Jersey Monitor referred to as "a Democratic kingmaker widely regarded as New Jersey's most powerful unelected person." In an impressively bold move, George Norcross attended the press conference and sat in the front row, apparently even refusing to switch seats when asked by someone from Platkin's office.

According to the indictment, George Norcross has "led a criminal enterprise" since 2012, whose members "would extort others through threats of economic and reputational harm" in Camden, New Jersey. Specifically, in 2012–13, George Norcross and other indicted co-conspirators "used their political influence to tailor New Jersey economic development legislation to their preferences."

The Economic Opportunity Act of 2013 expanded the state's existing economic development grant programs, allowing a developer to claim "a credit of up to 35 percent of its capital investment, or up to 40 percent for a project located in a Garden State Growth Zone," defined as "the four New Jersey cities with the lowest median family income"—which would include Camden, the state's poorest city. The credits were intended to bring companies to the state or keep them from leaving. Recipients could claim the credits or sell them to other New Jersey taxpayers.

In 2019, The New York Times found that before that law passed, one attorney "was allowed by lawmakers to edit drafts of the bill in ways that opened up sizable tax breaks to his firm's clients." That attorney's firm was Parker McCay—whose CEO was George Norcross' brother, Philip Norcross, who is also indicted. The indictment alleges that after the law passed, Philip Norcross told a group of people, "We re-wrote a tax credit law…that says in essence, if you come to Camden, we're going to give you one hundred percent tax credit for all capital and related costs" over 10 years. "It will cause real havoc, it's unlimited."

Once the law passed, according to the indictment, the defendants "extort[ed] and coerce[d] others" in order to obtain their property along the Camden waterfront, "then occupied the properties they obtained interests in and sold the tax credits they obtained for millions of dollars."

George Norcross also apparently leaned on members of the Camden city government—including then-Mayor Dana Redd, who is also indicted—to pressure owners and developers to sell by denying necessary building permits or publicly disparaging them.

In one given example, George Norcross allegedly threatened a developer who refused to sell, saying he would "f**k you up like you've never been f**ked up before." City officials also denied him a permit to redevelop another site he owned, at Philip Norcross's insistence.

In the end, that developer apparently sold the rights to tax credits that eventually totaled $240 million, for a fraction of that amount. On one property, he sold credits for $1.95 million that would eventually total $18 million.

If this all sounds like a plot from The Sopranos, well, it basically is: For much of its run, the mobsters at the center of that show made money from a waterfront rejuvenation project in Newark, obtained through underhanded dealing with a crooked state official and which afforded plenty of no-show jobs and opportunities for graft.

The allegations against George Norcross are shocking, and yet also unsurprising. After all, the entire affair originated with a state economic development program, which already bears at least a passing resemblance to a Sopranos-style racket.

In 2019, The New York Times found that "over five years, 12 companies threatened to leave New Jersey" for New York—with each company even listing the exact same office complex as its intended destination—"unless the state provided tens of millions in tax credits." In each case, the New Jersey government agreed, totaling over $100 million in taxpayer money, and each company stayed. But the Times found that "nearly all of the 12 companies never seriously considered moving to New York." The leasing agent for the New York office complex even acknowledged, "We are aware that often times the tenant has no intention at all of relocating."

State economic development incentive programs are often sold on these sorts of "but for" incentives—as in, but for this tax break or grant, this company would go elsewhere. But these are rarely actually the deciding factors in a company's decision: In a 2018 paper, Timothy Bartik of the W.E. Upjohn Institute for Employment Research found that "typical incentives probably tip somewhere between 2 percent and 25 percent of incented firms toward making a decision favoring the location providing the incentive. In other words, for at least 75 percent of incented firms, the firm would have made a similar decision location/expansion/retention decision without the incentive."

Companies lobby for state-level handouts, even if they were likely to set up shop in that state anyway. And even by the state agencies' own numbers, the expenditures are rarely worth the cost.

"Beyond the state-specific political ramifications, the case also highlights a persistent problem in corporate subsidy programs that extends well beyond New Jersey: They're too easily corruptible, and they create a vicious feedback loop between political actors and politically connected corporations," writes Pat Garofalo in the Boondoggle Substack. "There's a very clear connection in academic literature between corporate subsidies, political donations, and ultimately corruption."

The George Norcross case, Garofalo writes, "highlight[s] the nexus between corporate tax handouts and corruption that is very often there but not usually this blatant."

Ultimately, the entire affair would just be a lurid story but for the fact that it involved hundreds of millions of dollars in state incentives which will ultimately be borne by New Jersey taxpayers.

The post N.J. Businessman Indicted for <i>Sopranos</i>-Style Economic Development Racket appeared first on Reason.com.

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

"In 2016," Harvard law professor Laurence Tribe writes, quoting Democracy Docket's Marc Elias, "Donald Trump seemed to pull an inside straight by narrowly winning" Michigan, Pennsylvania, and Wisconsin "while losing the popular vote by 3 million. We now know Trump committed 34 felonies to win that election. Without these crimes, he seems almost certain to have lost to Hillary Clinton. She would have been sworn in on Jan. 20, 2017. She would have filled two Supreme Court vacancies and enacted her legislative agenda."*

Since those 34 felonies involved falsified business records that were produced in 2017, that claim is logically impossible. Yet this gloss on the former president's New York conviction echoes similarly puzzling claims by many smart and ostensibly well-informed observers. In their eagerness to embrace the prosecution's dubious "election fraud" narrative, they nonsensically assert that Trump retroactively ensured his 2016 victory by disguising a 2017 hush-money reimbursement as payment for legal services.

Shortly before the 2016 presidential election, Michael Cohen, then Trump's lawyer, paid porn star Stormy Daniels $130,000 to keep her from telling her story about sex with Trump at a Lake Tahoe hotel during a celebrity golf tournament in July 2006. When Trump paid Cohen back in 2017, prosecutors said, he caused the falsification of business records to cover up the arrangement with Daniels by misrepresenting the reimbursement as compensation for legal work. However you view that misrepresentation, it obviously had no impact on the outcome of the election. Yet Tribe, Elias, and other people bizarrely insist that it did.

"Two years shy of this country's 250th birthday," Rice University historian Douglas Brinkley said on CBS last Sunday, "12 New York jurors have convicted former president Donald Trump on 34 counts of falsifying business records in an attempt to influence the outcome of the 2016 presidential election." The dates of those records—11 invoices, 11 checks, and 12 ledger entries—ranged from February 14, 2017, to December 5, 2017. All of them were created after Trump was elected. You might expect that a historian would pay attention to chronological consistency.

You might expect the same from editorialists at major newspapers. Yet according to a May 30 Washington Post editorial, the jury found Trump "guilty of felony falsification of business records in order to influence the 2016 election." A New York Times editorial published the same day likewise claimed the jury found Trump "guilty of falsifying business records to prevent voters from learning about a sexual encounter that he believed would have been politically damaging." Barring time travel, of course, nothing Trump did in 2017 could have "influence[d] the 2016 election" or "prevent[ed] voters from learning about" that "sexual encounter" before they cast their ballots.

The same temporal difficulty is apparent in news coverage of Trump's trial. "Prosecutors will attempt to make the case that Trump falsified business records to tip the 2016 race," Al Jazeera said in April. "Trump faces 34 felony counts alleging that he falsified New York business records in order to conceal damaging information to influence the 2016 presidential election," NPR reported a week later.

Judging from some accounts of the trial's outcome, prosecutors succeeded in proving that the 2017 records reached back in time to influence the 2016 election. "Former President Donald Trump has been found guilty of 34 counts of falsifying business records to influence the outcome of the 2016 presidential election," NPR reported. The subhead of a Times story published the day after the verdict said, "The former president was convicted of 34 felony counts of falsifying business records to cover up a sex scandal that threatened to derail his 2016 campaign." The Associated Press reported that the jury found Trump "guilty of all 34 charges in a scheme to illegally influence the 2016 election through a hush money payment to a porn actor who said the two had sex."

These confounding characterizations reflect the bait and switch at the heart of the case against Trump. "We allege falsification of business records to the end of keeping information away from the electorate," Manhattan District Attorney Alvin Bragg said in January. "It's an election interference case." In his opening statement, lead prosecutor Matthew Colangelo claimed the case was about "election fraud, pure and simple."

There was nothing "pure and simple" about the case, which did not involve "election fraud" at all. Although the prosecutors repeatedly insinuated that there was something inherently criminal about trying to hide potentially damaging information from voters, that is not true. And although they averred that Cohen's payment to Daniels amounted to an illegal campaign contribution under the Federal Election Campaign Act (FECA), that interpretation of the statute is controversial. In any case, fronting the hush money did not constitute "election fraud," which is usually understood to mean interfering with the casting, counting, or reporting of votes.

Trump was not charged with violating FECA by soliciting Cohen's "contribution." The Justice Department declined to bring that case, probably because it would have been hard to prove that Trump "knowingly and willfully" violated the statute, given the fuzziness of the distinction between personal and campaign expenditures. Even if the deadline for prosecuting Trump under FECA had not passed, Bragg would have no authority to enforce that statute. So instead he resorted to an elaborate workaround that relied on various possible combinations of interacting statutes and questionable assumptions about Trump's knowledge and intent.

The FECA claim was just one of three dueling theories for treating Trump's alleged falsification of business records as a felony rather than a misdemeanor. The other two theories did not hinge on the assumption that the Daniels payment was illegal. And since the jurors were told they did not have to settle on any particular theory, it is not clear which one they found most compelling. Even if they split three ways on that crucial point, they were still allowed to reach a guilty verdict.

All of this is pretty confusing, so it is not surprising that many people have inaccurately described the meaning of the verdict, especially since Bragg and his underlings repeatedly misrepresented the nature of the case. But it is surprising that so many people who should know better have described the verdict in a way that could not possibly be true.

*CORRECTION: This post has been revised to clarify that Tribe was quoting Elias.

The post Laurence Tribe Bizarrely Claims Trump Won the 2016 Election by Falsifying Business Records in 2017 appeared first on Reason.com.

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

Last January, Manhattan District Attorney Alvin Bragg summed up his case against Donald Trump this way: "We allege falsification of business records to the end of keeping information away from the electorate. It's an election interference case."

That gloss made no sense, because the records at the center of the case—11 invoices, 11 checks, and 12 ledger entries that allegedly were aimed at disguising a hush-money reimbursement as payment for legal services—were produced after the 2016 presidential election. At that point, Michael Cohen, Trump's lawyer, had already paid porn star Stormy Daniels $130,000 to keep her from talking about her alleged 2006 sexual encounter with Trump, and Trump had already been elected. The prosecution's case against Trump, which a jury found persuasive enough to convict him on all 34 counts yesterday, was peppered with temporal puzzles like this one.

A New York Times editorial concedes that "many experts" have "expressed skepticism about the significance of this case and its legal underpinnings, which employed an unusual legal theory to seek a felony charge for what is more commonly a misdemeanor." Yet the Times also claims the jury found Trump "guilty of falsifying business records to prevent voters from learning about a sexual encounter that he believed would have been politically damaging." How did records created in 2017 "prevent voters from learning" about the Daniels tryst before they cast their ballots the previous year?

The editorial's characterization of Cohen's payment to Daniels is confounding for a similar reason. "A payoff like this is not illegal by itself," the Times concedes. "What makes it illegal is doctoring business records to mask its true purpose, which prosecutors said was to hide the story from the American people to help Mr. Trump get elected." Again, the "doctoring" of business records happened in 2017. Contrary to what the Times claims, it did not retroactively make the Daniels payment "illegal."

The Times also says the verdict "establishes that Mr. Trump committed crimes in hiding pertinent information about himself from the American people for the purpose of influencing the 2016 presidential election." The verdict does not establish that. Trump was not charged with breaking the law by instructing Cohen to pay off Daniels. And while the contentious characterization of that payment as an illegal campaign contribution figured in one theory for treating the falsification charges as felonies rather than misdemeanors, the other two theories did not hinge on the assumption that the payoff was illegal.

Since the jurors were instructed that they did not need to settle on any particular theory, it is not clear that they unanimously accepted the idea that Trump "committed crimes in hiding pertinent information about himself from the American people for the purpose of influencing the 2016 presidential election." That description, however, is consistent with the prosecution's dubious "election fraud" narrative, which falsely implied that "hiding pertinent information about himself" was inherently criminal.

Although it seems clear that the jury accepted that narrative, even the prosecutors sometimes forgot what they claimed the case was about. They argued that Trump violated an obscure, rarely invoked state law by conspiring with Cohen to influence the presidential election "by unlawful means." They further argued that Trump caused the falsification of business records with the intent of aiding or concealing that crime, which is the element that transformed the charges into felonies. But some versions of that theory were logically impossible.

According to one theory of "unlawful means," Trump facilitated a violation of New York tax law by allowing Cohen to falsely report his reimbursement as income. But since Cohen filed those allegedly fraudulent tax returns in 2018, after Trump had been president for more than a year, his misrepresentation could not possibly have helped Trump win the election.

Under another theory, Trump falsified business records to conceal the falsification of other business records, including the 1099-MISC forms in which the Trump Organization inaccurately described Cohen's reimbursement as income. Since the 1099 forms were issued after the election, it is hard to see how they could have been aimed at ensuring Trump's victory.

These logical difficulties were just one of several reasons to question the prosecution's case, which relied on convoluted theories involving interacting statutes and questionable assumptions about Trump's knowledge and intent. But instead of zeroing in on those weaknesses, Trump's lawyers, presumably at his behest, were determined to deny everything, starting with Daniels' story about sex with Trump at a Lake Tahoe hotel during a celebrity golf tournament in July 2006.

That strategy invited embarrassingly detailed testimony by Daniels, who described a presumptuous Trump abruptly disrobing while she was in the bathroom before engaging in a "brief," condomless sexual encounter "in the missionary position." Contrary to her previous accounts, Daniels implied that the sex was less than fully consensual, citing "an imbalance of power," noting the presence of a bodyguard at the door to Trump's hotel suite, saying Trump's failure to use a condom worried her, and describing her own mental state as hazy, although she added that she was not drunk and had not been drugged.

None of this was legally relevant. When it came to the questions of whether Trump had caused the falsification of business records and his intent in doing so, it did not matter exactly what happened in that hotel suite. Even if Daniels had made the whole thing up, Trump still would have been keen to keep her quiet, whether for personal reasons, business reasons, political reasons, or some combination of the three.

The defense team also insisted that Trump really thought he was paying Cohen for legal work, even though Trump had publicly admitted that he reimbursed Cohen for the Daniels payment. And Trump's lawyers disputed that he "knew about this payment" at the time, even though it defies belief to suppose that Cohen, who was eager to please Trump and conferred with him frequently, would have hatched this scheme on his own, or that he would have fronted $130,000 of his own money without the promise of reimbursement.

Whether Trump approved the misleading records related to Cohen's reimbursement, as Cohen claimed, is less clear. Trump's lawyers hammered at Cohen's credibility on that point, saying jurors should not trust a convicted felon, disbarred lawyer, and admitted liar with a powerful grudge against his former boss. But because they were also implausibly claiming that Cohen lied when he said Trump approved the Daniels payoff, the jurors may have discounted any doubts about the veracity of Cohen's account.

If Trump had been willing to concede some of the prosecution's allegations, his lawyers could have focused on the shaky legal argument for charging him with felonies. They not only failed to do that in a cogent way; they insisted on jury instructions that ruled out convicting Trump of misdemeanors rather than felonies.

"Instead of telling a simple story, Mr. Trump's defense was a haphazard cacophony of denials and personal attacks," defense attorney and former federal prosecutor Renato Mariotti observes. "That may work for a Trump rally or a segment on Fox News, but it doesn't work in a courtroom. Perhaps Mr. Trump's team was also pursuing a political or press strategy, but it certainly wasn't a good legal strategy. The powerful defense available to Mr. Trump's attorneys was lost amid all the clutter."

The post The Prosecution's Story About Trump Featured Several Logically Impossible Claims appeared first on Reason.com.

After deliberating for a little more than a day, a Manhattan jury on Thursday found Donald Trump guilty of falsifying 34 business records to aid or conceal "another crime," an intent that turns what would otherwise be misdemeanors into felonies. If you assumed that the jury's conclusions would be driven by political animus, this first-ever criminal conviction of a former president is the result you probably expected in a jurisdiction where Democrats outnumber Republicans by 9 to 1. But in legal terms, the quick verdict is hard to fathom.

That's not because there were so many counts to consider, each related to a specific invoice, check, or ledger entry allegedly aimed at disguising a hush-money reimbursement as payment for legal services. Once jurors accepted the prosecution's theory of the case, it was pretty much inevitable that they would find Trump guilty on all 34 counts. But that theory was complicated, confusing, and in some versions highly implausible, if not nonsensical. Given the puzzles posed by the charges, you would expect conscientious jurors to spend more than an afternoon, a morning, and part of another afternoon teasing them out.

Manhattan District Attorney Alvin Bragg's case against Trump stemmed from the $130,000 that Michael Cohen, then Trump's lawyer and fixer, paid porn star Stormy Daniels shortly before the 2016 presidential election to keep her from talking about her alleged 2006 sexual encounter with Trump. When Trump reimbursed Cohen in 2017, prosecutors said, he tried to cover up the arrangement with Daniels by pretending that he was paying Cohen, whom he had designated as his personal attorney, for legal work.

Cohen testified that Trump instructed him to pay off Daniels and approved the plan to mischaracterize the reimbursement. Cohen was the only witness who directly confirmed those two points, and the defense team argued that jurors should not trust a convicted felon, disbarred lawyer, and admitted liar with a powerful grudge against his former boss. But even without Cohen's testimony, there was strong circumstantial evidence that Trump approved the payoff and went along with the reimbursement scheme.

