#What Trump stands to lose in the New York civil trial [Video]

Donald Trump’s legal woes aren’t limited to four high-profile criminal prosecutions. The former president also faces a civil lawsuit filed last year by New York Attorney General Letitia James, which went to trial on Oct. 2. The judge in the case has already found Trump, his two adult sons, and his company, The Trump Organization, liable for fraud and ordered the cancellation of licenses that allow Trump to do business in the state.

The trial, which could last until December, will establish how much Trump owes in damages.

Trump says he’s innocent, of course, and he’s sure to appeal the judge’s ruling. At a minimum, however, the trial will expose business practices Trump would prefer to keep private. The suit could also be costly: James wants Trump to disgorge $250 million, the amount she says he gained by duping banks and insurers. And if Trump loses his New York business licenses, it could threaten the viability of the real estate company his father Fred started decades ago.

The suit is basically a follow-up to a 2018 New York Times exposé claiming that Trump participated in a variety of “dubious tax schemes … including instances of outright fraud.” Trump’s former lawyer, Michael Cohen, has likewise accused Trump of criminal activity, including some crimes Cohen participated in and went to prison for.

In the suit, James asserts that Trump and his real estate company “engaged in numerous acts of fraud and misrepresentation” for at least a decade. It details how Trump knowingly and consistently overstated the value of at least 23 commercial properties, for the purpose of getting lower interest rates and cheaper insurance. Trump provided much lower valuations for some of the same properties when filing tax documents, essentially ratcheting valuations up or down based on circumstances and financial implications.

The variations are not trivial. In one example cited by the judge in the case, Arthur Engoron, appraisers valued Trump’s Seven Springs estate in New York at around $30 million. Yet in state financial filings, Trump reported the value to be $261 million. In another, Trump claimed his 11,000-square-foot Trump Tower residence was actually 33,000 square feet, resulting in an overvaluation of somewhere between $114 million and $207 million.

“A discrepancy of this order of magnitude, by a real-estate developer sizing up his own living space of decades, can only be considered fraud,” Engoron wrote in September in his finding of liability.

One oddity of this suit is that prosecutors are not claiming anybody lost money or even suffered harm because of Trump’s overvaluations. The presumed victims aren’t customers Trump defrauded, contractors he stiffed, or shareholders he lied to. The victims are banks and insurance companies that supposedly undercharged Trump for loans and insurance policies, because Trump told them his properties were more expansive and valuable than they actually were.

The government doesn’t usually sue on behalf of big businesses that have their own well-staffed legal departments to protect them. James seems to be taking this approach because New York law empowers the attorney general to seek damages caused by fraudulent business behavior as a form of consumer protection. The law doesn’t require the prosecutors to identify a victim or even demonstrate anybody suffered harm.

“What makes this statute particularly powerful is that there doesn’t have to be a loss,” Will Thomas, a law professor at the University of Michigan’s Ross School of Business, told Yahoo Finance. “This statute has been used to disgorge profits illegally gained. The government can be allowed to claw back all of those profits. Provable nature is lower, and you don’t have to prove intent or willfulness.”

Trump has embraced his various legal challenges and characterized them as politically motivated persecution. He points out that James is an elected Democrat in one of the most anti-Trump blue states. And his approval rating among Republicans has ticked up, not down, as civil and criminal cases have besieged him. So the New York case may have little or no effect on Trump’s status as the front-runner for the 2024 Republican presidential nomination.

There are wild cards, though. Trump has said he plans to testify in the case, which is likely to provide a stark contrast with the blustery and often dishonest rants Trump regularly delivers when he’s campaigning. Trump has testified under oath many times in lawsuits and other legal proceedings, and he tends to be understated and relatively humble when there are legal penalties for lying. He could very well contradict his own public statements about his net worth or his business success — or even worse, look weak — if necessary to avoid a perjury charge.

One factor in Trump’s favor: While some parts of the New York trial will be televised, witness testimony will not be. So if Trump says something embarrassing, voters might hear about it but they won’t see it with their own eyes. In today’s political environment, many voters won’t believe something happened if there’s no video.

The biggest risk to Trump may be the loss of his New York businesses. If Judge Engoron’s order revoking Trump’s business licenses survives appeal, then a court-appointed receiver will take possession of those businesses and sell them to the highest bidder. Trump would get the proceeds, and he’d still manage a variety of Trump properties outside of New York state.

But he’d be exiled from the state where his family’s company took root, and the reputational harm could affect his ability to get financing and do business elsewhere. The ultimate victim of Trump’s exaggerations might be Trump himself.

Click here for politics news related to business and money

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube