By Jack Queen and Luc Cohen
NEW YORK (Reuters) -Donald Trump and his onetime lawyer and fixer Michael Cohen faced off for a second straight day on Wednesday in a Manhattan courtroom, where the former U.S. president is in the midst of a civil fraud trial over his family real estate company's business practices.
Cohen, who cut ties with Trump five years ago, is expected to undergo more cross-examination by Trump's lawyers determined to undermine his credibility.
Cohen testified on Tuesday that Trump "arbitrarily" inflated the value of the Trump Organization's real estate assets to secure favorable insurance premiums. Cohen said he doctored financial statements so the property values matched "whatever number Mr. Trump told us."
The insider testimony could bolster New York Attorney General Letitia James' argument that Trump, his company and several of its executives unlawfully inflated property values. The case could break up Trump's business empire.
Trump, the frontrunner for the Republican nomination to challenge Democratic President Joe Biden in the 2024 U.S. election, has denied wrongdoing and defended the valuations of his properties.
Speaking to reporters outside the courtroom before entering, Trump repeated his oft-stated claim that the trial is a "witch hunt."
"We have the facts on our side," Trump said. "The company is much stronger than they anticipated."
Trump and his lawyers have repeatedly called Cohen a "liar" and are likely to use Cohen's admitted history of deceit to challenge his testimony.
Cohen in 2018 pleaded guilty to a campaign finance violation and lying to Congress about Trump's business dealings in Russia, which he testified on Tuesday he did at Trump's direction.
In about a half hour of cross-examination on Tuesday, Trump lawyer Alina Habba asked Cohen questions about the statement he gave in court in connection with his guilty plea to cast him as a convicted felon and serial liar.
Before the trial began on Oct. 2, Justice Arthur Engoron found that Trump fraudulently inflated his net worth and ordered the dissolution of companies that control crown jewels of his real estate portfolio, including Trump Tower in Manhattan. That ruling is on hold while Trump appeals.
The trial largely concerns damages. James is seeking at least $250 million in fines, a permanent ban against Trump and his sons Donald Jr and Eric from running businesses in New York and a five-year commercial real estate ban against Trump and the Trump Organization.
Engoron last week fined Trump $5,000 for violating a gag order barring him from disparaging court staff during the trial and warned that any future transgressions could bring imprisonment.
(Reporting by Jack Queen and Luc Cohen in New York;Editing by Noeleen Walder, Bill Berkrot and Will Dunham)
