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Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.

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Speaker 2: Sam bankman Fried built a multi billion dollar crypto empire.

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Speaker 2: Now he has to convince a jury that it wasn't

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Speaker 2: built on fraud. His FTX crypto empire collapsed in November

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Speaker 2: of last year, and he was arrested in the Bahamas

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Speaker 2: about a month later and accused of orchestrating a massive

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Speaker 2: fraud and bilking investors and customers out of billions of dollars.

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Speaker 2: On day two of his trial in Manhattan Federal Court,

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Speaker 2: the first two of a parade of former close friends

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Speaker 2: took the stand to testify against him, joining me as

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Speaker 2: Bloomberg Legal reporter Ava Benny Morrison, who was in the

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Speaker 2: courtroom today. So one of the three main witnesses who

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Speaker 2: are cooperating with prosecutors took the stand today.

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Speaker 3: Yes, we heard from Gary Wong, who co founded STX

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Speaker 3: and Alimator with san bagman Fred. The two men actually

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Speaker 3: met a math camp together when they were in high school,

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Speaker 3: and they were roommates at MIT. It was the first

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Speaker 3: time Gary had really been seen in public since the

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Speaker 3: collapse of FTX last November. He started off talking about

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Speaker 3: how he committed a multi billion dollar fraud with Sam

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Speaker 3: Bateman Freed, and that Sam Banateman Freed directed him to

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Speaker 3: change the code that eventually led to Alameda being able

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Speaker 3: to borrow billions of dollars in customer funds from FTX.

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Speaker 3: He was speaking very quickly and at certain points the

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Speaker 3: judge had to ask him to slow down. He also

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Speaker 3: had to point out Sam Bankman Freed in the court

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Speaker 3: if that sort of strained his neck, and looked over

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Speaker 3: the ocean of lawyers in front of him and pointed

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Speaker 3: at Sam and identified him in front of the jury.

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Speaker 2: Did the prosecution get into his cooperation in exchange for

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Speaker 2: his testimony?

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Speaker 3: Yes, Pretty early on, Gary said that he had committed

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Speaker 3: a financial crime and he explained that that happened at FTX,

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Speaker 3: and he he'd agreed with the prosecutor that he'd pleaded

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Speaker 3: guilty to that crime and had put into a cooperation

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Speaker 3: deal which landed him in court justifying today.

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Speaker 2: So how long was he on the stand?

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Speaker 3: Gary got on pretty late in the day. He was

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Speaker 3: on for less than an hour, so his testimony will

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Speaker 3: continue into tomorrow.

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Speaker 2: And so before him was another one of Bankman Fried's

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Speaker 2: former friends.

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Speaker 3: Yes, we heard from another close friend of them, Bankman Freed.

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Speaker 3: They also went to MIT together. They worked at STX together.

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Speaker 3: His name was Adam Yadidia. He was a developer and

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Speaker 3: he gave some pretty insightful evidence about discovering the eight

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Speaker 3: billion dollar hole Alimeter had in summer of twenty twenty two.

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Speaker 3: He spoke about a conversation he had with Sam in

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Speaker 3: June last year where he asked him about his eight

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Speaker 3: billion dollar hole and Sam said, we were bulletproof last year,

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Speaker 3: but we're not bulletproof now. And he took that to

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Speaker 3: me related to the eight billion dollars in my abilities

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Speaker 3: that Alometer had to FDx, and that debt came about

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Speaker 3: because Alimeter was able to borrow as much money as

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Speaker 3: it wanted from FTX whenever it wanted.

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Speaker 2: His testimony also sort of gave us a window into

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Speaker 2: what the lives of the FTX top staff was.

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Speaker 3: Yes, this witness spoke a little bit about how they

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Speaker 3: shared a thirty five million dollar penthouse in the Bahamas

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Speaker 3: at the luxury resort called Albany. He described it as

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Speaker 3: being dorm like in that he lived with eight or

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Speaker 3: nine other people, but not very dorm like in terms

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Speaker 3: of aesthetics. Because it was very luxurious, booked over the

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Speaker 3: ocean at a rooftop pool. The jury was also shown

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Speaker 3: a text message Sam bankmand Freed had sent to a

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Speaker 3: number of people who lived in that apartment saying that

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Speaker 3: Alameda had bought the apartment as well, which is one

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Speaker 3: of the key allegations in this case that Sam used

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Speaker 3: money that Alometer had taken from FTX to purchase property

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Speaker 3: in the Hamas.

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Speaker 2: And he was testifying under a grant of immunity.

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Speaker 3: That's right. That came out today as well that when

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Speaker 3: he received a grand jury subpoena last year as part

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Speaker 3: of this investigation, he and his lawyers met with prosecutors

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Speaker 3: and he asked for an immunity to be able to

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Speaker 3: speak to them. He was concerned that as being a

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Speaker 3: developer at Sex and working a lot on the exchange codes,

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Speaker 3: that he had unwittingly changed code that turned out to

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Speaker 3: be a crime.

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Speaker 2: How effective was the cross examination? They questioned him about

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Speaker 2: Sam Bankminfried's spending habits.

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Speaker 3: Yes, the prosecution questioned Adam, he's friends the Sex developer,

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Speaker 3: about the kind of things that Sam spent his money on.

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Speaker 3: Adam said that he didn't know Sam to be kind

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Speaker 3: of guy that bought santy clothes or nice watches or

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Speaker 3: sports cars. The defense actually asked him if Sam drove

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Speaker 3: around in a twit at a Corolla. The witness said

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Speaker 3: he didn't know, but the judge said, you know, I

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Speaker 3: think everyone in court knows what it's Toyota corollery.

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Speaker 2: It seems kind of sad because they showed a text

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Speaker 2: that said, I love you, Sam, I'm not going anywhere,

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Speaker 2: don't worry.

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Speaker 3: Yeah, And it's a bit of an insight into how

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Speaker 3: close their friendship was. Adam said that he sent this

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Speaker 3: as FTX was getting into trouble borders in November and

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Speaker 3: it was emerging publicly that Alameda owed a whole lot

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Speaker 3: of money to FTX. But he said he made the

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Speaker 3: decision to resign when he found out that Alameda was

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Speaker 3: actually using customer funds to pay back loans to creditors.

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Speaker 3: That was a fum score for him, and he resigned.

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Speaker 3: And then a few days later FTX bankruptcy.

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Speaker 2: And did his testimony undercut SBF's contention that he wasn't

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Speaker 2: closely involved with the running of Alameda.

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Speaker 3: Yes, it did. Sam publicly has long said that he

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Speaker 3: took a step back from Alameda to run FTX and

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Speaker 3: that he wasn't involved in the day today operations of Alimeter,

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Speaker 3: and his lawyers made that point during their opening statement,

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Speaker 3: So Adam's evidence sort of cuts through that. He says

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Speaker 3: that Sam knew what was going on, knew about the

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Speaker 3: relationship between FTX and Alimeter as well, and most importantly

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Speaker 3: knew about the eight billion or a whole from about

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Speaker 3: June twenty twenty two.

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Speaker 2: Besides pointing out Sam Bankman freed. Were there any exchanges

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Speaker 2: or looks between the two of them as he was testifying?

