The news broke in quick succession: New York’s district attorney, a Democrat, will attempt to jail Donald Trump in a trial starting next month; a Democratic Party judge ordered Trump and his affiliates to “disgorge” $450 million in a novel civil case brought by New York’s Democratic attorney general—and Russian opposition leader Alexei Navalny died in a Siberian prison.  

Democrats want to strip Trump of his assets and send him to jail to die like Navalny; that’s how ruthless they have become. Why? Donald Trump represents a democratic threat to Democrats – their power, their narratives, their culture, and their coalition. So, Democrats decided to wage war in the friendly confines of their home courts to destroy their nemesis and short-circuit democracy.  

Justice Arthur F. Engoron’s opinion in the civil action brought by Attorney General Letitia James is premised on the idea that Trump fraudulently obtained lower rates on money he borrowed by offering lenders recourse to more of his assets, some of which he overstated.

Engoron glosses over the most salient fact of this case – there was no victim – and he does so in a decidedly schoolmarmish preface: “Timely and total repayment of loans does not extinguish the harm that false statements inflict on the marketplace,” the judge wrote in his order. Without bothering to do much explaining regarding this expansive theory, the judge added, “Here, despite the false financial statements, it is undisputed that defendants have made all required payments on time.”

So, then, a $450 million fine for inflating the size of Donald Trump’s portfolio. It makes one wonder what the judge would have ordered if Trump had defaulted. Summary execution?

Deutsche Bank offered Trump two credit options: nonrecourse and full recourse. When Trump borrowed to renovate the Old Post Office in D.C., the Doral in Miami, and to build the iconic Trump Tower in Chicago, Deutsche offered Trump a credit facility that would be secured only by that project. A nonrecourse loan is riskier for the lenders, safer for Trump, and therefore carried a much higher interest rate.

Deutsche Bank also offered Trump a full recourse credit facility for each project, backed by a personal guarantee from Donald Trump and his various entities. This is a safer loan for lenders because it is backed by more assets, riskier for Trump (because he put the whole empire on the line for each of these projects), and so carried a much lower interest rate. 

Trump chose to put all of his assets at risk in exchange for the lower interest rate. Therefore, the bank wanted more information, and had covenants in the loan, about his other assets too.

The judge held that Trump and his affiliates overstated the value of certain of his assets, and therefore suggests (without corroborating testimony in his 92-page opinion) that Deutsche would not have offered the full recourse loans but for the overstatement of these particular assets.   

It’s not disputed that Trump had other assets or that his net worth on a conservative basis runs into the billions. However, the value of Trump’s assets, almost all of which are privately held and for which there is not a ready market, is a matter of judgment. Not surprisingly, promoters ascribe higher values to their own assets and ideas – and Trump is a promoter.  

Deutsche Bank’s witnesses testified that the bank assumed the value of the assets and liabilities were “broadly accurate,” then assumed Trump’s aggregate asset portfolio was worth one half of its stated value (and one asset, which the judge also held was significantly overvalued, was only worth 25% of its stated value) before agreeing to proceed with the full recourse loan.  

The judge held that the New York AG (who campaigned on going after Trump) was not required to show either that the overstatement of particular assets was material to the lender or to the overall value of his assets, or that the lenders actually relied on the statements. On the other hand, the judge asserts that “the frauds found here leap off the page and shock the conscience” – his conscience, but not the banks’.

Remember: No one in these deals alleged fraud; the loans were paid off and everyone in the deal made money; Trump still had billions in assets backing his guaranty after writing down asset values that were misstated; and the bank assumed the value was half what he said anyway.

It shocks millions of Americans that a Democrat who ran for attorney general promising to go after a Republican president of the United States is allowed to use the power of the state to go after political opponents, and then take nearly half a billion dollars without proving any financial harm from the misstatements. 

The judge arrived at the high “disgorgement” amount by holding both that the bank would not have made a full recourse loan, but would have only made the higher risk, higher cost, nonrecourse loan, and that the deals would not have happened at all but for the fraud – ordering as disgorgement both what interest would have been at the higher rates and all the profits Trump earned on the sale of two of the successful projects.

Further, the judge enjoined Trump and others from serving as officers or directors of any New York corporation or any legal entity in New York for three years – and prohibits Trump and his companies from applying for any loans for three years, which forces the Trump Organization to sell to cover the extraordinary damages found in this case.

And just like that, the N.Y. Democrats have taken a step toward stripping him of his wealth. But, there’s more to come.  

Next up in just over a month, another Democrat prosecutor will try to take away his freedom and put him in jail in a “home court” venue, with two more Democrats standing by in “home court” venues hoping for their shot at putting Trump in the gulag.

All of these cases involve novel theories that break new ground – and that also cause tens of millions of Americans to question the good faith of Trump’s opponents generally, the neutrality of courts, and the rule of law itself.

Navalny died a martyr for democracy; his death stains Putin. Democrats enamored with using the law for partisan purposes should beware: Trump’s a promoter, his opponents are venomous, and their tactics are perniciously undemocratic; and the American people are watching.