The real problem for the prosecution was proving that Trump falsified business records  with "an intent to commit another crime or to aid or conceal the commission thereof"—the element that was necessary to treat the misleading documents as felonies. Prosecutors said the other crime was a violation of Section 17-152, an obscure, little-used provision of the New York Election Law. Section 17-152 makes it a misdemeanor for "two or more persons" to "conspire to promote or prevent the election of any person to a public office by unlawful means." But prosecutors never settled on any particular explanation of "unlawful means," and Juan Merchan, the judge presiding over the trial, told the jurors they could find Trump guilty even if they could not agree on one.

According to one theory, Cohen made an excessive campaign contribution, thereby violating the Federal Election Campaign Act (FECA), when he fronted the money to pay Daniels. Cohen pleaded guilty to that offense in 2018 as part of an agreement that also resolved several other, unrelated federal charges against him. Cohen therefore had a strong incentive to accept the characterization of the Daniels payment as an illegal campaign contribution. While jurors heard about Cohen's guilty plea during the trial, CNN notes, Merchan instructed them that they should consider it only "to assess Cohen's credibility and give context to the events that followed, but not in determining the defendant's guilt."

It is unclear whether Trump violated FECA by soliciting Cohen's "contribution," a question that hinges on the fuzzy distinction between personal and campaign expenditures. Given the uncertainty on that point, it is plausible that Trump did not think the Daniels payment was illegal, which helps explain why he was never prosecuted under FECA: To obtain a conviction, federal prosecutors would have had to prove that he "knowingly and willfully" violated the statute.

The New York prosecutors said Cohen and Trump conspired to promote his election through "unlawful means." Under New York law, a criminal conspiracy requires "a specific intent to commit a crime." Trump's understanding of FECA was relevant in assessing whether he had such an intent, meaning he recognized the nondisclosure agreement with Daniels as "unlawful means." Trump's understanding of FECA therefore also was relevant in assessing whether he falsified business records with the intent of covering up "another crime."

That theory assumed three things: 1) that Trump recognized the Daniels payment as a FECA violation; 2) that he knew about Section 17-152, a moribund, rarely invoked law; and 3) that he anticipated how New York prosecutors might construe Section 17-152 in light of FECA. The first assumption is questionable, the second is unlikely, and the third is highly implausible. Yet you would have to believe all three things to conclude that Trump approved a plan to misrepresent his reimbursement of Cohen as payment for legal services with the intent of covering up a FECA-dependent violation of Section 17-152.

According to a second theory, Trump facilitated a violation of New York tax law by allowing Cohen to falsely report his reimbursement as income. Although that violation is described as "criminal tax fraud," Merchan said it did not matter that Cohen's alleged misrepresentation resulted in a higher tax bill. The judge noted that it is illegal to submit "materially false or fraudulent information in connection with any return," regardless of whether that information benefits the taxpayer.

Putting aside that counterintuitive definition of tax fraud, this theory required believing that Trump, when he reimbursed Cohen, not only contemplated what would happen when Cohen filed his returns the following year but also thought that "unlawful means" somehow would influence an election that had already happened. The logic here was hard to follow.

Likewise with the third theory of "unlawful means." Prosecutors suggested that Trump's falsification of business records was designed to aid or conceal the falsification of other business records. CNN reported that the latter records could involve, among other things, the corporate bank account that Cohen created to pay Daniels, Cohen's transfer of the money to Daniels' lawyer, or the Trump Organization's 1099-MISC forms for the payments to Cohen.

Since the 1099 forms were issued after the election, it is hard to see how they could have been aimed at ensuring Trump's victory. And although the other records predated the election, this theory involves a weird sort of bootstrapping.

Prosecutors said the records related to Cohen's dummy corporation, for example, were falsified because they misrepresented the nature and purpose of that entity, which by itself is a misdemeanor. That misdemeanor was the "unlawful means" by which Trump allegedly sought to promote his election, another misdemeanor. And because Trump allegedly tried to conceal the latter misdemeanor by falsifying the records related to Cohen's reimbursement, those records are 34 felonies instead of 34 misdemeanors.

The theory that Trump falsified business records to conceal the falsification of business records was "so circular as to produce vertigo in the jury room," George Washington University law professor Jonathan Turley said. If so, the jurors seem to have quickly recovered from their queasiness. They accepted either this dubious theory, one of the others, or possibly some combination of them. Since unanimity was not required, it is possible that some jurors bought the FECA theory, some preferred the double falsification theory, and some concluded that the case was clinched by a tax fraud with no pecuniary benefit.

To disguise the difficulties with its dueling theories, the prosecution averred that Trump committed "election fraud" when he directed Cohen to pay Daniels for her silence, thereby concealing information that voters might have deemed relevant in choosing between him and Hillary Clinton. "This was a planned, coordinated, long-running conspiracy to influence the 2016 election, to help Donald Trump get elected through illegal expenditures, to silence people who had something bad to say about his behavior," lead prosecutor Matthew Colangelo told the jury in his opening statement. "It was election fraud, pure and simple."

During his summation, prosecutor Joshua Steinglass called the nondisclosure agreement with Daniels "a subversion of democracy." He said it was an "effort to hoodwink the American voter." He told "a sweeping story about a fraud on the American people," as The New York Times put it. "He argue[d] that the American people in 2016 had the right to determine whether they cared that Trump had slept with a porn star or not, and that the conspiracy prevented them from doing so."

Did the American people have such a right? If so, Trump would have violated it even he had merely asked Daniels to keep quiet, perhaps by appealing to her sympathy for his wife. If Daniels had agreed, the result would have been the same. As the prosecution told it, that still would amount to "election fraud," even though there is clearly nothing illegal about it.

The jurors evidently bought this cover story. During deliberations, they revisited the testimony of former National Enquirer publisher David Pecker, a Trump buddy whom prosecutors implicated in that "long-running conspiracy to influence the 2016 election." Pecker's arrangement with Trump, which he described as mutually beneficial, was not the basis for any of the charges against Trump. But his testimony reinforced Bragg's legally dubious claim that Trump engaged in "election interference" when he sought to avoid bad press.

Pecker said he agreed to help Trump in several ways. He would run positive stories about Trump and negative stories about his opponents. He also would keep an eye out for potentially damaging stories about Trump and alert Cohen to them. The latter promise resulted in two agreements that the Enquirer negotiated with Dino Sajudin, a former Trump Tower doorman who falsely claimed that Trump had fathered a child with a woman hired to clean the building, and former Playboy Playmate Karen McDougal, who described a year-long affair with Trump. After paying $30,000 to Sajudin and $150,000 to McDougal for exclusive rights to their stories, the Enquirer sat on them.

Again, Trump was not charged in connection with any of this, and much of what Pecker did was constitutionally protected, albeit journalistically unethical. The fact that the jury nevertheless wanted to be read excerpts from Pecker's testimony suggests they accepted the prosecution's commodious understanding of "election fraud," which did not necessarily require any actual lawbreaking, let alone any attempt to interfere with the casting, counting, or reporting of votes.

In short, there was a glaring mismatch between the charges against Trump and what prosecutors described as the essence of his crime, which is not a crime at all. Since they could not charge him with "election fraud" merely because he tried to hide embarrassing information, they instead built a convoluted case that relied on interacting statutes and questionable assumptions about Trump's knowledge and intent.

That approach suggests several possible grounds for appeal. It is not clear, for example, whether a violation of federal campaign finance regulations, even when filtered through Section 17-152, counts as "another crime" under the state law dealing with falsification of business records. Nor is it clear that Section 17-152 applies in the context of a federal election, where federal law generally pre-empts state law. There are also questions about what is required to prove that Trump had "an intent to defraud" when he signed the checks to Cohen.

Bragg's predecessor, Cyrus R. Vance Jr., after lengthy consideration of possible state charges based on the Daniels payment, decided they were too legally iffy to pursue. Mark Pomerantz, a former prosecutor in Vance's office who worked on the Trump investigation, concluded that "such a case was too risky under New York law." In a 2023 book, Pomerantz noted that "no appellate court in New York had ever upheld (or rejected) this interpretation of the law."

Last week, New York Times columnist David French worried about the consequences of a conviction that is overturned on appeal. "Imagine a scenario in which Trump is convicted at the trial, Biden condemns him as a felon and the Biden campaign runs ads mocking him as a convict," he wrote. "If Biden wins a narrow victory but then an appeals court tosses out the conviction, this case could well undermine faith in our democracy and the rule of law." In his desperation to prevent Trump from reoccupying the White House, Bragg has already accomplished that.

The post Trump's Conviction Suggests Jurors Bought the Prosecution's Dubious 'Election Fraud' Narrative appeared first on Reason.com.

To convert a single hush payment into 34 state felonies in the New York case against former President Donald Trump, prosecutors are relying on several interacting statutes, which makes their legal theory convoluted and confusing. Juan Merchan, the judge presiding over Trump's trial, added to the confusion on Wednesday when he instructed the jurors on the conclusions they must reach to find Trump guilty.

