A judge on Tuesday ruled that former US president Donald Trump committed fraud for years while building his real-estate empire and ordered some of his companies removed from his control and dissolved.
Judge Arthur Engoron, ruling in a civil lawsuit brought by New York Attorney General Letitia James, found that Trump and his company deceived banks, insurers and others by overvaluing his assets and exaggerating his net worth on paperwork used in making deals and securing loans.
Engoron ordered that some of Trump’s business licenses be rescinded as punishment, making it difficult or impossible for them to do business in New York, and said he would continue to have an independent monitor oversee Trump Organization operations.
Photo: Reuters
If not successfully appealed, the order would strip Trump of his authority to make strategic and financial decisions over some of his key properties in the state.
Trump, in a series of statements, railed against the decision, calling it “un-American” and part of an ongoing plot to damage his campaign to return to the White House.
“My Civil rights have been violated, and some Appellate Court, whether federal or state, must reverse this horrible, un-American decision,” he wrote on Truth Social.
He said that his company had “done a magnificent job for New York State” and “done business perfectly,” calling it “A very sad Day for the New York State System of Justice!”
Trump’s lawyer Christopher Kise said that the legal team would appeal, calling the decision “completely disconnected from the facts and governing law.”
Trump, his company and key executives repeatedly lied on financial statements, reaping rewards such as favorable loan terms and lower insurance costs, Engoron ruled.
Those tactics contravened the law, the judge said, rejecting Trump’s contention that a disclaimer on the financial statements absolved him of any wrongdoing.
“In defendants’ world, rent-regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate into thin air; a disclaimer by one party casting responsibility on another party exonerates the other party’s lies,” Engoron wrote in his 35-page ruling. “That is a fantasy world, not the real world.”
Manhattan prosecutors had looked into bringing criminal charges over the matter, but declined to do so, leaving James to sue Trump and seek penalties that aim to disrupt his and his family’s ability to do business.
Engoron’s ruling, in a phase of the case known as summary judgement, resolves the key claim in James’ lawsuit, but several others remain.
He is to decide on those claims and James’ request for US$250 million in penalties at a trial scheduled to start on Monday next week.
Trump’s lawyers have asked an appeals court for a delay.
“Today, a judge ruled in our favor and found that Donald Trump and the Trump Organization engaged in years of financial fraud,” James said in a statement. “We look forward to presenting the rest of our case at trial.”
Trump’s lawyers, in their own summary judgement bid, had asked the judge to throw out the case, arguing that there was no evidence that the public was harmed by Trump’s actions.
They also argued that many of the allegations in the lawsuit were barred by the statute of limitations.
Engoron equated the defense’s arguments to the plot of the film Groundhog Day, saying that he had addressed them earler.
He fined five defense lawyers US$7,500 each as punishment for “engaging in repetitive, frivolous” arguments, but denied James’ request to sanction Trump and other defendants.
James sued Trump and the Trump Organization a year ago, accusing them of routinely inflating the value of assets such as skyscrapers, golf courses and his Mar-a-Lago estate in Florida, padding his bottom line by billions.
Engoron found that Trump consistently overvalued Mar-a-Lago, inflating its value on one financial statement by as much as 2,300 percent.
The judge also said that Trump lied about the size of his Manhattan apartment.
“A discrepancy of this order of magnitude, by a real-estate developer sizing up his own living space of decades, can only be considered fraud,” Engoron wrote.
Trump’s son Eric Trump wrote on X that his father’s claims about Mar-a-Lago were correct, saying that the Palm Beach estate is “speculated to be worth well over a billion dollars making it arguably the most valuable residential property in the country.”
Eric Trump called the ruling and the lawsuit “an attempt to destroy my father and kick him out of New York.”
Under the ruling, limited liability companies that control some of Donald Trump’s key properties, such as 40 Wall Street, would be dissolved and authority over how to run them handed over to a receiver.
Donald Trump would lose his authority over whom to hire or fire, whom to rent office space to, and other key decisions.
“The decision seeks to nationalize one of the most successful corporate empires in the United States and seize control of private property all while acknowledging there is zero evidence of any default, breach, late payment or any complaint of harm,” Kise said after the decision.
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