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Former U.S. President Donald Trump and his family business are heading to trial in New York to determine the penalties they owe following allegations that they artificially inflated Trump's assets to secure favorable loans and insurance deals. Here's a closer look at the case brought by New York Attorney General Letitia James against Trump, a leading candidate for the 2024 Republican presidential nomination.

Trump, along with his businesses and two adult sons, is accused of inflating assets by $1.9 billion to $3.6 billion annually from 2011 to 2021. They allegedly used incorrect property sizes and unrealistic development assumptions to arrive at these inflated values, saving hundreds of millions of dollars on loans and insurance premiums.

Potential consequences for Trump

In the civil case, Trump doesn't face criminal penalties, but he could endure significant financial and business repercussions. James is seeking at least $250 million in penalties and a ban on Trump and his sons from running businesses in New York. Additionally, a five-year commercial real estate ban against Trump and the Trump Organization is being pursued.

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The trial could result in the dissolution of some of Trump's business entities and the appointment of independent receivers to oversee their operations. The full extent of these consequences on Trump's business holdings remains unclear, but it may provide clarity on whether the assets in question will be liquidated.

Trump's response to the case

Trump's legal team disputes James' figures, arguing they are based on flawed accounting methods. They claim that Trump's asset valuations consider his "investment genius." During a deposition in April, Trump downplayed the allegations, emphasizing his accomplishments as president and distancing himself from day-to-day decisions in his Trump Organization. On his Truth Social platform, Trump labeled the accusations as "ridiculous and untrue" and criticized Justice Arthur Engoron, who ruled against him, as a "DERANGED" judge.

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The trial will not lead to criminal penalties for Trump but could significantly impact his finances and business operations, with the potential for lasting consequences on his business empire.