Shortly before the 2016 election, Michael Cohen, then a lawyer working for Trump, paid porn star Stormy Daniels $130,000 to keep her from talking about her alleged 2006 sexual encounter with Trump. When Trump reimbursed Cohen in 2017, prosecutors say, he caused the falsification of 34 business records—11 invoices, 11 checks, and 12 ledger entries—that were aimed at disguising the reimbursement as payment for legal services.

Ordinarily, falsification of business records, which requires "an intent to defraud," is a misdemeanor. But it becomes a felony when the defendant's "intent to defraud" includes "an intent to commit another crime or to aid or conceal the commission thereof." The prosecution's theory of "another crime" relies on Section 17-152 of the New York Election Law—a statute so obscure that experts said they had never seen another criminal case based on it. That provision makes it a misdemeanor for "two or more persons" to "conspire to promote or prevent the election of any person to a public office by unlawful means."

Merchan laid out three possible candidates for "unlawful means" to which prosecutors have alluded. One is debatable, while the other two make little or no sense in the context of Section 17-152. Merchan said the jurors need not settle on any particular theory of "unlawful means," provided they agree that Trump was trying to aid or conceal a violation of Section 17-152.

By fronting the hush money, prosecutors say, Cohen made an excessive campaign contribution, thereby violating the Federal Election Campaign Act (FECA). Cohen pleaded guilty to that offense in 2018 as part of an agreement that also resolved several other, unrelated federal charges against him. While jurors heard about that guilty plea during the trial, CNN notes, Merchan instructed them that they should consider it only "to assess Cohen's credibility and give context to the events that followed, but not in determining the defendant's guilt."

It is unclear whether Trump violated FECA by soliciting Cohen's "contribution," a question that hinges on the fuzzy distinction between personal and campaign expenditures. Given the uncertainty on that point, it is plausible that Trump did not think the Daniels payment was illegal, which helps explain why he was never prosecuted under FECA: To obtain a conviction, federal prosecutors would have had to prove that he "knowingly and willfully" violated the statute.

The New York prosecutors say Cohen and Trump conspired to promote his election through "unlawful means." Under New York law, a criminal conspiracy requires "a specific intent to commit a crime." Trump's understanding of FECA is relevant in assessing whether he had such an intent, meaning he recognized the nondisclosure agreement with Daniels as "unlawful means." Trump's understanding of FECA therefore also is relevant in assessing whether he falsified business records with the intent of concealing "another crime."

This theory assumes three things: 1) that Trump recognized the Daniels payment as a FECA violation; 2) that he knew about Section 17-152, a moribund, rarely invoked law; and 3) that he anticipated how New York prosecutors might construe Section 17-152 in light of FECA. The first assumption is questionable, the second is unlikely, and the third is highly implausible. Yet you would have to believe all three things to conclude that Trump approved a plan to misrepresent his reimbursement of Cohen as payment for legal services with the intent of covering up a FECA-dependent violation of Section 17-152.

The other two theories that Merchan mentioned seem even less promising.

According to one theory, Trump was facilitating a violation of New York tax law by allowing Cohen to falsely report his reimbursement as income. Although that violation is described as "criminal tax fraud," Merchan said it does not matter that Cohen's alleged misrepresentation resulted in a higher tax bill. The judge noted that it is illegal to submit "materially false or fraudulent information in connection with any return," regardless of whether that information benefits the taxpayer.

Putting aside that counterintuitive definition of tax fraud, this theory requires believing that Trump, when he reimbursed Cohen, not only contemplated what would happen when Cohen filed his returns the following year but also thought that "unlawful means" somehow would influence an election that had already happened. The logic here is hard to follow.

Likewise with the third theory of "unlawful means." Prosecutors say Trump's falsification of business records was designed to aid or conceal the falsification of other business records. CNN reports that the latter records could involve, among other things, the corporate bank account that Cohen created to pay Daniels, Cohen's transfer of the money to Daniels' lawyer, or the Trump Organization's 1099-MISC forms for the payments to Cohen.

Since the 1099 forms were issued after the election, it is hard to see how they could have been aimed at ensuring Trump's victory. And although the other records predated the election, this theory involves a weird sort of bootstrapping.

Prosecutors say the records related to Cohen's dummy corporation, for example, were falsified because they misrepresented the nature and purpose of that entity, which by itself is a misdemeanor. That misdemeanor was the "unlawful means" by which Trump allegedly sought to promote his election, another misdemeanor. And because Trump allegedly tried to conceal the latter misdemeanor by falsifying the records related to Cohen's reimbursement, those records are 34 felonies instead of 34 misdemeanors.

"One of the three crimes is so circular as to produce vertigo in the jury room," George Washington University law professor Jonathan Turley observes. "The prosecutors zapped a dead misdemeanor back into life by claiming a violation under New York's election law 17-152. The argument is that the crime was committed to further another crime as an unlawful means to influence the election. However, that other crime can be the falsification of business records. So the jury (or some jurors, at least) could find that some documents were falsified as an unlawful means of falsifying other documents."

Because Merchan said jurors need not agree on which of these theories has been proven beyond a reasonable doubt, the rationale for convicting him is apt to be muddled. "The judge has ruled that the jury does not have to agree on what actually occurred in the case," Turley says. "Merchan ruled that the government had vaguely referenced three possible crimes that constitute the 'unlawful means' used to influence the election: a federal election violation, the falsification of business records, and a tax violation. The jurors were told that they could split on what occurred, with four jurors accepting each of the three possible crimes in a 4-4-4 split. The court would still consider that a unanimous verdict so long as they agree that it was in furtherance of some crime."

Merchan's instructions did include a caveat that could help Trump. "He said mere knowledge of a conspiracy does not make [the] defendant a co-conspirator," Fox News correspondent Lydia Hu notes. "Prosecutors must prove intent. Also, being present with others when they form a conspiracy does not mean that the defendant is a part of the conspiracy."

On its face, Cohen's testimony regarding Trump's participation in the alleged conspiracy seems crucial in establishing his intent. Cohen said Trump instructed him to pay Daniels. He also said Trump Organization Allen Weisselberg described the plan to reimburse Cohen during a January 2021 meeting, and Trump did not object. Cohen was the only witness who directly testified on those points, and Trump's lawyers argued that he cannot be trusted, noting that he is a convicted felon, disbarred lawyer, and admitted liar with a powerful grudge against his former boss.

Merchan said "the jury cannot convict Trump on the testimony of Michael Cohen alone because he is an accomplice, but they can use it if they corroborate it with other evidence," CNN notes. "Even if you find the testimony of Michael Cohen to be believable," Merchan said, "you may not convict the defendant solely upon that testimony unless you also find it's corroborated by other evidence." The other evidence is circumstantial. It includes testimony suggesting that Trump was worried about the impact that Daniels' story would have on the election, that he conferred regularly with Cohen, and that he was a proud penny-pincher who never would have paid Cohen without knowing exactly what it was for.

That evidence supports the inference that Trump knew he was reimbursing Cohen for the Daniels payment (which he has publicly admitted). It also supports the idea that Trump recognized that payment as a campaign expenditure and therefore an illegal contribution. But it does not prove that second claim beyond a reasonable doubt, which helps explain why the prosecution offered jurors two other possible theories of "unlawful means." If they are squeamish about the FECA theory, they can instead rely on the tax theory, despite its temporal difficulties, or they can accept the idea that Trump fabricated business records to conceal the fabrication of business records, even though that proposition makes the mind reel.

Since the jurors do not have to agree on the nature of Trump's "unlawful means," Merchan's instructions invite them to convict him based on a hodgepodge of three dubious theories. But if each of these theories is faulty, mixing them together cannot compensate for their weaknesses.

The post Trump Jury Instructions Invite Conviction Based on a Hodgepodge of Dubious Theories appeared first on Reason.com.

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

Juan Merchan, the judge presiding over Donald Trump's criminal trial in Manhattan, yesterday denied a second defense motion for a mistrial. Trump's lead attorney, Todd Blanche, has objected to aspects of porn star Stormy Daniels' testimony about her purported 2006 sexual encounter with Trump, saying some of the details were legally irrelevant and "so unduly and inappropriately prejudicial" that a mistrial was the only remedy. Merchan rejected that argument on Tuesday and again on Thursday, saying the problem that Blanche perceives was largely a result of the defense team's failures during Daniels' testimony and cross-examination.

Among other things, Blanche cited testimony suggesting, for the first time, that Daniels' alleged encounter with Trump was not fully consensual. This dispute illustrates the risk that the salaciousness of Daniels' account will overshadow the legal issue at the center of the case.

Trump is not charged with adultery or sexual assault. He is not charged with trying to keep Daniels from talking about what she says happened, although Manhattan District Attorney Alvin Bragg has misleadingly suggested that the essence of Trump's crime was keeping that information from voters during his 2016 presidential campaign. Trump is not even charged with instructing his personal lawyer, Michael Cohen, to pay Daniels $130,000 shortly before the election in exchange for her silence. Rather, he is charged with falsifying business records to disguise his 2017 reimbursement of Cohen as payment for legal services.