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Speaker 3: Not really. Sam mostly staid straight ahead. Sometimes he was

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Speaker 3: taking notes on his laptop, but there wasn't much interaction

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Speaker 3: between them at all. I found the witness he was

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Speaker 3: very considered and thoughtful with his answers. He would think

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Speaker 3: about the questions and then he would lean forward and

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Speaker 3: mainly answer yes or no into the microphone. If he

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Speaker 3: didn't know something, he wouldn't pretend that he tried to

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Speaker 3: know the answer to It is.

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Speaker 2: The jury paying attention.

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Speaker 3: The jury is paying attention. I think it's some of

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Speaker 3: the evidence when it was going through the MYU sure

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Speaker 3: of FTX and how they accept the customer deposits and

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Speaker 3: where the deposits plant and definitions of stable coin and

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Speaker 3: margin trading. I think, you know, maybe the attention was

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Speaker 3: waning a little bit, but when it got into the

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Speaker 3: details about their friendship and some of the criminal allegations,

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Speaker 3: I think that's when they Thinktive most engaged me anyway.

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Speaker 2: And so tomorrow in court the cross examination of Gary Wong.

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Speaker 2: Thanks so much, Eva. That's Bloomberg Legal reporter Eva Benni Morrison.

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Speaker 2: Coming up next, we'll talk to a former federal prosecutor

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Speaker 2: from the Manhattan US Attorney's Office about the strategies at

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Speaker 2: play in the trial. I'm June Grosso when you're listening

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Speaker 2: to Bloomberg. Joining me now for a look at the

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Speaker 2: strategies involved in the trial of Sam Bankman Freed is

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Speaker 2: former federal prosecutor Joshua ne f Talis, a partner at

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Speaker 2: Palace Partners. In opening statements, the prosecutor painted this picture

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Speaker 2: of Bankman Freed as calculating a criminal mastermind who used

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Speaker 2: investor deposits FGX as a personal bank account, who was

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Speaker 2: not what he appeared to be. What do you think

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Speaker 2: of that approach? Is it a stretch in Bankman Freed's case?

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Speaker 4: I don't think so. In fact, it's a common way

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Speaker 4: of introducing a white collar defendant in an embezzlement, accounting, fraud,

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Speaker 4: and misappropriation case, and particularly a case like this where

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Speaker 4: just billions and billions of dollars were allegedly misused and misappropriated.

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Speaker 4: I think it's accurate.

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Speaker 2: What does the prosecution have to prove here?

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Speaker 4: The prosecution's job is actually, I think simpler than all

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Speaker 4: of us think. They really just need to show that

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Speaker 4: bankman Freed lied to his investors, lied to his customers,

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Speaker 4: and stole the money. So it may take a long time,

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Speaker 4: there may be a lot of documents and testimony, but

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Speaker 4: in the end, it's a case about lies, greed, theft.

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Speaker 2: So bankman Freed's lawyers, in opening statements said the prosecutor

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Speaker 2: had portrayed their client as a cartoon villain rather than

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Speaker 2: the math nerd he truly was, and that Sam didn't

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Speaker 2: intend to defraud, there was no theft. What does their

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Speaker 2: opening tell you about their defense strategy?

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Speaker 4: I think they're setting up what is often the fight

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Speaker 4: in a white collar case, which is did the defendant

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Speaker 4: intend to do?

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Speaker 1: What happened?

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Speaker 4: The facts are probably not going to be too much

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Speaker 4: in dispute. Where did the money go? How is it used?

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Speaker 4: The question is, as the defense is setting it up,

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Speaker 4: did he intend to do something wrong? Did he think

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Speaker 4: he was committing a crime. And I think what we're

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Speaker 4: saying here is he didn't intend to do anything wrong.

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Speaker 4: And the government is exaggerating by trying to, as they said,

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Speaker 4: painting him as some cartoon villain. They're stretching, and they're

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Speaker 4: asking me, the jury to sort of holding their heads

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Speaker 4: judgment as to what happened and say, the government is

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Speaker 4: really not giving you a full picture.

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Speaker 2: Three of his top executives have pleaded guilty to fraud

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Speaker 2: and agreed to cooperate, including his on again, off again

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Speaker 2: girlfriend Caroline Ellison, who ran the crypto hedge fund Alimeter Research,

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Speaker 2: and she's expected to be the state's star witness. The

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Speaker 2: prosecutors portrayed her as like bankman, Freed's closest confidant, the

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Speaker 2: only one who knew what was going on, while the

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Speaker 2: defense appeared to try to shift the blame to her,

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Speaker 2: saying that, you know, he urged her to hedge their

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Speaker 2: exposure to further losses and she just didn't do it.

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Speaker 2: How much does the prosecution's case depend upon Ellison.

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Speaker 4: I don't think it rises and falls on Allison. I

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Speaker 4: think what the government is doing is using all three

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Speaker 4: of these cooperating witnesses to corroborate what I expect the documents,

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Speaker 4: the emails, the Twitter posts, the bank records will show

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Speaker 4: that the stories of these cooperating witnesses, including Alison, match

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Speaker 4: up with what the documents show. I think the drama

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Speaker 4: will be the cooperating witnesses. It's obviously a lot more

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Speaker 4: interesting to hear from live witnesses who are in the mix,

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Speaker 4: so to speak, than to have someone walk you through

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Speaker 4: how the money moved with.

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Speaker 2: They're on again, off again romantic relationship. How will that

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Speaker 2: play in, if at all, either in the prosecutions direct

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Speaker 2: or in the defenses cross So I.

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Speaker 4: Think the government's going to try to exploit that by saying,

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Speaker 4: this is someone who was as close as they get

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Speaker 4: to the defendant, and that's the type of person you

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Speaker 4: commit a crime with. You don't commit a crime with

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Speaker 4: a random person on the street. You do it with

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Speaker 4: someone you trust, including a girlfriend, and that's how you

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Speaker 4: know that she was in on it, and she's telling

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Speaker 4: you the truth. The defense, as you said, is going

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Speaker 4: to try to shift the blame and say this really

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Speaker 4: wasn't bank On Freed's fault. This was his girlfriend who

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Speaker 4: is now trying to get a good deal and shifting

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Speaker 4: the blame to him, and she didn't follow his instructions

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Speaker 4: the hedge. So the debate's going to be who's telling

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Speaker 4: the truth. Is it the government's portrayal as she's an

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Speaker 4: honest broker or the facts, or is it Bankern Freed's

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Speaker 4: trying to impeach her story and saying she's leaving out

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Speaker 4: the fact that Bankman Freed had given instructions which were

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Speaker 4: apparently ignored.

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Speaker 1: In his telling.

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Speaker 2: The biggest question, as always in criminal cases, is whether

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Speaker 2: the defendant will take the stand. Bankman Freed is not

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Speaker 2: like other defendants in that he talked and talked and

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Speaker 2: talked before and after his arrest. So it's got a

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Speaker 2: lot of explaining to do if he gets on the stand.

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Speaker 2: But do you think he's the type who may want

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Speaker 2: to take the stand.

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Speaker 4: I think he's going to take the stand, and I

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Speaker 4: think he's more likely than the average defendant to take

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Speaker 4: the stand. As you mentioned, he's talked a lot and

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Speaker 4: the government has a lot of material apparently to work with,

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Speaker 4: so he may be tempted to try to explain what

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Speaker 4: he meant. The government and the witnesses they call are

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Speaker 4: going to say that the evidence shows that he intended

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Speaker 4: to commit a crime, and Bankrent Freed may be tempted,

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Speaker 4: and it may be a good strategy to get up

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Speaker 4: there and say, listen, as his lawyers said in their

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Speaker 4: opening statements, this company went from zero to a million

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Speaker 4: in a couple of years. They were building the airplane

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Speaker 4: in the air and he's going to need to explain

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Speaker 4: why that means. The mistakes were made, but he didn't

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Speaker 4: intend to do anything wrong.

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Speaker 2: Do you think he needs to be on the stand

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Speaker 2: in order to have a chance of winning at least

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Speaker 2: one juror over.

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Speaker 4: This is the hardest decision for a defendant and as

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Speaker 4: lawyers to make. I think that this is the kind

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Speaker 4: of case where he is going to want to testify.

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Speaker 4: He seems to have that personality, and it also seems

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Speaker 4: to be the kind of case where a defendant would

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Speaker 4: want to take on that word.

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Speaker 1: Yeah.

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Speaker 2: I wonder if at some point it looks like everyone

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Speaker 2: got a deal except for him. I mean, even the

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Speaker 2: second witness, his friend was testifying under a grant of immunity.

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Speaker 2: So what it seemed to the jury like, well, he's

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Speaker 2: the only one taking the blame for everything.

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Speaker 4: The FEDI will certainly argue that, and I think that's

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Speaker 4: one of the things that the government needs to deflect.

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Speaker 4: Immunity isn't really that big of a deal. It doesn't

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Speaker 4: mean that the witness was getting a deal. What it

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Speaker 4: means is that the person had exposure and he was

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Speaker 4: being compelled to testify by the court and what he

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Speaker 4: said couldn't be used again since the prosecuted. Now that

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Speaker 4: that might be lost on the average juror. But the defense,

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Speaker 4: I expect will argue, Listen, everyone here is pointing to

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Speaker 4: finger at him. It's not fair for him to take

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Speaker 4: the fall.

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Speaker 2: At the start of the trial, prosecutors and defense attorneys

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Speaker 2: said that they'd never held any negotiations over a plea

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Speaker 2: agreement and no deal had ever been offered to bankman Freed.

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Speaker 2: Why do you think prosecutors didn't offer him a deal

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Speaker 2: so they wouldn't have to go through this trial.

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Speaker 4: I think there are two reasons they said that at

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Speaker 4: the beginning. The first is to protect the record. It's

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Speaker 4: pretty common at the beginning, right before the trial starts

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Speaker 4: to put on the record where plea discussions had are

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Speaker 4: not gone, to avoid a defendant arguing later I would

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Speaker 4: have taken the deal in this case, I think that

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Speaker 4: bankman freed. My read of this is the government will

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Speaker 4: always ask are you interested in having a conversation without

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Speaker 4: obviously getting into the details. My read is that bankment

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Speaker 4: freed just said no. I don't think the government would

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Speaker 4: have turned down a negotiated plea. But it takes two

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Speaker 4: to ten go here.

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Speaker 2: What do you think the biggest challenge for the government

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Speaker 2: will be in presenting this case.

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Speaker 4: I think the biggest challenge is keeping the narrative clear, crisp,

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Speaker 4: and understandable. As I said at the beginning, they want

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Speaker 4: to talk about the crime as a crime of mbaslement, misappropriation,

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Speaker 4: and lies. They want to avoid getting into the nuances

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Speaker 4: of crypto, how the technology worked, and getting the jurors

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Speaker 4: lost or bored. Now, that may be a strategy the

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Speaker 4: defense moves to because they want to make this sound

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Speaker 4: complicated and something that got out of control.

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Speaker 2: Yeah, his attorney and opening statement said, the rise and

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Speaker 2: fall of FTX mirrored the wider crypto industry and this

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Speaker 2: case in many ways. Is about crypto from twenty seventeen

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Speaker 2: to twenty twenty two, So you think that's where they'll

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Speaker 2: try to shift.

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Speaker 4: Yes, I think in a number of ways what you

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Speaker 4: alluded to earlier, which is is he being asked to

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Speaker 4: carry the bag for the fact that the market collapsed?

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Speaker 4: Is that unfair? And second, trying to argue that the

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Speaker 4: rules were being written for cryptocurrency as the business was

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Speaker 4: growing and as this crime allegedly took place, so it's

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Speaker 4: not fair to say he committed a crime or he

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Speaker 4: didn't intend to because there were no rules. And then

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Speaker 4: the third is sort of the I asked other people

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Speaker 4: to do things that they didn't listen to me, and that's

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Speaker 4: how a growing business, including a cryptocurrency works, And the

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Speaker 4: strategy will be to confuse the jurors, or at least

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Speaker 4: one of them, as he said, to just try to

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Speaker 4: hang the jury. I don't think this is a case

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Speaker 4: the defense orders are thinking an acquittal as likely. I

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Speaker 4: think that they're going for a hung jury.

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Speaker 2: Prosecutors have these millions of pages of digital evidence, texts

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Speaker 2: and emails and snippets of computer code, and they have

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Speaker 2: the three witnesses who turned state's evidence, and so it

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Speaker 2: seems like an uphill battle for bankman freedom that maybe

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Speaker 2: a hung jury is the most he could really ask for.

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Speaker 4: Yeah, I mean, I think trying to convince twelve people

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Speaker 4: you didn't do it is much harder, obviously than convincing

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Speaker 4: one person that there's a doubt. And when you have

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Speaker 4: that much evidence, you were really playing to the lowest

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Speaker 4: common denominator there as opposed to the government, which has

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Speaker 4: this huge burden of convincing twelve people that the defendant

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Speaker 4: is guilty. And that's why I think the government will

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Speaker 4: pursue sort of a clear narrative and the defense will

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Speaker 4: try to make this about the confusing world of crypto.

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Speaker 2: Potential prison term. We're hearing more than a century if

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Speaker 2: convicted on all charges, But what's a more likely sentence here?

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Speaker 4: There's something called the sentencing guidelines, which is an advisory

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Speaker 4: guideline Judge Caplin will have to consider if the defendant's convicted.

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Speaker 4: I imagine his guidelines will be life in prison. The reality

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Speaker 4: is that getting that much time is very rare. Sort

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Speaker 4: of burning made off is the closest analog in that regard,

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Speaker 4: and that's just sort of a different type of crime.

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Speaker 4: It's a Ponzi scheme as opposed to sort of an

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Speaker 4: embezzlement case. It's hard to predict. It really depends on

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Speaker 4: whether he testifies, and if he lies, the danger there

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Speaker 4: is he could enhance the arguments to the government have

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Speaker 4: that this is someone who needs to be punished. He

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Speaker 4: didn't just defend himself. He got in front of a

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Speaker 4: jury and lied, and that could really put his exposure

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Speaker 4: or higher.

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Speaker 2: Do you think that the judge's pre trial rulings, which

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Speaker 2: seem to favor the prosecution, do you think that they'll

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Speaker 2: hamper the defense, for example, not being able to call

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Speaker 2: the expert witnesses they wanted to, not being able to

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Speaker 2: mention advice of counsel, and opening statements.

