Did a New York Court Ruling Violate the U.S. Constitution?

By the Curmudgeon with Victor Sperandeo


A critically important issue, which the MSM has ignored, is the corruption of the U.S. judicial system.  The recent New York case against Donald Trump and his company is particularly alarming.  It’s a warning that confirms what Victor has been saying for several years about our nation’s “DIRE political decline.”

The Constitution is the Supreme Law of the land, the compact agreed to by the States and U.S. Federal Government that was ratified in its current format on December 15, 1791. It establishes Liberty and the Rule of Law as the basis of American Society.  State laws have to be made in “harmony” with the Constitution. It doesn’t matter if the person the law is being applied to is liked or not. 

Yet without a jury (which violates the 7th Amendment of the Constitution granting “a right to a jury trial”), Trump and his company have been charged with an excessive fine and prohibition of doing business in New York state which violates the 8th Amendment (upheld by the Supreme Court in 1998).

The basis of the charge is a New York state law written in 1956 that has never been used before to anyone’s knowledge!

New York vs Trump Court Case Overview: 

On February 16th, a New York court concluded that Donald Trump “over-valued” his company’s real estate holdings (with legal disclaimers), in order to borrow at low interest rates from banks. Manhattan judge Anthony Engoron ruled that Trump engaged in a years-long conspiracy with top executives at his company, the Trump Organization, to deceive banks and insurers about the size of his wealth and the true value of such properties as Trump Tower in Manhattan and his Mar-a-Lago club in Florida.

Engoron ordered the former U.S. President to pay over $355 million plus 9% interest and barred him from doing business in N.Y. state for three years.

The court concluded Trump lied for years about his wealth in financial statements he used to secure loans and make deals as he built the real estate empire that vaulted him to fame and the presidency.

The frauds found here leap off the page and shock the conscience,” Engoron wrote in a 92-page decision that spared Trump’s company from closure, but forced it into years of court supervision, among other sanctions and restrictions. 

This staggering civil fraud judgment against Trump was finalized in New York on Friday with the appeal process to follow.

Important Disclaimer:  The Curmudgeon is no fan of Trump and strongly believes he is a threat to U.S. democracy.  In this case, the legal research I’ve done concludes that the New York court had severely overstepped its authority in levying its fine and prohibition against Trump.


Victor and the Curmudgeon Agree:

This N.Y. state law is 100% subjective and the excessive fine levied is unconstitutional according to the 8th Amendment of the U.S. constitution: 

Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.” 

The above clause was taken verbatim from the English Bill of Rights of 1689 and not challenged for centuries. Up till recently, it had only been applied to the U.S. death penalty.

Landmark Supreme Court Case:

In 1998, the Supreme Court upheld and clarified the strictures of the 8th Amendment clause. The touchstone of the constitutional inquiry under the Excessive Fines Clause is the principle of proportionality: The amount of the forfeiture must bear some relationship to the gravity of the offense that it is designed to punish.  Here’s the evidence for that assertion:

In United States v. Bajakajian case, the government sought to require that a criminal defendant charged with violating federal reporting requirements for transporting more than $10,000 in currency out of the country forfeit all of the currency involved, which totaled $357,144. 

In opinion No. 96—1487, the Supreme Court held that the forfeiture in that forfeiture violated the Excessive Fines Cause because the amount forfeited was grossly disproportionate to the gravity of defendant’s offense.  Justice Clarence Thomas delivered the opinion of the Court:

“The question in this case is whether forfeiture of the entire $357,144 that respondent failed to declare would violate the Excessive Fines Clause of the 8th Amendment. We hold that it would, because full forfeiture of respondent’s currency would be grossly disproportional to the gravity of his offense.”

With that Supreme Court decision in mind, the Curmudgeon concludes that the N.Y. court’s ruling against Trump violates the 8th Amendment’s Excessive Fines clause and is indeed “cruel and unusual punishment.”

Victor’s Conclusion:

All value in real estate is subjective, banks did their own due diligence on the value of Trump’s properties, and no one lost a penny.  This was not a crime or even a threat of a crime and the punishment was severely excessive! 

A dangerous precedent has been set. This unconstitutional and subjective N.Y. law can now apply to anyone that the powers that be want to destroy.  That’s what is so alarming!

Cartoon of the Week:

End Quote:

“First, they came for the socialists, and I did not speak out—because I was not a socialist.  Then they came for the trade unionists, and I did not speak out—because I was not a trade unionist.  Then they came for the Jews, and I did not speak out—because I was not a Jew.  Then they came for me—and there was no one left to speak for me.”

—Martin Niemöller (1892–1984) was a prominent Lutheran pastor in Germany. In the 1920s and early 1930s, he sympathized with many Nazi ideas and supported radically right-wing political movements. But after Adolf Hitler came to power in 1933, Niemöller became an outspoken critic of Hitler’s interference in the Protestant Church. He spent the last eight years of Nazi rule, from 1937 to 1945, in Nazi prisons and concentration camps.


Be well, try to be objective, success, and good luck.  Till next time………………..

The Curmudgeon

Follow the Curmudgeon on Twitter @ajwdct247

Curmudgeon is a retired investment professional.  He has been involved in financial markets since 1968 (yes, he cut his teeth on the 1968-1974 bear market), became an SEC Registered Investment Advisor in 1995, and received the Chartered Financial Analyst designation from AIMR (now CFA Institute) in 1996.  He managed hedged equity and alternative (non-correlated) investment accounts for clients from 1992-2005.

Victor Sperandeo is a historian, economist and financial innovator who has re-invented himself and the companies he's owned (since 1971) to profit in the ever changing and arcane world of markets, economies, and government policies.  Victor started his Wall Street career in 1966 and began trading for a living in 1968. As President and CEO of Alpha Financial Technologies LLC, Sperandeo oversees the firm's research and development platform, which is used to create innovative solutions for different futures markets, risk parameters and other factors.

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