Judge in Trump fraud trial imposes gag order after Trump lashes out at clerk

NEW YORK, Oct 3 (Reuters) - The judge overseeing Donald Trump's civil fraud trial on Tuesday imposed a gag order - promising sanctions for any violations - after the former U.S. president used social media to lash out against the judge's top law clerk.

Justice Arthur Engoron of the New York state court in Manhattan told lawyers for Trump and New York Attorney General Letitia James, who brought the fraud case, that attacks on his staff were "unacceptable, inappropriate and will not be tolerated under any circumstances."

Acting on the second day of testimony in the trial, the judge forbade both sides from speaking about his staff, and threatened "serious sanctions" if anyone did.

"Consider this statement a gag order," Engoron added.

James has accused Trump, his two adult sons, the Trump Organization and others of inflating asset values over a decade to secure favorable bank loans and insurance terms, and exaggerating Trump's own riches by more than $2 billion. The trial could lead to the dismantling of Trump's business empire as he seeks to regain the presidency in 2024.

Engoron spoke after Trump shared a social media post of the clerk, who was identified by name, posing with Senate Majority leader Chuck Schumer of New York, who is not involved in the case. Trump referred to the clerk as "Schumer's girlfriend."

"How disgraceful!" added Trump, the frontrunner for the Republican nomination to face Democratic President Joe Biden in the 2024 election. "This case should be dismissed immediately!!"

Trump's post was later deleted.

The order came as the government's first witness, Trump's former accountant Donald Bender, tested for a second day as the attorney general's office tries to show that Trump and his family business deceived even the people reviewing his financials.

Under questioning from Kevin Wallace, a lawyer in James' office, Bender said financial statements he prepared for the Trump Organization were largely based on self-reported figures.

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.

Earlier in the day, Trump renewed his attacks on James, telling reporters that the Democrat was "grossly incompetent" and had concocted a bogus case.

"Her numbers are fraudulent," Trump said. "She's a fraud."

Trump wore his familiar blue suit, red tie and American flag pin.

Engoron had ruled before the trial that Trump committed fraud, and canceled business certificates for companies that control crown jewels of Trump's portfolio, including Trump Tower and 40 Wall Street in downtown Manhattan.

The trial will review six additional claims including falsifying business records, insurance fraud and conspiracy, and address how much the defendants should pay in penalties. The trial could last into December.

Trump's lawyer Christopher Kise told the court on Monday that his client's valuations were actually too low, and were based on business acumen that let Trump build "one of the most successful real estate empires in the world."

Others expected to testify include the Trump Organization's former chief financial officer and controller, and Trump's former lawyer and fixer Michael Cohen. Trump and his adult sons are also on James' witness list.

After the trial ends, Trump still faces four criminal indictments over his efforts to undo his loss in the 2020 election, his handling of classified documents, and hush money paid to a porn star.

Trump has denied wrongdoing and pleaded not guilty in all of the cases. He also faces a January civil damages trial for defaming a writer who accused him of rape, which he denies.

So far, the government cases have strengthened him politically, and his campaign is using the issue to raise money by making him appear to be a martyr for Democrats using sham court cases to prevent him from retaking the White House.