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Speaker 4: I don't think so. Judge Kaplan is a brilliant judge.

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Speaker 4: I had the honor and privilege to try a big

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Speaker 4: insider trading case in front of him. He's very well respected,

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Speaker 4: he's very fair, and what he's trying to do is

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Speaker 4: call the balls and strikes, so to speak, which is

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Speaker 4: let the evidence that's allowed to come in come in,

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Speaker 4: and keep the evidence that's not permitted under the rules

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Speaker 4: to come in, keep that out. And there may have

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Speaker 4: been certain types of evidence the defense would have liked

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Speaker 4: to have put in because it would have helped them,

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Speaker 4: But that doesn't necessarily mean that the rules permitted it.

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Speaker 4: So yes, I may hamper them. They couldn't call certain

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Speaker 4: expert witnesses on the advice of council issues. What he

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Speaker 4: ruled was that they couldn't open on it. That doesn't

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Speaker 4: mean that if the evidence comes in a way that

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Speaker 4: allows them to mount this argument, it's off the table.

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Speaker 4: So I think he's playing it straight and fair, which

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Speaker 4: is what I would expect of one of the great

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Speaker 4: judges of the sub and district.

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Speaker 2: Wow, that's saying something. So how important is it to

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Speaker 2: the Manhattan US Attorney's office to win this case?

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Speaker 4: It's obviously important. I mean, Damian Williams is the US Attorney.

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Speaker 4: He's a friend, and he's a great a great prosecutor,

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Speaker 4: and I would say he treats all this children equally.

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Speaker 4: But this is clearly an important case because of the

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Speaker 4: press attention and because of the turn effect that it

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Speaker 4: could have in the industry. So I think it's important

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Speaker 4: they win. But I think that the government always wants

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Speaker 4: to win because they bring cases that they think are

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Speaker 4: worthy of prosecution, and they think that the conviction.

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Speaker 1: Is the right result.

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Speaker 4: Here there's a little bit of a microscope because of

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Speaker 4: the press attention. So I think that adds a little

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Speaker 4: bit of pressure for everyone.

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Speaker 2: We'll see how it all evolves. Thanks so much for

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Speaker 2: being on the show. Josh that's former federal prosecutor Joshua F.

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Speaker 2: Talis of Palace Partners. There's no case, there's no victim.

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Speaker 2: The banks are the victim, the insurance companies are a victim.

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Speaker 2: Everybody gets paid. It's a terrible, terrible thing. This was

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Speaker 2: for politics. Donald Trump held court with reporters outside the

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Speaker 2: courtroom where he's on trial for inflating the value of

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Speaker 2: his assets by billions of dollars to do banks and insurers,

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Speaker 2: effectively turning the Manhattan courthouse into a bully pulpit, creating

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Speaker 2: photo ops and sound bites of him railing about his

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Speaker 2: civil fraud trial for social media and fundraising. The trial

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Speaker 2: will help determine the fate of Trump's real estate empire.

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Speaker 2: In New York, Attorney General Letitia James is seeking a

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Speaker 2: quarter of a billion dollars and to bar Trump and

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Speaker 2: his eldest sons from serving as officers of any New

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Speaker 2: York Company Judge Arthur and Goren already resolved the biggest

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Speaker 2: claim in the case last week by holding Trump libel

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Speaker 2: for fraud. Joining me is Joshua Castenberg, a professor at

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Speaker 2: the University of New Mexico Law School and a former

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Speaker 2: judge and prosecutor in the US Air Force. Before the

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Speaker 2: trial even began, Trump called the trial a scam, a sham,

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Speaker 2: a witch on a political vendetta by the New York

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Speaker 2: Attorney General. He called her a corrupt person. He called

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Speaker 2: the judge a rogue, and said he should be disbarred.

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Speaker 2: And then repeatedly over three days, he called the judge

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Speaker 2: corrupt and made this ridiculous statement that the judge could

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Speaker 2: be charged criminally for what he's doing. What is he

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Speaker 2: up to here? This is the judge that's going to

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Speaker 2: decide the case.

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Speaker 1: Well, you know, so this is not a basis to

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Speaker 1: force the judge to accuse himself, because if it were,

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Speaker 1: everyone would be doing it.

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Speaker 3: Right.

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Speaker 1: So, this reminds me of what one of the justices

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Speaker 1: on the United States Supreme Court said many many years

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Speaker 1: ago in a New York trial called the Trial of

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Speaker 1: Foley Square. Members of the American Communist Party were on trial,

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Speaker 1: and they and their attorneys were just badgering Judge Harold Medina,

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Speaker 1: And i'll paraphrase the quote Justice Frankfurter said, they were

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Speaker 1: sorely trying the judge's patience and the hopes of seeking

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Speaker 1: a mistrial. But they forgot that when they're the cause

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Speaker 1: of the mistrial, they're not going to get it. And

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Speaker 1: I think this is exactly what's going on here. I

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Speaker 1: don't believe that Trump's attorneys are telling him to do this.

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Speaker 1: I think he's acting on his own. But this is

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Speaker 1: the kind of thing that tyrants do. You don't like

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Speaker 1: the way the courts are set up, you try to

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Speaker 1: create a scenario so that judges are harassed online or

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Speaker 1: in the public. You don't like the judge even more

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Speaker 1: so you go after their clerks. And by the way,

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Speaker 1: going after the judge's clerk is a setup on himself

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Speaker 1: for a civil suit. We know the Gen Carrol civil suit.

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Speaker 1: This is one where I think the clerk, who he

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Speaker 1: accused of having an affair with Chuck Schumer could even

438
00:22:51,200 --> 00:22:55,280
Speaker 1: go after higher dollar value because she is likely to

439
00:22:55,320 --> 00:22:58,359
Speaker 1: be harassed in the social media. But on top of that,

440
00:22:58,400 --> 00:23:00,920
Speaker 1: Trump was already unnoticed that you don't do this sort

441
00:23:00,920 --> 00:23:03,960
Speaker 1: of thing. So what is he up to. Either there's

442
00:23:04,000 --> 00:23:08,280
Speaker 1: a method to this madness or it's unrestrained maniacal behavior.

443
00:23:09,560 --> 00:23:13,239
Speaker 2: Let's talk about the actual issues in the trial. The

444
00:23:13,359 --> 00:23:18,360
Speaker 2: judge already found him liable for fraud and canceled certificates

445
00:23:18,359 --> 00:23:21,959
Speaker 2: for many of his companies holding the assets at issue.

446
00:23:22,160 --> 00:23:26,159
Speaker 2: So what's left in this trial mainly damages.

447
00:23:26,880 --> 00:23:30,359
Speaker 1: But you know, Trump's main defenses are twofold. One is

448
00:23:30,359 --> 00:23:34,960
Speaker 1: the banks have all gotten paid. And maybe that's correct,

449
00:23:35,000 --> 00:23:38,159
Speaker 1: maybe that's not correct because the way that you know,

450
00:23:38,280 --> 00:23:41,200
Speaker 1: high end real estate, as one of my good friends said,

451
00:23:41,560 --> 00:23:43,760
Speaker 1: in the world of corporate real estate, if you're not

452
00:23:43,800 --> 00:23:46,960
Speaker 1: spending other people's money, you're a chump. And so there's

453
00:23:47,000 --> 00:23:50,879
Speaker 1: always this rotating debt that gets paid over and over again.

