27-9-2023 (NEW YORK) Former US President Donald Trump and his family business have been found liable for fraudulently inflating the value of their properties and assets, marking a significant setback for the former president that could severely impact his business operations in New York.
In a strongly worded ruling, Justice Arthur Engoron of the New York state court in Manhattan has paved the way for state Attorney General Letitia James to assess damages during an upcoming trial scheduled for October 2.
Furthermore, Engoron has ordered the cancellation of certificates that allowed certain Trump businesses, including the Trump Organization, to operate in New York. He has also called for the appointment of a receiver to oversee the dissolution of these businesses.
The judge’s decision underscores how Trump, his adult sons Donald Jr. and Eric, the Trump Organization, and other defendants manipulated valuations and inflated Trump’s net worth to serve their business interests.
Judge Engoron commented that these actions created a “fantasy world, not the real world.”
Additionally, the judge admonished the defendants’ lawyers for making “preposterous” legal arguments and encouraging their clients’ “obstreperous” behavior.
Trump and the other defendants maintain their innocence, asserting that they did not commit fraud and that the challenged transactions were profitable. They plan to appeal the ruling.
In response to the judgment, Christopher Kise, a lawyer for Trump, denounced the decision as “outrageous” and vowed to pursue all available appellate remedies to rectify the perceived injustice.
State Attorney General Letitia James expressed anticipation for presenting the remainder of her case at the upcoming trial.
Financial expert Bill Black of the University of Minnesota Law School characterized the ruling as “devastating” for Trump, as the cancellation of business certificates could significantly affect his ability to generate income. The impact is especially pronounced because many of the Trump family’s assets are held by limited liability companies (LLCs).
The ruling comes at a time when Donald Trump holds a commanding lead in the race for the 2024 Republican presidential nomination.
On his Truth Social platform, Trump dismissed the allegations of fraud as “ridiculous and untrue” and criticized Judge Engoron as a “DERANGED” judge acting on behalf of Attorney General James.
Trump’s repeated claims of “witch hunts” regarding the legal challenges he faces were also referenced in his response to the ruling.
The legal battle began in September 2022 when Letitia James filed a lawsuit against Trump, his adult children, and the Trump Organization. The suit accused them of lying for over a decade about asset values and Trump’s net worth to deceive banks and insurers into offering more favorable terms.
Judge Engoron acknowledged that James presented “conclusive evidence” that Trump overstated his net worth by an amount ranging from $812 million to $2.2 billion. He found this misstatement to be significant, even within the context of high finance.
Among the assets Trump overvalued were his Mar-a-Lago estate in Florida, his penthouse apartment in Trump Tower in Manhattan, and various office buildings and golf courses. The judge took particular issue with the claim that Trump’s penthouse was 30,000 square feet, almost three times its actual size, leading to an overvaluation of as much as $207 million.
Engoron also chastised Trump for offering defenses during a deposition that lacked a factual basis, including the argument that there was nothing wrong with valuing properties differently if their values later increased. Trump’s implication that he could find a Saudi Arabian buyer willing to pay any price he suggested was also criticized.
The ruling does not automatically lead to the commencement of the fraud case; Trump has filed a lawsuit to postpone the trial, alleging that Judge Engoron and Letitia James ignored an appeals court order to narrow the case. A ruling on the delay request is expected in the coming week.
