Experts say that there are key differences between the high valuation comedian Jon Stewart allegedly secured for the sale of his penthouse in 2014 compared to what former president Donald Trump is accused of doing in a civil fraud case in New York.
The New York Post reported that the Daily Show host sold a Tribeca property for $17.5 million and suggested that the price was 829 percent higher than what an assessment showed its value was. A social media user, quoted by The Post, intimated that the comedian may have done something similar to what Trump was found to have done by a judge in New York. In February, Justice Arthur Engoron, instructed the former president to pay $355 million, an amount that has shot up to $464 million with interest, for overvaluing his assets to secure better terms from financial institutions.
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But some real estate experts suggest that the two situations are different.
Will Thomas, assistant professor of business law at the University of Michigan, told Newsweek that the comparison between the two situations was misplaced.
“The analogy here between Mr. Stewart’s property sale and the Trump Organization’s business model falls somewhere between non sequitur and nonsensical,” he said. “Discrepancies between tax assessment value and market value doesn’t figure into the analysis of wrongdoing, except insofar as it informs the calculation of the disgorgement penalty.”
Thomas explained that when it comes to the two situations partly there appeared to be a misunderstanding of the issue.
“The confusion of these two situations stems, I suspect, from a misunderstanding about how disgorgement works. Disgorgement is unlike other types of legal damages, which are often used to pay compensation back to specific victims,” he noted. “The point of disgorgement is to discourage wrongdoing by making the defendant pay back the maximum potential profits attributable to their misconduct, rather than just the actual net benefits that the defendant managed to pocket from specific victims.”
Norm Miller, a real-estate economist and emeritus professor at the University of San Diego, told Newsweek that “assessed value does not equal market value and it’s typical to have a ratio of assessed value in the market value that varies by market.”
Miller added that assessed values can also lag from market values.
“They don’t necessarily increase the assessed value nearly as fast or as much as the market values change,” he said. “So it’s not unusual to have a property that’s worth $1 million that has an assessed value of $300,000 and so that’s a ratio of, what, about 3 to 1?
He added: “The assessed value is being taken as an indication of market value, which it should not.”
When it comes to Trump, he was being accused of inaccurately valuing his assets for business purposes, he said.
“He provided misleading values on the upside for financing and on the downside for property tax purposes,” Miller said.
Newsweek contacted the representatives of Stewart and Trump for comment via email on Thursday.
On Wednesday, Stewart posted on X, formerly Twitter, seemingly responding to the reports, saying that what he did was “not remotely similar to Trump.”
Other legal experts, however, suggested that part of the issue with the Trump case relates to the statute that the New York Attorney General (AG) used to pursue the case.
“This was never the intent of the statute, which is designed to protect the public from harm, and it now gives the AG carte blanche to sue anyone for any alleged ill-gotten gains,” Massimo D’Angelo, a real-estate lawyer at Blank Rome, told Newsweek. “Under the statute, it is to be shown that these types of overvaluations or alleged misrepresentations in property sizes or valuations like Stewart’s adversely impact the public. So, then the question becomes, are the public masses getting worse rates or inferior terms because of such indiscretions? This has not been shown, nor do I believe can it be.”
Newsweek contacted the New York Attorney General’s office for comment via email on Thursday.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.