454
00:23:50,880 --> 00:23:53,400
Speaker 1: And if it doesn't get paid, you're not the one

455
00:23:53,480 --> 00:23:57,560
Speaker 1: who who suffers. The other shareholders do. The banks do.

456
00:23:57,680 --> 00:24:00,479
Speaker 1: But then the banks find way is to basically recover

457
00:24:00,560 --> 00:24:04,679
Speaker 1: by hitting up everybody else, including governments, and you know,

458
00:24:04,800 --> 00:24:08,760
Speaker 1: lowering their interest rates on savings accounts of working women

459
00:24:08,840 --> 00:24:12,800
Speaker 1: and men in this country and the like. So he's

460
00:24:12,840 --> 00:24:16,800
Speaker 1: had a business model that's not uniquely his but that

461
00:24:16,920 --> 00:24:19,960
Speaker 1: defense may or may not work to a degree on

462
00:24:20,080 --> 00:24:23,760
Speaker 1: assessing damages. The other issue, though, the main issue, is

463
00:24:24,040 --> 00:24:27,119
Speaker 1: what has New York been out of Because New York's

464
00:24:27,280 --> 00:24:30,680
Speaker 1: civil damages, part of them are did Trump pay his

465
00:24:30,880 --> 00:24:34,800
Speaker 1: taxes and all the organization and all the taxes that

466
00:24:34,880 --> 00:24:37,600
Speaker 1: the State of New York was entitled to to fund

467
00:24:37,640 --> 00:24:41,080
Speaker 1: their police forces, their other first responders, their schools, their

468
00:24:41,160 --> 00:24:45,280
Speaker 1: road constructions, and everything else the state needs. So there's

469
00:24:45,320 --> 00:24:48,520
Speaker 1: a two hundred and fifty million dollars civil trial fraud

470
00:24:48,560 --> 00:24:51,480
Speaker 1: trial against him, And what's at stake is the two

471
00:24:51,560 --> 00:24:53,960
Speaker 1: hundred and fifty million dollars, which if he doesn't pay

472
00:24:54,000 --> 00:24:57,440
Speaker 1: any appeals it will accrue interest on a daily basis

473
00:24:57,520 --> 00:25:00,640
Speaker 1: until it makes its way through the appellate courts, and

474
00:25:00,760 --> 00:25:03,239
Speaker 1: his ability to do business in the state of New

475
00:25:03,320 --> 00:25:06,120
Speaker 1: York well, as long as the New York Stock Exchange

476
00:25:06,160 --> 00:25:08,760
Speaker 1: and the NASDAQ are in New York and New York

477
00:25:08,800 --> 00:25:11,840
Speaker 1: is sort of the capital of American commerce to this

478
00:25:12,000 --> 00:25:15,080
Speaker 1: day still, then then he's got to find other venues.

479
00:25:15,119 --> 00:25:17,959
Speaker 1: He will, that's part of his travel down to Florida.

480
00:25:18,040 --> 00:25:20,920
Speaker 1: He will find other venues. But all of that is

481
00:25:21,280 --> 00:25:24,520
Speaker 1: at stake, and it will reduce his overall net worth.

482
00:25:24,560 --> 00:25:26,800
Speaker 1: You know, it's a source of pride to him that

483
00:25:26,880 --> 00:25:30,320
Speaker 1: he's in the Forbes Top four hundred or Top one hundred,

484
00:25:30,720 --> 00:25:33,360
Speaker 1: but he's not this year. It he'll dip underneath it

485
00:25:33,480 --> 00:25:35,679
Speaker 1: if he loses the two hundred and fifty million.

486
00:25:36,560 --> 00:25:40,439
Speaker 2: His lawyers said, Christopher Guy said, quote, there was no

487
00:25:40,520 --> 00:25:43,760
Speaker 2: intent to defraud. There was no illegality, there was no default,

488
00:25:43,800 --> 00:25:46,600
Speaker 2: there was no breach, there was no reliance from the banks,

489
00:25:46,640 --> 00:25:49,359
Speaker 2: there was no unjust profits, and there were no victims.

490
00:25:49,520 --> 00:25:54,720
Speaker 2: Another lawyer, Elena Hobbas, called Trump's assets Mona Lisa properties

491
00:25:54,720 --> 00:25:58,359
Speaker 2: that could fetch premium prices if Trump sold them. Weren't

492
00:25:58,400 --> 00:26:03,359
Speaker 2: those arguments that the judge already rejected in making the

493
00:26:03,400 --> 00:26:04,240
Speaker 2: fraud finding.

494
00:26:04,800 --> 00:26:09,840
Speaker 1: Well, they're entitled to raise them for damages. Having said that,

495
00:26:10,240 --> 00:26:13,040
Speaker 1: you know, they're firing their best shot. I'm not faulting

496
00:26:13,080 --> 00:26:16,320
Speaker 1: the lawyers on the defense that they're trying to raise,

497
00:26:16,720 --> 00:26:19,639
Speaker 1: because frankly, I think it's their best shot. But the

498
00:26:19,720 --> 00:26:23,119
Speaker 1: problem with that is this is not a victimless crime.

499
00:26:23,840 --> 00:26:26,400
Speaker 1: You know, that's one of the issues that are out there.

500
00:26:26,440 --> 00:26:29,080
Speaker 1: It's not actually a crime because this is a civil trial,

501
00:26:29,160 --> 00:26:32,160
Speaker 1: of course, but it's not victimless. The people of New York,

502
00:26:32,440 --> 00:26:36,919
Speaker 1: who rely on sound commerce to have tax funding for

503
00:26:37,000 --> 00:26:40,280
Speaker 1: the things that I've already mentioned and other things, are

504
00:26:40,320 --> 00:26:43,480
Speaker 1: the victims in this case. They may not feel it directly,

505
00:26:43,880 --> 00:26:46,800
Speaker 1: but they are. The banks may or may not consider

506
00:26:46,840 --> 00:26:50,159
Speaker 1: themselves victims. I have a view of Deutsche Bank and

507
00:26:50,200 --> 00:26:53,720
Speaker 1: the other banks that they'd rather cover up their large

508
00:26:53,760 --> 00:26:56,439
Speaker 1: ass than admit to the public they were victimized. So

509
00:26:56,480 --> 00:26:59,360
Speaker 1: you're not going to have bankers coming in the idea

510
00:26:59,400 --> 00:27:02,879
Speaker 1: that of blame aiming it on Mazar's. Well, that runs

511
00:27:02,960 --> 00:27:06,359
Speaker 1: contrary to the law because ultimately you and I and

512
00:27:06,400 --> 00:27:10,560
Speaker 1: everyone else are responsible for the accuracy of our our filings.

513
00:27:10,560 --> 00:27:13,240
Speaker 1: But I understand why the defense would try to deflect that.

514
00:27:13,320 --> 00:27:16,240
Speaker 1: I mean, any reasonable lawyer would do what they're doing.

515
00:27:16,480 --> 00:27:18,240
Speaker 1: It's just that their arguments are wrong.

516
00:27:19,040 --> 00:27:22,360
Speaker 2: Trump's lawyer read from one of the disclaimers, and Trump,

517
00:27:22,520 --> 00:27:26,320
Speaker 2: during a break on Tuesday, talked about it to reporters.

518
00:27:26,320 --> 00:27:29,359
Speaker 2: He said, many many warnings page one, page two, and

519
00:27:29,480 --> 00:27:32,879
Speaker 2: many pages. It says, Please, you must understand that you

520
00:27:33,080 --> 00:27:35,920
Speaker 2: have to do your own due diligence. Do not rely

521
00:27:36,040 --> 00:27:39,480
Speaker 2: on anything, Do not rely on the financial statements. What

522
00:27:39,600 --> 00:27:41,119
Speaker 2: role do the disclaimers play.

523
00:27:42,040 --> 00:27:45,719
Speaker 1: So there's a basic theory of law that I just

524
00:27:45,880 --> 00:27:48,840
Speaker 1: went over last week with my first year criminal law

525
00:27:48,920 --> 00:27:53,159
Speaker 1: students called the Ostrich instruction. To draw an analogy of

526
00:27:53,160 --> 00:27:56,560
Speaker 1: the Ostrich instruction or the Ostrich rule, if I were

527
00:27:56,560 --> 00:27:58,600
Speaker 1: to say to you June, I'm going to give you

528
00:27:58,640 --> 00:28:02,240
Speaker 1: twenty five thousand dollars to drive a car from New

529
00:28:02,320 --> 00:28:05,360
Speaker 1: York to Los Angeles, and I'll pay for all your

530
00:28:05,440 --> 00:28:09,199
Speaker 1: gas in lodging, I have one rule, under no circumstances,

531
00:28:09,200 --> 00:28:11,760
Speaker 1: should you look in the glove compartment. Don't do it.

532
00:28:11,840 --> 00:28:14,080
Speaker 1: But here's your twenty five thousand. If you're stopped by

533
00:28:14,080 --> 00:28:17,440
Speaker 1: the Kansas State Police and their canine unit sniff's cocaine

534
00:28:17,560 --> 00:28:19,639
Speaker 1: and the glove compartment, guess what. You don't have a

535
00:28:19,680 --> 00:28:22,159
Speaker 1: defense because you had a duty to look in the

536
00:28:22,200 --> 00:28:26,320
Speaker 1: glove compartment. You take that analogy, the Ostrich analogy, the

537
00:28:26,440 --> 00:28:29,600
Speaker 1: duty to learn, into this civil case, and again it's

538
00:28:29,640 --> 00:28:32,520
Speaker 1: a civil case, and that argument just doesn't fly. It

539
00:28:32,560 --> 00:28:35,360
Speaker 1: doesn't fly either way. It doesn't help Mazar's and insurance,

540
00:28:35,400 --> 00:28:38,920
Speaker 1: heck doesn't help the Trump organization because both of them

541
00:28:39,040 --> 00:28:42,560
Speaker 1: had a duty. Both entities had a duty to insure accuracy.

542
00:28:42,880 --> 00:28:45,560
Speaker 2: Coming up next on the Bloomberg Law Show, Tension in

543
00:28:45,600 --> 00:28:48,520
Speaker 2: the Courtroom. I'm June Grasso. When you're listening to Bloomberg.

544
00:28:49,120 --> 00:28:52,200
Speaker 2: When Donald Trump's civil fraud trial broke for lunch in

545
00:28:52,280 --> 00:28:57,080
Speaker 2: Manhattan on Wednesday, the former president didn't return. Trump is

546
00:28:57,120 --> 00:28:59,880
Speaker 2: accused of inflating the value of his assets by bill

547
00:29:00,000 --> 00:29:03,360
Speaker 2: millions of dollars a year to do banks and insurers,

548
00:29:03,720 --> 00:29:06,400
Speaker 2: and the trial will help determine the fate of his

549
00:29:06,600 --> 00:29:09,680
Speaker 2: real estate empire in New York. During the two and

550
00:29:09,720 --> 00:29:12,480
Speaker 2: a half days Trump attended the trial, he turned the

551
00:29:12,480 --> 00:29:16,320
Speaker 2: Manhattan courthouse into a bully pulpit, railing against the attorney

552
00:29:16,360 --> 00:29:19,640
Speaker 2: general who brought the case, the judge who's presiding over

553
00:29:19,680 --> 00:29:24,479
Speaker 2: the trial, and the process. This is a continuation of

554
00:29:24,520 --> 00:29:28,240
Speaker 2: the single greatest witch hunt of all time.

555
00:29:28,920 --> 00:29:32,560
Speaker 4: I have a rogue judge who rules that properties are

556
00:29:32,560 --> 00:29:37,040
Speaker 4: worth the tiny fraction one to one hundred, a tiny

557
00:29:37,080 --> 00:29:38,880
Speaker 4: fraction of what they actually are.

558
00:29:39,800 --> 00:29:42,640
Speaker 2: We have a racist attorney general who's a horror show,

559
00:29:42,680 --> 00:29:44,600
Speaker 2: who ran on the basis that she was going to

560
00:29:44,600 --> 00:29:48,400
Speaker 2: get Trump before she knew anything about me. The New

561
00:29:48,480 --> 00:29:52,280
Speaker 2: York Attorney General signaled she was glad to see Trump go.

562
00:29:52,960 --> 00:29:56,160
Speaker 3: I will not be bullied, and so mister Trump is

563
00:29:56,200 --> 00:29:56,800
Speaker 3: no longer here.

564
00:29:56,800 --> 00:29:58,440
Speaker 2: That Donald Trump show is over.

565
00:29:58,880 --> 00:30:02,360
Speaker 4: This was nothing more than a political stunt, a fun

566
00:30:02,760 --> 00:30:06,720
Speaker 4: raising stop and now we can continue to go.

567
00:30:06,680 --> 00:30:09,600
Speaker 1: Forward with our trial and we are confident.

568
00:30:09,240 --> 00:30:12,080
Speaker 2: That justice will be served. I've been talking to Professor

569
00:30:12,160 --> 00:30:16,400
Speaker 2: Josh Castenberg of the University of New Mexico Law School. Josh,

570
00:30:16,480 --> 00:30:19,800
Speaker 2: there were a lot of tense moments in the courtroom

571
00:30:20,040 --> 00:30:22,840
Speaker 2: while Trump was there, and at one point, during the

572
00:30:22,880 --> 00:30:28,080
Speaker 2: state's first witness, which was Trump's longtime accountant Masar's accountant,

573
00:30:28,080 --> 00:30:32,480
Speaker 2: Donald Bender, there was this really strange interaction between one

574
00:30:32,520 --> 00:30:36,840
Speaker 2: of Trump's lawyers, Heyesue Suarez, and the judge. The judge

575
00:30:36,920 --> 00:30:41,400
Speaker 2: repeatedly warned Suarez to he was doing a painstaking questioning

576
00:30:41,400 --> 00:30:45,320
Speaker 2: of Bender over each property listed on Trump's financial statements,

577
00:30:45,320 --> 00:30:48,560
Speaker 2: and the judge warned him to stop that, to refrain

578
00:30:48,600 --> 00:30:50,640
Speaker 2: from that. And at one point the judge ran out

579
00:30:50,680 --> 00:30:54,600
Speaker 2: of patience. He pounded the bench, yelling, this is ridiculous.