Proving those 34 charges does not require demonstrating that Daniels is telling the truth at all, let alone that every detail is accurate. Under the prosecution's theory, Trump would be guilty of falsifying business records even if Daniels made the whole thing up. And assuming that Cohen's payment to Daniels amounted to an excessive campaign contribution (a characterization that Cohen accepted when he pleaded guilty to that offense in 2018), Trump's falsification of business records would be a felony if he was trying to conceal that violation of federal campaign finance regulations.

There are several problems with that theory, including the fuzziness of the distinction between personal and campaign expenditures, the question of whether Trump recognized that the Daniels payoff fell into the latter category (assuming that it did), the uncertainty about Trump's involvement in generating the relevant business records and his motive in doing so, and the attempt to convert a 2016 federal campaign finance violation into a state felony via a moribund New York election law that apparently has never been used before. But one thing is clear: Trump's criminal liability in this case has nothing to do with exactly what happened in his Lake Tahoe hotel suite during a celebrity golf tournament in July 2006.

Jurors nevertheless heard a lot about that. For years, Daniels has said she consented to sex with Trump. But during her testimony on Tuesday, she cast doubt on that characterization, saying "I just think I blacked out," although she added that she was not "drunk" or "drugged." She also noted that "there was a bodyguard right outside the door" and said "there was an imbalance of power for sure," since Trump "was bigger and blocking the way," although she conceded that she "was not threatened verbally or physically."

When Blanche complained that Daniels had changed her story, Merchan disagreed. "I disagree with your narrative that there is any new account here," the judge said. "I disagree that there is any changing story." Yet Blanche's complaint is at least partially valid.

It's true that Daniels has mentioned the bodyguard, Keith Schiller, before. He figures prominently in the account she gave in her 2018 memoir Full Disclosure. In that book, she also mentions that Trump did not wear a condom—another detail that Blanche described as irrelevant and prejudicial.

"I was surprised he didn't even mention a condom," Daniels says in Full Disclosure. "I didn't have one with me anyway, because I wasn't meeting him for sex. If I had been, I always brought my own, because I am allergic to latex. Back then I used Avantis"—a brand of nonlatex condoms. While Daniels' testimony on that point was similar, it introduced an element of concern that is not mentioned in the book:

Prosecutor Susan Hoffinger: Was he wearing a condom?

Daniels: No.

Hoffinger: Was that concerning to you?

Daniels: Yes.

Hoffinger: Did you say anything about it?

Daniels: No.

Hoffinger: Why not?

Daniels: I didn't say anything at all.

That exchange, Blanche noted, came after Daniels' testimony that the men with whom she performed in adult films were always required to wear condoms. On Thursday, the defense described the discussion of condoms as "a dog whistle for rape." While that may be an exaggeration, Daniels' testimony that Trump's failure to use a condom worried her certainly reinforced the impression that Daniels was doing something she did not want to do.

Full Disclosure leaves a similar impression—up to a point. After a conversation in which Daniels felt that Trump was treating her respectfully and taking her seriously as a businesswoman, she says, she emerged from a bathroom where she had touched up her makeup to find Trump sitting on a bed in his underwear.

"I had the sense of a vacuum taking all of the air out of the room, and me deflating with it," Daniels writes. "I sighed inwardly, keenly aware of two thoughts in that one moment. There was the simple Oh, fuck. Here we go. But there was also a much more complex, sad feeling that none of what he said was true. He didn't respect me. Everything he said to me was bullshit."

Daniels says she "should have…let him know this wasn't okay." But she didn't. "So, here we go," she writes. "It was an out-of-body experience….I just kind of lay there. A lot of women have been there. He wasn't aggressive, and I know for damn sure I could have outrun him if I tried, but I didn't. I'm someone who doesn't stop thinking, so as he was on top of me I replayed the previous three hours to figure out how I could have avoided this."

In her book, Daniels describes brief, sad, regrettable, and unsatisfying sex, but she emphasizes that it was an experience she easily could have avoided. Although she never quite explains why she decided to go through with it, there is no suggestion that she was incapacitated. But in her testimony, she said "I blacked out," which she suggested explained why "I don't remember" exactly what happened. Blacking out is not the same as "an out-of-body experience," which involves feeling detached from your body while fully conscious.

"I was not drugged," Daniels said. "I never insinuated that I was on drugs. I was not drunk. I never said anything of that sort." In a sidebar discussion, defense attorney Susan Necheles nevertheless objected that "she is making it sound like she was drugged." Hoffinger suggested that Daniels merely meant that she was "dizzy," possibly because she was hungry for the dinner that was promised but never materialized—a point she emphasizes in her book and mentioned in her testimony.

Merchan sustained Necheles' objection. But that did not stop the jury from hearing Daniels imply that she was not fully aware of what was happening that night. Combined with Daniels' references to the bodyguard and the "imbalance of power," that description strongly suggested her consent was not only passive and unenthusiastic but the product of pressure and incapacity.

Daniels strengthened that impression by saying she could not "remember how your clothes got off." There was Trump in his underwear, she said, and "the next thing I know" she was "on the bed," naked. Hoffinger asked whether she "remember[ed] anything other than the fact that you had sex on the bed." Not really, Daniels implied: "I was staring at the ceiling. I didn't know how I got there. I made note, like I was trying to think about anything other than what was happening there." That also prompted an objection from Hoffinger, which Merchan sustained.

In Full Disclosure, by contrast, Daniels recounts the sex in considerable detail, calling Trump "a terrible kisser," quoting what he said to her, describing the position he used, recalling the size and "unusual" shape of his penis, and remarking on his crotch hair. While these are just the sort of details that the defense (and Merchan) would deem out of bounds, they contradict the idea that Daniels was just "staring at the ceiling," that she didn't know "how I got there," or that she was only dimly aware of "what was happening there."

What does all this have to do with Trump's alleged falsification of business records? "All of this has nothing to do with this case," Blanche told Merchan on Tuesday. "The only reason why the government asked those questions, aside from pure embarrassment, is to inflame this jury to not look at the evidence that matters." He noted that Daniels "has testified today about consent, about danger," which is "not the point of this case."

The prosecution argues that the details of Daniels' story matter because they rebut Trump's contention that she invented the whole episode, which in turn goes to his motivation in arranging her nondisclosure agreement and in trying to keep it a secret with phony invoices, mislabeled checks, and fraudulent ledger entries. "Her account completes the narrative of the events that precipitated the falsification of business records," Hoffinger told Merchan. "Her account is highly probative of the defendant's intent, his intent and his motive in paying this off, and making sure that the American public did not hear this before the election. It is precisely what the defendant did not want to become public."

Merchan agreed with Blanche that "there were some things that would probably have
been better left unsaid." But he said the fault for that lay partly with Trump's attorneys. "The objections, for the most part, were sustained," he said. "Where there was a motion to strike testimony, for the most part, that motion was granted as well. I will also note that I was surprised that there were not more objections at various times during the testimony….So when you say that, you know, the bell has been rung, the defense has to take some responsibility for that."

Merchan was less patient on Thursday, when the defense again moved for a mistrial. "There were many times when you could have objected but didn't," he told Necheles. She objected when Daniels testified that she "touch[ed] his skin" and when she said "we were in the missionary position," for example, but did not object during the condom exchange, which Blanche later argued was prejudicial and irrelevant. Nor did Necheles object when Daniels described the "imbalance of power" or when she noted that Trump was "definitely several inches taller and much larger" than her. And Necheles' objection to "I just think I blacked out" came late, five sentences after Daniels said it.

Merchan also "chided Mr. Trump's lawyers for missteps during their cross-examination of Ms. Daniels," The New York Times notes, "and suggested that the former president's insistence on entirely denying any sexual encounter with Ms. Daniels had opened the door for the prosecution to introduce specific—and graphic—evidence that the encounter did occur." The judge conceded that some details of Daniels' testimony were so needlessly prejudicial that he would have sustained objections to them if the defense had made them. At the same time, he said Daniels could "corroborate her account" by describing details of the encounter because a truthful story "increases the motivation to silence her."

That rationale seems like a stretch, especially since the prosecution has argued that Trump was eager to suppress negative stories even when they were not true. According to testimony that prosecutors presented to establish that pattern, Cohen arranged for the National Enquirer to pay former Trump Tower doorman Dino Sajudin $30,000 for exclusive rights to his story, which alleged that Trump had fathered a child with a woman hired to clean the building. Although the Enquirer investigated that story and determined that it was not true, prosecutors say, Trump was still keen to stop Sajudin from telling it. That suggests Trump would have wanted to silence Daniels even if her story was equally fictitious, making all the quibbling about the details of that story irrelevant.

The post The Details of Stormy Daniels' Story About Sex With Trump Are Legally Irrelevant appeared first on Reason.com.

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

President Joe Biden says, "I know how to make government work!"

You'd think he'd know. He's worked in government for 51 years.

But the truth is, no one can make government work.

Biden hasn't.

Look at the chaos at the border, our military's botched withdrawal from Afghanistan, the rising cost of living, our unsustainable record-high debt.

In my new video, economist Ed Stringham argues that no government can ever work well, because "even the best person can't implement change….The massive bureaucracy gets bigger and slower."

I learned that as a consumer reporter watching bureaucrats regulate business. Their rules usually made life worse for consumers.

Yet politicians want government to do more!

Remember the unveiling of Obamacare's website? Millions tried to sign up. The first day, only six got it to work.

Vice President Joe Biden made excuses: "Neither [Obama] and I are technology geeks."

Stringham points out, "If they can't design a basic simple website, how are they going to manage half the economy?"

While bureaucrats struggled with the Obamacare site, the private sector successfully created Uber and Lyft, platforms like iCloud, apps like Waze, smartwatches, etc.

The private sector creates things that work because it has to. If businesses don't serve customers well, they go out of business.

But government is a monopoly. It never goes out of business. With no competition, there's less pressure to improve.

Often good people join government. Some work as hard as workers in the private sector.

But not for long. Because the bureaucracy's incentives kill initiative.

If a government worker works hard, he might get a small raise. But he sits near others who earn the same pay and, thanks to archaic civil service rules, are unlikely to get fired even if they're late, lazy, or stupid.

Over time, that's demoralizing. Eventually government workers conclude, "Why try?"

In the private sector, workers must strive to make things better. If they don't, competitors will, and you might lose your job.

Governments never go out of business.

"Companies can only stay in business if they always keep their customer happy," Stringham points out. "Competition pushes us to be better. Government has no competition."

I push back.

"Politicians say, 'Voters can vote us out.'"

"With a free market," Stringham replies, "the consumer votes every single day with the dollar. Under politics, we have to wait four years."

It's another reason why, over time, government never works as well as the private sector.

Year after year, the Pentagon fails audits.

If a private company repeatedly does that, they get shut down. But government never gets shut down.

A Pentagon spokeswoman makes excuses: "We're working on improving our process. We certainly are learning each time."

They don't learn much. They still fail audits.

"It's like we're living in Groundhog Day," Stringham jokes.

When COVID-19 hit, politicians handed out almost $2 trillion in "rescue" funds. The Government Accountability Office says more than $100 billion were stolen.

"One woman bought a Bentley," laughs Stringham. "A father and son bought a luxury home."

At least Biden noticed the fraud. He announced, "We're going to make you pay back what you stole!

No. They will not. Biden's Fraud Enforcement Task Force has recovered only 1 percent of what was stolen.

Even without fraud, government makes money vanish. I've reported on my town's $2 million toilet in a park. When I confronted the parks commissioner, he said, "$2 million was a bargain! Today it would cost $3 million."

That's government work.

More recently, Biden proudly announced that government would create "500,000 [electric vehicle] charging stations."

After two years, they've built seven. Not 7,000. Just seven.

Over the same time, greedy, profit-seeking Amazon built 17,000.

"Privatize!" says Stringham. "Whenever we think something's important, question whether government should do it."

In Britain, government-owned Jaguar lost money year after year. Only when Britain sold the company to private investors did Jaguar start turning a profit selling cars people actually like.

When Sweden sold Absolut Vodka, the company increased its profits sixfold.

It's ridiculous for Biden to say, "I know how to make government work."

No one does.

Next week, this column takes on Donald Trump's promise: "We'll drain the Washington swamp!"

COPYRIGHT 2024 BY JFS PRODUCTIONS INC.

The post No One Can Make Government Work appeared first on Reason.com.

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

Scam Buster Jim Browning collaborated with an insider to record undercover video inside a pig butchering scam operating from a large complex in Dubai. Here, offices full of migrant workers impersonate glamorous models on dating apps to lure victims into fake investment opportunities. — Read the rest

The post Undercover video exposes massive "Pig Butchering" romance scam center in Dubai appeared first on Boing Boing.

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

Fraudster George Santos is suing Jimmy Kimmel and the Walt Disney Company for fraud, demanding $750,000 in damages. The disgraced ex-Congressman is upset that Kimmel ordered Cameo videos from Santos using ridiculous scripts that Santos fell for and broadcast them on TV. — Read the rest

The post "I am currently embroiled in what may be the most preposterous lawsuit of all time" — Jimmy Kimmel teases George Santos for suing him (video) appeared first on Boing Boing.

Killer quote:

You can’t make the average person buy a course. But you can ruin the life of the ones who do.

How to Sell a Course (Shady Millionaire Edition)

Previously at Mike Cane’s xBlog:

Addiction Runs The World

Previously here:

Human Variables category

As Donald Trump tells it, all of the civil and criminal cases against him are part of a Democratic conspiracy to keep him from returning to the White House. Although some of the many charges against him involve credible allegations of serious crimes, they have been overshadowed recently by two New York cases that are much weaker.

In 2016, Manhattan District Attorney Alvin Bragg says, Trump "corrupt[ed] a presidential election" by concealing embarrassing information from voters. And according to New York Attorney General Letitia James, whose lawsuit resulted in a staggering "disgorgement" order against Trump last week, he defrauded lenders and insurers by habitually inflating the value of his assets.

Bragg and James, both Democrats, argue that Trump was dishonest, which will not come as news to anyone who has been paying attention to the persistent gap between reality and his public statements on matters large and small. But neither Bragg nor James has been able to explain exactly who was victimized by the misrepresentations they cite.

Bragg's criminal case, which is now scheduled for trial on March 25, charges Trump with 34 counts of falsifying business records. Each of those is based on an invoice, check, or ledger entry that allegedly was designed to disguise Trump's reimbursement of a $130,000 payment that Michael Cohen, his former lawyer, gave porn star Stormy Daniels shortly before the 2016 election to keep her from talking about her alleged affair with Trump.

Falsifying business records—in this case, mischaracterizing the payments to Cohen as compensation for legal services—is ordinarily a misdemeanor. But Bragg is charging Trump with 34 felonies, each punishable by up to four years in prison, because he allegedly was trying to cover up "another crime."

Bragg says the "criminal activity" that Trump sought to "conceal" included "attempts to violate state and federal election laws." That claim is based on legal interpretations so iffy that Bragg's predecessor, Cyrus R. Vance Jr., rejected them after lengthy consideration.

Explaining why he nevertheless is trying to convert one hush payment into 34 felonies, Bragg complains that Trump "hid damaging information from the voting public during the 2016 presidential election." Although Bragg says that offense is "the heart of the case," it is not a crime: If Daniels had simply agreed not to talk about the alleged affair after Trump asked her nicely, the result would have been the same.

James' case likewise lacks any measurable injury to a specific victim, which is not required by the New York law she used to sue Trump. Although she presented plenty of evidence that Trump overvalued his properties and exaggerated his wealth, she did not show that lenders or insurers suffered any losses as a result.

Most notoriously, Trump claimed his apartment in Manhattan's Trump Tower was 30,000 square feet, nearly three times its actual size. He valued Mar-a-Lago, his golf resort in Palm Beach, based on the assumption that it could be sold for residential purposes, which the deed precluded.

New York County Supreme Court Justice Arthur Engoron also found that the Trump Organization had treated rent-stabilized apartments as if they were not subject to that restriction, assumed regulatory permission for construction that had not in fact been approved, failed to discount expected streams of revenue, dramatically departed from estimates by professional appraisers, and counted Trump's limited partnership interest in a real estate company as cash even though he could not access the money without the company's consent. But the sum that Engoron ordered Trump to pay, which totals nearly half a billion dollars with interest, was styled as "disgorgement" of "ill-gotten gains," not as compensation for damages.

That's because James was not able to identify any damages to lenders or insurers, which she was not legally obliged to do. As in Bragg's case, the striking absence of any injury commensurate with the punishment lends credibility to Trump's reflexive complaint that he is the victim of a partisan vendetta.

© Copyright 2024 by Creators Syndicate Inc.

The post Two New York Cases Lend Credibility to Trump's Complaint of Partisan Persecution appeared first on Reason.com.

In this week's The Reason Roundtable, Katherine Mangu-Ward is in the driver's seat, alongside Nick Gillespie and special guests Zach Weissmueller and Eric Boehm. The editors react to the latest plot twists in Donald Trump's various legal proceedings and the death of Russian opposition leader Alexei Navalny.

00:41—The trials of Donald Trump in Georgia and New York

25:04—Weekly Listener Question

33:23—Sora, a new AI video tool

43:55—The death of Alexei Navalny

49:58—This week's cultural recommendations

Mentioned in this podcast:

"How a New York Judge Arrived at a Staggering 'Disgorgement' Order Against Trump," by Jacob Sullum

"Prosecutor Fani Willis Touts the Value of Cash, but What About the Rest of Us?" by J.D. Tuccille

"Trump Ordered To Pay $364 Million for Inflating His Assets in Civil Fraud Trial," by Joe Lancaster

"Alvin Bragg Is Trying To Punish Trump for Something That Is Not a Crime," by Jacob Sullum

"Alexei Navalny's Death Is a Timely Reminder of How Much Russia Sucks," by Eric Boehm

"Why Is Nike Stomping on Independent Creators?" by Kevin P. Alexander

"Bury My Sneakers at Wounded Knee," by Nick Gillespie

"Creation Myth: Does innovation require intellectual property rights?" by Douglas Clement

"A Private Libertarian City in Honduras," by Zach Weissmueller

"The Real Reasons Africa Is Poor—and Why It Matters," by Nick Gillespie

Bono's Ukraine Speech

"Justice or persecution? The Trump dilemma"

Send your questions to [email protected]. Be sure to include your social media handle and the correct pronunciation of your name.

