On Tuesday, September 26, 2023, a judge ruled that Donald Trump committed years of fraud in building the real estate empire that catapulted him to fame and the White House, and ordered that some of the former president’s companies be removed from his control and dissolved .
Judge Arthur Engoron ruled in a civil lawsuit filed by New York Attorney General Letitia James that Mr. Trump and his company deceived banks, insurers and others by massively overvaluing his assets and exaggerating his net worth with the paperwork is used in closing deals and securing loans.
Judge Engoron ordered that some of Trump’s business licenses be revoked as punishment, making it difficult or impossible for them to do business in New York, and said he would continue to have an independent regulator overseeing the activities of the Trump Organization.
If not successfully appealed, the order would strip Mr. Trump of his authority to make strategic and financial decisions over some of his most important properties in the state.
Mr. Trump, in a series of statements, denounced 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 an appeals court, both federal and state, must reverse this terrible, un-American decision,” he wrote on his Truth Social site. He insisted that his company had done “a fantastic job for the State of New York” and “done the business perfectly,” calling it “a very sad day for the New York State justice system!”
Mr. Trump’s lawyer, Christopher Kise, said they would appeal, calling the decision “completely disconnected from the facts and applicable law.”
Judge Engoron’s ruling, days before the start of a non-jury trial in James’ lawsuit, is the strongest rejection yet of Trump’s carefully coiffed image as a wealthy and savvy real estate mogul turned political powerhouse.
In addition to merely bragging about his wealth, Mr. Trump, his company and key executives repeatedly lied about it in his annual financial statements, reaping rewards such as favorable loan terms and lower insurance costs, Judge Engoron found.
The tactic crossed a line and broke the law, the judge said, rejecting Trump’s claim that a disclaimer on the financial statements would absolve him of any wrongdoing.
“In the world of defendants: rent-regulated apartments are worth the same as non-regulated apartments; restricted land is worth the same as unlimited land; limitations can disappear into thin air; a disclaimer by one party that places responsibility on another party absolves the other party’s lies,” Judge Engoron wrote in his 35-page ruling. “That’s a fantasy world, not the real world.”
Prosecutors in Manhattan had considered filing criminal charges for the same conduct but declined to do so, leaving Mr. James to sue Mr. Trump and seek penalties aimed at destroying his and his family’s ability to do business to disturb.
Judge Engoron’s ruling, at a stage of the case known as summary judgment, resolves the main claim in Mr. James’ lawsuit, but several others remain. He will rule on these claims and Mr James’ request for $250 million in fines at a trial set to begin on October 2. Mr. Trump’s lawyers have asked an appeals court for a delay.
“Today, a judge ruled in our favor, ruling that Donald Trump and the Trump Organization were guilty of years of financial fraud,” James said in a statement. “We look forward to presenting the remainder of our case at trial.”
Mr. Trump’s lawyers had asked the judge to dismiss the case in their own brief, arguing that there was no evidence that the public was harmed by Mr. Trump’s actions. They also argued that many of the allegations in the lawsuit were barred by the statute of limitations.
Judge Engoron noted that he had rejected these arguments earlier in the case and equated them to the plot of the movie “Groundhog Day.” He fined five lawyers $7,500 each as punishment for “engaging in repetitive, frivolous” arguments, but denied Mr. James’ request to sanction Mr. Trump and other defendants.
Mr. James, a Democrat, sued Mr. 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, causing his profits were padded by billions.
Judge Engoron ruled that Trump consistently overvalued Mar-a-Lago, inflating its value by as much as 2,300% on one financial statement. The judge also reprimanded Trump for lying about the size of his Manhattan apartment. Mr Trump claimed his three-story Trump Tower penthouse was almost three times its actual size, and was valued at $327 million.
“A discrepancy of this magnitude, where a real estate developer estimates his own living space over decades, can only be considered fraud,” Judge Engoron wrote.
On it may be the most valuable residential property in the world. the country.” He 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 Mr. Trump’s key properties, such as 40 Wall Street, will be dissolved and authority over how to run them will be transferred to a trustee. Mr. Trump would lose his authority over who to hire or fire, to whom to rent office space and other key decisions.
“The decision seeks to nationalize one of the most successful business empires in the United States and take control of private property, while recognizing that there is no evidence of any default, violation, late payment or any complaint regarding damage,” Mr Kise said afterwards. the decision.
Mr. James’ lawsuit is one of several legal headaches for Mr. Trump, the Republican front-runner in next year’s election. He has been indicted four times in the past six months – in Georgia and Washington DC on charges of plotting to overturn his 2020 election loss, in Florida on hoarding classified documents and in Manhattan on falsifying corporate records related to hush money has been paid into his bank account. On behalf of.
The Trump Organization was convicted of tax fraud last year in an unrelated criminal case for helping executives avoid taxes on perks such as apartments and cars. The company was fined $1.6 million. One director, Allen Weisselberg, Trump’s former chief financial officer, pleaded guilty and served five months in prison.
Mr. James’ office previously sued Mr. Trump for abusing his charity to further his political and business interests. Mr Trump was ordered to give $2 million to charity as a fine, while his own charity, the Trump Foundation, was closed.
This story was reported by The Associated Press. AP reporters Eric Tucker, Jill Colvin, Bernard Condon and David B. Caruso contributed to this report.