580
00:30:54,840 --> 00:30:57,040
Speaker 2: That's just so rare in a courtroom.

581
00:30:57,400 --> 00:31:00,280
Speaker 1: Yeah. You know, as a former judge, I know that

582
00:31:00,320 --> 00:31:03,080
Speaker 1: you're always supposed to keep your cool in the court,

583
00:31:03,280 --> 00:31:06,440
Speaker 1: but when you have rebuked to council. First, you gently

584
00:31:06,760 --> 00:31:10,120
Speaker 1: or mind counsel what prior rulings were about and what's

585
00:31:10,200 --> 00:31:12,840
Speaker 1: relevant in the trial. But when they continue to ignore

586
00:31:12,880 --> 00:31:16,040
Speaker 1: your orders, you have two choices. You can either elevate

587
00:31:16,080 --> 00:31:18,840
Speaker 1: your voice or threaten them with contempt, or you could

588
00:31:18,920 --> 00:31:23,720
Speaker 1: remove them actually from the case. Frankly, I would say

589
00:31:23,800 --> 00:31:27,840
Speaker 1: that I would have given an actual contempt warning, saying

590
00:31:27,880 --> 00:31:31,680
Speaker 1: one more time you violated my rulings. Whether my rulings

591
00:31:31,680 --> 00:31:34,680
Speaker 1: are right or wrong. There's an appeal for that, but

592
00:31:34,880 --> 00:31:37,440
Speaker 1: I can understand a judge at the state court level

593
00:31:37,480 --> 00:31:41,440
Speaker 1: losing their temper over this. It is, however, very rare.

594
00:31:41,800 --> 00:31:44,920
Speaker 1: But let's keep in mind that. But before it got

595
00:31:44,960 --> 00:31:49,680
Speaker 1: to that point, this judge, for whatever his normal demeanor is,

596
00:31:50,280 --> 00:31:53,840
Speaker 1: was sorely tested by the point when he conducted himself

597
00:31:53,880 --> 00:31:54,640
Speaker 1: in that manner.

598
00:31:55,120 --> 00:31:57,280
Speaker 2: Would that be an a pellet issue? Is that one

599
00:31:57,280 --> 00:31:59,720
Speaker 2: of the reasons that they're testing the judge.

600
00:32:00,360 --> 00:32:03,560
Speaker 1: Oh, sure, they're trying to concoct many appellate issues, and

601
00:32:03,880 --> 00:32:08,120
Speaker 1: attorneys normally will do that, but not when they're at

602
00:32:08,200 --> 00:32:10,560
Speaker 1: fault for it. This is going to be one of

603
00:32:10,560 --> 00:32:13,080
Speaker 1: those things that the New York you know, the intermediate

604
00:32:13,120 --> 00:32:16,000
Speaker 1: appellate court if they get it, and certainly the New

605
00:32:16,080 --> 00:32:19,160
Speaker 1: York Court of Appeals, the equivalent of a Supreme court

606
00:32:19,160 --> 00:32:21,760
Speaker 1: in other states, is going to have to deal with.

607
00:32:21,800 --> 00:32:24,080
Speaker 1: But I would think up until this point the answer

608
00:32:24,080 --> 00:32:30,000
Speaker 1: from the appellate courts is this conduct was exacerbated and

609
00:32:30,200 --> 00:32:34,440
Speaker 1: ignited by the attorneys and not by the judge himself.

610
00:32:35,360 --> 00:32:37,680
Speaker 2: What do you think the Attorney General is trying to

611
00:32:38,600 --> 00:32:40,640
Speaker 2: show with the first couple of witnesses.

612
00:32:41,240 --> 00:32:44,200
Speaker 1: I think they're going to try to show that Trump

613
00:32:44,360 --> 00:32:51,600
Speaker 1: intentionally presented dubious information. And this is why the filings

614
00:32:51,640 --> 00:32:54,240
Speaker 1: were the way they were over the years, And it's

615
00:32:54,280 --> 00:32:57,480
Speaker 1: not so much mazar is doing as it is the Donalds.

616
00:32:58,200 --> 00:33:02,560
Speaker 2: Trump's lawyers filed are of appeal of Judge in Goren's

617
00:33:02,720 --> 00:33:07,000
Speaker 2: ruling last week finding him libel for fraud. What do

618
00:33:07,040 --> 00:33:10,120
Speaker 2: you think the chances are for an appeal because that

619
00:33:10,280 --> 00:33:13,240
Speaker 2: ruling was novel in a lot of ways.

620
00:33:14,040 --> 00:33:16,680
Speaker 1: You know, I don't think they're going to prevail on

621
00:33:16,880 --> 00:33:21,080
Speaker 1: that particular appeal right now. The judge's ruling was novel,

622
00:33:21,480 --> 00:33:24,360
Speaker 1: but the judge's ruling was also novel. As a result

623
00:33:24,400 --> 00:33:27,760
Speaker 1: of the defense counsel's filings as well as the Defense

624
00:33:27,840 --> 00:33:31,160
Speaker 1: Council's conduct up until this point, and so the judge

625
00:33:31,200 --> 00:33:34,400
Speaker 1: could reach a decision based on certain matters, you know,

626
00:33:34,480 --> 00:33:38,160
Speaker 1: involving the case in chief. And so it's novel, but

627
00:33:38,560 --> 00:33:41,120
Speaker 1: this is not a normal trial. And you know, the

628
00:33:41,200 --> 00:33:45,360
Speaker 1: defense have used a strategy, if I can call it that,

629
00:33:45,360 --> 00:33:49,200
Speaker 1: that has been somewhat surprising for others and for myself.

630
00:33:49,640 --> 00:33:51,480
Speaker 2: Tell me a little bit more about that strategy.

631
00:33:51,520 --> 00:33:54,680
Speaker 1: Well, you know, the first thing is did they intend

632
00:33:54,720 --> 00:33:59,480
Speaker 1: on going judge alone? Did they intend on on pursuing

633
00:33:59,520 --> 00:34:03,280
Speaker 1: the defense initially with all the discovery that's gone back

634
00:34:03,280 --> 00:34:07,240
Speaker 1: and forth with Yes, Trump signed documents, and yes, the

635
00:34:07,280 --> 00:34:12,080
Speaker 1: Trump organization may have overvalued its properties, but they did

636
00:34:12,080 --> 00:34:14,839
Speaker 1: on this unique theory that's unknown to law, like the

637
00:34:14,880 --> 00:34:19,480
Speaker 1: Mona Lisa properties. So you know, for example, if you

638
00:34:19,600 --> 00:34:21,959
Speaker 1: or I were to buy a building in New York,

639
00:34:22,040 --> 00:34:24,520
Speaker 1: we would assume that the value of the building is

640
00:34:24,560 --> 00:34:28,280
Speaker 1: what the banks, the real estate folks, Zillo or whoever

641
00:34:28,320 --> 00:34:30,400
Speaker 1: else told us what the value of the building is.