Today's sponsor:

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Audio production by Ian Keyser; assistant production by Hunt Beaty.

Music: "Angeline," by The Brothers Steve

• Producer: Hunt Beaty

The post Goodbye, Navalny appeared first on Reason.com.

On Friday, New York County Supreme Court Justice Arthur Engoron ordered Donald Trump to pay a staggering $355 million for repeatedly inflating asset values in statements of financial condition submitted to lenders and insurers. When the interest that Engoron also approved is considered, the total penalty rises to $450 million. All told, Trump and his co-defendants, including three of his children and former Trump Organization CFO Allen Weisselberg, are on the hook for $364 million, or about $464 million with interest.

On its face, a penalty of nearly half a billion dollars is hard to fathom given that no lender or insurer claimed it suffered a financial loss as a result of the transactions at the center of the case, which was brought by New York Attorney General Letitia James. But the law under which James sued Trump and his co-defendants does not require any such loss. The money demanded by Engoron's 92-page decision, which goes to the state rather than individual claimants, is styled not as damages but as "disgorgement" of "ill-gotten gains." It is aimed not at compensating people who were allegedly harmed by Trump's misrepresentations but at deterring dishonesty that threatens "the financial marketplace."

Proving "common law fraud," Engoron notes, requires establishing that the defendant made a "material" statement he knew to be false, that the plaintiff justifiably relied on that statement, and that he suffered damages as a result. Section 63(12) of New York's Executive Law, by contrast, authorizes the attorney general to sue "any person" who "engage[s] in repeated fraudulent or illegal acts or otherwise demonstrate persistent fraud or illegality in the carrying on, conducting or transaction of business." The attorney general can seek "an order enjoining the continuance of such business activity or of any fraudulent or illegal acts, directing restitution and damages and, in an appropriate case, cancelling" the defendant's business certificate.

"The statute casts a wide net," Engoron observes. It defines "fraud" to include "any device, scheme or artifice to defraud and any deception, misrepresentation, concealment, suppression, false pretense, false promise or unconscionable contractual provisions." Although Engoron found substantial evidence that lenders and insurers relied on the Trump Organization's misrepresentations, the state did not have to prove that they did or that they suffered damages as a result.

"Timely and total repayment of loans does not extinguish the harm that false statements inflict on the marketplace," Engoron writes. "Indeed, the common excuse that 'everybody does it' is all the more reason to strive for honesty and transparency and to be vigilant in enforcing the rules. Here, despite the false financial statements, it is undisputed that defendants have made all required payments on time; the next group of lenders to receive bogus statements might not be so lucky. New York means business in combating business fraud."

Engoron ruled that the appropriate standard of proof was a preponderance of the evidence, which typically applies in civil cases and requires showing that an allegation is more likely than not to be true. "Defendants have provided no legal authority for their contention that the higher 'clear and convincing' standard does, or should, apply," he writes. "A clear and convincing standard applies only when a case involves the denial of, addresses, or adjudicates fundamental 'personal or liberty rights' not at issue in this action."

Engoron had previously ruled that disgorgement of profits is one of the remedies allowed by Section 63(12) in this case. "In flagrant disregard of prior orders of this Court and the First Department [court of appeals], defendants repeat the untenable notion that 'disgorgement is unavailable as a matter of law' in Executive Law §63(12) actions," he wrote in that September 2023 decision, which held that Trump had committed fraud within the meaning of the statute. "This is patently false, as defendants are, or certainly should be, aware that the Appellate Division, First Department made it clear in this very case that '[w]e have already held that the failure to allege losses does not require dismissal of a claim for disgorgement under Executive Law § 63(12).'"

In Friday's decision, Engoron reviews the examples of fraud that he described in the earlier ruling. Most notoriously, they include the claim that Trump's triplex apartment in Manhattan's Trump Tower was 30,000 square feet, nearly three times its actual size. That misrepresentation was included in Trump's statements of financial condition (SFCs) from 2012 through 2016 and was not corrected until after Forbes made the glaring discrepancy public in 2017.

In 2012, former Trump International Realty employee Kevin Sneddon testified, Weisselberg asked him to assess the apartment's value. "In response to the request," Engoron writes, "Sneddon asked Weisselberg if he could see the Triplex, to which Weisselberg responded that that was 'not possible.' Sneddon then asked if Weisselberg could send him a floorplan or specs of the Triplex to evaluate, to which Weisselberg also said 'no.' Sneddon then asked Weisselberg what size the Triplex was, to which Weisselberg responded 'around 30,000 square feet.' Sneddon then used the 30,000 square foot number in ascertaining a value for the Triplex."

The value of Mar-a-Lago, Trump's golf resort in Palm Beach, also figured prominently in the case. The deed to Mar-a-Lago precluded it from ever being used as private residential property, a clause that made it eligible for a lower tax rate. Yet SFCs repeatedly valued Mar-a-Lago as if it could be sold for residential purposes. Engoron notes that Trump "insisted that he believed Mar-a-Lago is worth 'between a billion and a billion five' today, which would require not only valuing it as a private residence, which the deed prohibits, but as more than the most expensive private residence listed in the country by approximately 400%"

Other examples of misrepresentations included treating rent-stabilized apartments as if they were not subject to that restriction, assuming regulatory permission for construction that had not in fact been approved, failing to discount expected streams of revenue, dramatically departing from estimates by professional appraisers, and counting Trump's limited partnership interest in a real estate company as cash even though he could not access the money without the company's consent. More generally, expert testimony indicated, Trump tended to value properties based on rosy "as if" assumptions rather than the "as is" valuations preferred by lenders.

The defendants argued that the accountants charged with compiling the SFCs were responsibile for verifying their accuracy. But as Engoron notes, the accounting firms' role was limited to assembling information provided by the Trump Organization, which they assumed to be accurate. "There is overwhelming evidence from both interested and non-interested witnesses, corroborated by documentary evidence, that the buck for being truthful in the supporting data valuations stopped with the Trump Organization, not the accountants," he says. "Moreover, the Trump Organization intentionally engaged their accountants to perform compilations, as opposed to reviews or audits, which provided the lowest level of scrutiny and rely on the representations and information provided by the client; compilation engagements make clear that the accountants will not inquire, assess fraud risk, or test the accounting records."

Trump also argued that the SFCs were unimportant because lenders and insurers would perform their own due diligence. Engoron was unimpressed by that defense, especially with regard to the insurers. "Because the Trump Organization is a private company, not a publicly traded company," he says, "there is very little that underwriters can do to learn about the financial condition of the company other than to rely on the financial statements that the client provides to them."

Were the Trump Organizations overvaluations "material"? Engoron had already concluded that "the SFCs from 2014-2021 were false by material amounts as a matter of law." Under Section 63(12), he says, materiality "is judged not by reference to reliance by or materiality to a particular victim, but rather on whether the financial statement 'properly reflected the financial condition' of the person to which the statement pertains."

If fraud "is insignificant," Engorion concedes, "then, like most things in life, it just does not matter." But that "is not what we have here," he adds. "Whether viewed in relative (percentage) or absolute (numerical) terms, objectively (the governing standard) or subjectively (how the lenders viewed them), defendants' misstatements were material….The frauds found here leap off the page and shock the conscience."

While there is no precise numerical standard for materiality, Engoron says, "this Court confidently declares that any number that is at least 10% off could be deemed material, and any number that is at least 50% off would likely be deemed material. These numbers are probably conservative given that here, such deviations from truth represent hundreds of millions of dollars, and in the case of Mar-a-Lago, possibly a billion dollars or more."

Did those deviations ultimately matter in the decisions that lenders and insurers made? Engoron's summary provides reason to doubt that they did. Deutsche Bank, he notes, routinely "applied a 50% 'haircut' to the valuations presented by" clients, which a witness "affirmed was the standardized number for commercial real assets." A defense witness opined that lenders generally just want to see "the engagement of a warm body of a billionaire to stand behind the loan in his equity infusion and capital."

James nevertheless argued that Trump, by systematically exaggerating his wealth and the amount of cash he could access, misled lenders about what would happen in the event that the Trump Organization could not meet its obligations. And those misrepresentations, she said, allowed the business to borrow more money on terms more favorable than it otherwise could have obtained.

The difference between the interest rates that lenders charged based on Trump's personal financial guarantee and the rates they would have charged without it was crucial to Engoron's calculation of how much the defendants should disgorge. Over their vigorous objections, he accepted the numbers offered by a state witness, investment bank CEO Michiel McCarty, who compared the rate that Deutsche Bank charged the Trump Organization based on Trump's personal guarantee with the rate it proposed for a loan without that guarantee. By McCarty's calculation, the Trump Organization saved a total of about $168 million in interest on loans for four projects.

