Trump and NY AG Letitia James are fighting hard over one short but incriminating quote from his NY fraud trial

• Backstage at Trump's fraud trial, they're sparring over key conspiracy testimony from Monday.
• The testimony accuses Trump of personally ordering that his net worth "go up" each year.

Behind the scenes at Trump's civil fraud trial, they're fighting on paper over a single, brief bit of testimony from Monday that New York officials say places Donald Trump at the top of a conspiracy to trick banks and insurers about how much he's really worth.

In the testimony, one of the Trump Organization's current top finance executives said he'd been told by his boss, then-CFO Allen Weisselberg, that "Mr. Trump" likes to see his bottom line "go up" each year.

Trump's side calls the testimony, by the Trump Organization's assistant vice president for finance operations, Patrick Birney, inadmissible hearsay.

But in court papers filed Tuesday afternoon, New York Attorney General Letitia James pushed hard to keep it in the trial. It is perhaps the strongest evidence directly implicating Trump, who famously shuns emails and computers and relies instead on spoken directives.

Trump's lawyers are expected to respond in a brief of their own in the coming days.

"We write further to the discussion on the record regarding the admissibility of the testimony from Patrick Birney that Allen Weisselberg told him "Mr. Trump wanted his net worth on the Statement of Financial Condition to go up," James' filing from Tuesday begins.

Birney's testimony is, actually, double hearsay. It alleges that Trump said something to his CFO, and that the CFO then relayed that something to Birney.

Neither Weisselberg nor Trump – both defendants in James' massive fraud lawsuit – have yet been asked to verify what they allegedly said in this game-of-telephone relay. But in sworn depositions before the attorney general's office, both Weisselberg and Trump have minimized their own involvement in the drafting of the net worth statements.

As hearsay, Birney's testimony cannot be admitted as proof that Trump actually did order his underlings to defraud banks, the judge noted on Monday.

"Is it admissible to show the truth of the statement? I would say no," New York Supreme Court Justice Arthur Engoron, who is presiding over the non-jury trial, said when Trump's side first raised the hearsay objection, minutes after Birney left the witness stand.

Still, "It can be admitted as evidence that they conspired," Engoron added, saying he needed to hear more arguments before deciding.

The judge asked both sides to send him within the next few days their brief arguments on whether Birney's statement is admissible or not.

Eric R. Haren, a special counsel to James, argued in the attorney general's brief that it doesn't necessarily matter if Trump ordered his numbers "go up." What matters is whether Trump and Weisselberg entered into an agreement or conspiracy.

The trial is being held to determine if Trump and four top executives – including Weisselberg, Eric Trump, and Donald Trump, Jr. – conspired to falsify business records and to commit insurance and bank fraud.

"Regardless of its truth, Mr. Weisselberg's statement tends to show the existence of an illicit agreement or scheme," Haren argues.

James has already proven that Trump and his top executives grossly misrepresented his worth by billions of dollars a year in the annual net worth statements he submitted to banks, insurers, and others.

And the judge has already ruled that a receiver be appointed to take over the company and to "dissolve," meaning sell-off, unspecified properties that benefitted from the fraud.

But the trial, which is expected to last well into December, will now determine if Trump and the other defendants intentionally conspired to break state banking and insurance laws, and what the final penalties will be.

James is seeking repayment of some $250 million she says Trump pocketed in interest-rate savings and other benefits. She also wants to permanently ban Trump and his top executives from ever running a business in New York state.

Trump has called the AG's case a politically motivated witch hunt, a claim he repeated as recently as Tuesday from just outside the courtroom doors.