642
00:34:31,080 --> 00:34:33,600
Speaker 1: Never before that I can think of in a court

643
00:34:34,000 --> 00:34:38,319
Speaker 1: or in my research, has someone purchased a home and

644
00:34:38,360 --> 00:34:40,880
Speaker 1: then the value of their home was premised on the

645
00:34:41,000 --> 00:34:43,440
Speaker 1: name of the purchaser. You know, I was thinking in

646
00:34:43,480 --> 00:34:46,600
Speaker 1: California about all the money that Aaron Spelling spent on

647
00:34:46,640 --> 00:34:51,239
Speaker 1: his mansion, and not once Obviously Aaron Spelling may be

648
00:34:51,239 --> 00:34:54,320
Speaker 1: forgotten to many people, but not once was there anything

649
00:34:54,360 --> 00:34:56,799
Speaker 1: in the value of that home of Oh, this is

650
00:34:56,840 --> 00:34:59,840
Speaker 1: Aaron Spelling's home, so therefore it's worth a lot of money.

651
00:35:00,400 --> 00:35:02,080
Speaker 1: You know, it's worth a lot of money because it

652
00:35:02,200 --> 00:35:04,520
Speaker 1: sits on the beach. That's why it's worth a lot

653
00:35:04,520 --> 00:35:07,040
Speaker 1: of money. But it's not worth more money than the

654
00:35:07,080 --> 00:35:10,120
Speaker 1: mansion next door to it of a similar square footage

655
00:35:10,120 --> 00:35:12,200
Speaker 1: in design. And so this is what I mean by

656
00:35:12,200 --> 00:35:15,920
Speaker 1: it being unusual. They've admitted a lot in their discovery

657
00:35:15,960 --> 00:35:18,080
Speaker 1: filing to the other side, and then that goes to

658
00:35:18,120 --> 00:35:20,560
Speaker 1: the court, and so I think what makes it unusual

659
00:35:20,920 --> 00:35:23,680
Speaker 1: in terms of the judge's ruling is partly premised on

660
00:35:24,080 --> 00:35:27,000
Speaker 1: the admissions that the defense have made all along.

661
00:35:27,440 --> 00:35:30,319
Speaker 2: So the defense could have requested a jury trial.

662
00:35:30,040 --> 00:35:33,680
Speaker 1: Here, they could have. I'm very surprised they didn't because

663
00:35:34,120 --> 00:35:38,799
Speaker 1: they would have preserved several issues on appeal that are

664
00:35:38,840 --> 00:35:42,640
Speaker 1: not capable of being preserved on appeal and a judge

665
00:35:42,680 --> 00:35:47,279
Speaker 1: alone trial. For example, media reporting on the case and

666
00:35:47,320 --> 00:35:50,040
Speaker 1: how that might affect a jury, the judge's demeanor and

667
00:35:50,080 --> 00:35:54,160
Speaker 1: how that might affect a jury, the Attorney general's conduct

668
00:35:54,200 --> 00:35:56,920
Speaker 1: in the public sphere, and how that might affect a jury.

669
00:35:56,960 --> 00:36:02,040
Speaker 1: Whether the judge impermissibly allows some evidence to go before

670
00:36:02,120 --> 00:36:05,319
Speaker 1: the jury. So the courts in New York, like the

671
00:36:05,360 --> 00:36:09,000
Speaker 1: courts on the federal side, the appellate courts have a doctrine.

672
00:36:09,040 --> 00:36:13,520
Speaker 1: It's a basic doctrine that if a judge mistakenly allows

673
00:36:13,680 --> 00:36:17,319
Speaker 1: prejudicial evidence that shouldn't be brought into evidence to go

674
00:36:17,480 --> 00:36:21,399
Speaker 1: before the jury, there's a more likelihood of finding reversible error,

675
00:36:21,400 --> 00:36:24,960
Speaker 1: meaning the case gets overturned. The law presumes that the

676
00:36:25,080 --> 00:36:28,040
Speaker 1: judge can sift through the evidence and give it the

677
00:36:28,080 --> 00:36:31,239
Speaker 1: proper weight that it deserves, and so they forfeited a

678
00:36:31,280 --> 00:36:33,000
Speaker 1: lot by going judge alone.

679
00:36:33,280 --> 00:36:38,200
Speaker 2: Trump left midday on Wednesday and is expected to come

680
00:36:38,239 --> 00:36:39,760
Speaker 2: back to testify later.

681
00:36:40,160 --> 00:36:43,719
Speaker 1: He's once again said that he's going to testify, but

682
00:36:43,840 --> 00:36:47,040
Speaker 1: we know from his background that that's not always true.

683
00:36:47,120 --> 00:36:49,799
Speaker 1: In fact, times that he's promised to testify in his

684
00:36:49,840 --> 00:36:53,200
Speaker 1: own defense, he hasn't. So I'm waiting to see if

685
00:36:53,239 --> 00:36:55,640
Speaker 1: this is one of those times that he will is

686
00:36:55,680 --> 00:36:56,720
Speaker 1: it a civil trial.

687
00:36:57,080 --> 00:36:58,960
Speaker 2: The prosecution can.

688
00:36:58,800 --> 00:37:02,040
Speaker 1: Call him, but then they have to weigh the calculus

689
00:37:02,080 --> 00:37:06,319
Speaker 1: of should we bother in this? And the reason is, see,

690
00:37:06,360 --> 00:37:10,799
Speaker 1: if Trump is called by his own side, automatically, the

691
00:37:10,840 --> 00:37:15,239
Speaker 1: attorney general can cross examine him with purely leading questions.

692
00:37:15,920 --> 00:37:19,000
Speaker 1: They can set him up in a manner that they

693
00:37:19,120 --> 00:37:21,719
Speaker 1: would not be able to set him up in if

694
00:37:21,719 --> 00:37:24,640
Speaker 1: they called him. So you know, they've got away the

695
00:37:24,760 --> 00:37:28,919
Speaker 1: risks and reward calculus in calling them. But they could

696
00:37:28,960 --> 00:37:31,600
Speaker 1: also make the argument because this is a civil trial

697
00:37:31,600 --> 00:37:34,480
Speaker 1: and not a criminal trial. Look, he promised to come

698
00:37:34,520 --> 00:37:36,960
Speaker 1: here and testify and he didn't, and the judge could

699
00:37:37,000 --> 00:37:39,400
Speaker 1: consider that it's a long trial.

700
00:37:39,440 --> 00:37:42,560
Speaker 2: We'll see what happens. Thanks so much, Josh. That's Professor

701
00:37:42,640 --> 00:37:45,880
Speaker 2: Josh Castenberg of the University of New Mexico Law School,

702
00:37:46,400 --> 00:37:48,720
Speaker 2: And that's it for this edition of The Bloomberg Law Show.

703
00:37:49,040 --> 00:37:51,440
Speaker 2: Remember you can always get the latest legal news on

704
00:37:51,480 --> 00:37:55,719
Speaker 2: our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify,

705
00:37:55,920 --> 00:38:00,959
Speaker 2: and at www dot Bloomberg dot com, slash podcast Slash Law,

706
00:38:01,360 --> 00:38:03,960
Speaker 2: And remember to tune into The Bloomberg Law Show every

707
00:38:04,000 --> 00:38:07,480
Speaker 2: week night at ten pm Wall Street Time. I'm June

708
00:38:07,480 --> 00:38:09,640
Speaker 2: Grosso and you're listening to Bloomberg