By itself, that estimate accounts for nearly half of the disgorgement that Engoron ordered. He also included nearly $127 million in "net profits" from the 2022 sale of the Old Post Office in Washington, D.C., which Trump had converted into a hotel. That deal, James argued, was facilitated "through the use of false SFCs," without which it would not have happened. She also argued that "without the ill-gotten savings on interest rates, defendants would not even have been able to invest in the Old Post Office and/or other projects."

Taking into account the partnership interest "fraudulently labeled as cash," James said, "Trump would have been in a negative cash situation" by 2017 but for the $74 million or so "saved through reduced interest payments." She noted that "the Old Post office loan itself was a construction loan, and its proceeds were necessary to the construction and renovation of the hotel, which enabled the 2022 sale and resulting profits."

Engoron found these arguments, especially the first, persuasive. The profits from the sale of the Old Post Office, he concludes, "were ill gotten gains, subject to disgorgement, which is meant to deny defendants 'the ability to profit from ill-gotten gain.'"

Engoron also counted $60 million in profits from the 2023 sale of a license to operate a golf course at Ferry Point Park in the Bronx, which Trump had obtained from the New York City Department of Parks & Recreation in 2012. "By maintaining the license agreement for Ferry Point, based on fraudulent financials," Engoron says, "Donald Trump was able to secure a windfall profit by selling the license to Bally's Corporation."

Although reliance is not required to prove fraud under Section 63(12), it does implicitly figure in these disgorgement calculations. But for the "fraudulent financials," Engoron assumes, Trump would have had to pay higher interest rates on the four loans, and neither the Ferry Point deal nor the Old Post Office renovation and sale would have happened. The defendants, of course, dispute those counterfactuals.

Explaining the need for continued independent supervision of the Trump Organization, Engoron emphasizes Trump et al.'s "refusal to admit error." After "some four years of investigation and litigation," he says, "the only error (inadvertent, of course) that they acknowledge is the tripling of the size of the Trump Tower Penthouse, which cannot be gainsaid. Their complete lack of contrition and remorse borders on pathological. They are accused only of inflating asset values to make more money. The documents prove this over and over again. This is a venial sin, not a mortal sin. Defendants did not commit murder or arson. They did not rob a bank at gunpoint. Donald Trump is not Bernard Madoff. Yet, defendants are incapable of admitting the error of their ways. Instead, they adopt a 'See no evil, hear no evil, speak no evil' posture that the evidence belies."

Engoron "intends to protect the integrity of the financial marketplace and, thus, the public as a whole," he writes. "Defendants' refusal to admit error—indeed, to continue it, according to the Independent Monitor—constrains this Court to conclude that they will engage in it going forward unless judicially restrained. Indeed, Donald Trump testified that, even today, he does not believe the Trump Organization needed to make any changes based on the facts that came out during this trial."

Although Engoron says his court "is not constituted to judge morality," his outrage at Trump's financial dishonesty is palpable. That dishonesty, which is consistent with the ego-boosting lies that Trump routinely tells about matters small (e.g., the size of the crowd at his inauguration) and large (e.g., a presidential election he still insists was "rigged" by systematic fraud), is indeed striking. In this case, however, it did not result in any injuries that Trump's lenders or insurers could identify. Under New York law, Engoron says, that does not matter. But maybe it should.

The post How a New York Judge Arrived at a Staggering 'Disgorgement' Order Against Trump appeared first on Reason.com.

Former Rep. George Santos, kicked out of Congress last year for being an irredeemable liar, has spent his time since expulsion pulling in the big bucks making videos on Cameo for anywhere between $350 and $500 a pop.

Last year, Senator John Fetterman made news when he got Santos to record a Cameo video trolling disgraced, indicted colleague Senator Bob Menendez who refuses to resign. That video had Santos urging “Bobby” to “hang in there.” Earlier this month, Santos admitted that he’d surpassed 1,200 videos in the last few months, bringing in a few hundred thousand dollars.

Apparently, a little over a dozen of those came from talk show host Jimmy Kimmel, who started a segment in December called “Will Santos Say It.” Kimmel submitted wacky Cameo requests and played some on the show. Back in December, Santos complained about this — mainly that he wasn’t getting paid enough for the videos.

Over the weekend, Santos actually sued Kimmel, along with ABC/Disney, claiming copyright infringement. Because, I’m sure, Disney doesn’t employ any copyright lawyers who will eat Santos and his lawyer for lunch and spit out the remains into bowls made out of Mickey Mouse.

The lawsuit is not good. The crux is that Kimmel (1) misrepresented himself and (2) purchased videos under a “personal” license instead of a “commercial” one, and therefore this is both fraud and copyright infringement.

It is likely neither.

On the copyright side, Kimmel has a strong fair use claim. He used them for commentary and criticism without harming the market for Santos’ Cameos (in fact, they likely increased it). The fraud part is just nonsense. Santos didn’t lose money out of this, he made money.

The lawsuit undermines its copyright claims by inserting Kimmel’s commentary, which helps to show how this is fair use (and amusing):

KIMMEL: Yeah so now this Cameo thing, according to George, is really paying off. He claims he’s made more money in seven days than he did in Congress for a year. And part of that money came from me. I sent him a bunch of crazy video requests because I wanted to see what he would read and what he wouldn’t read, and I showed some of them on the air on Thursday, um, and now he’s demanding […] to be paid a commercial rate. Could you imagine if I get sued by George Santos for a fraud? I mean how good would that be? It would be like a dream come true. So since I started buying his videos his rates went way up to $500 a piece. He should be thanking me for buying these videos. But I have a big stockpile you want to see one? Again George had no idea these requests were from me, I just wrote them and sent them in. So “Will Santos say it?” Here we go […] [CAMEOS #4 and #5 were then published]

The lawsuit also includes the five prompts that Kimmel (under made-up names) submitted to Santos that were later aired. Kimmel says he submitted more, and it’s unclear what happened with the others, if Santos’ legal threat made them go away or if he even made them.

Still, for your enjoyment, here are the prompts:

a. On or about December 6, 2023, at approximately 4:46 p.m. Kimmel, misrepresenting himself as “Chris Cates” made the following fraudulent representation to Santos: “George please congratulate my friend Gary Fortuna for winning the Clearwater Florida Beef Eating Contest. He ate almost 6 pounds of loose ground beef in under 30 minutes – which was a new record! He’s not feeling great right now but the doctor thinks he will be released from the hospital soon. Please wish him a speedy recovery!” (“Fake Request 1”)

b. On or about December 6, 2023 at approximately 4:55 p.m. Kimmel, misrepresenting himself as “Jane” made the following fraudulent representation to Santos: “George please congratulate my mom Brenda on the successful cloning of her beloved schnauzer Adolf. She and Doctor Haunschnaffer went through a lot of dogs in the trial runs but they finally got it to stick. Tell her to give Adolf a big belly rub for me!” (“Fake Request 2”)

c. On or about December 7, 2023, at approximately 12:18 p.m. Kimmel, misrepresenting himself as “Ron” made the following fraudulent representation to Santos: “My name is Ron. Please tell my wife to call me George. Not George my name is Ron. You are George. Just tell her to call me George. But again Ron. I haven’t seen Swoosie or the kids since my disco birthday and it’s not fair. She says I burned down the shed shooting off fireworks but I was trying to scare a bear away. It isn’t fair. I love my Swoosie and I just want our family together on Christmas or if not that Valentimes Day or Flag. Watch out for bears.” (“Fake Request 3”)

d. On or about December 7, 2023, at approximately 12:32 p.m. Kimmel, misrepresenting himself as “Uncle Joe” made the following fraudulent representation to Santos: “George can you please congratulate my legally blind niece Julia on passing her driving test. They said she couldn’t do it – even shouldn’t, but she’s taught herself to be able to drive safely using her other sense. She’s not a quitter! That said, the day after she got her license, she got in a really bad car accident so if you could also wish her a speedy recovery that would be amazing. She’s in a bodycast and is a very bummed out – but with help from Jesus and President Trump, soon she will be back on the road!” (“Fake Request 4”)

e. On or about December 7, 2023, at approximately 12:26 p.m. Kimmel, misrepresenting himself as “Christian” made the following fraudulent representation to Santos:: “Hey George. My friend Heath just came out as a Furry and I’d love for you to tell him that his friends and family all accept him. His “fursona” is a platypus mixed with a beaver. He calls it a Beav-apus. Can you say we all love you Beav-a-pus? He also just got the go ahead from Arby’s corporate to go to work in the outfit so we’re all so happy for him to be himself at work and at home. Could you also do a loud “Yiff yiff yiff!”? That’s the sound Beav-a-pus makes as Beav-a-pus. Thank you so much.” (“Fake Request 5”)

The presence of a recently disgraced Congressman makes some of those videos seem newsworthy on its own, adding to the fair use argument.

As noted above, Disney has a few lawyers who understand copyright. It seems likely that Santos is going to get ripped to shreds in court.