Former US president Donald Trump.
Credit: Reuters Photo
A New York judge ruled Tuesday that Donald Trump persistently committed fraud by inflating the value of his assets, and stripped the former president of control over some of his signature New York properties.
The decision by Justice Arthur Engoron is a major victory for Attorney General Letitia James in her lawsuit against Trump, effectively deciding that no trial was needed to determine that he had fraudulently secured favorable terms on loans and insurance deals.
James has argued that Trump inflated the value of his properties by as much as $2.2 billion and is seeking a penalty of about $250 million in a trial scheduled to begin as early as Monday.
Engoron wrote that the annual financial statements that Trump submitted to banks and insurance companies “clearly contain fraudulent valuations that defendants used in business.”
A lawyer for Trump, Christopher Kise, indicated that he would appeal the decision.
While the trial will determine the size of the penalty, Engoron’s ruling granted one of the biggest punishments James sought: the cancellation of business certificates that allow some of Trump’s New York properties to operate, a move that could have major repercussions for the Trump family business.
The decision could terminate Trump’s control over a flagship commercial property at 40 Wall St. in lower Manhattan and a family estate in Westchester County. Trump might also lose control over his other New York properties, including Trump Tower in midtown Manhattan.
The order will not dissolve Trump’s company, but the decision could have a sweeping impact on its New York operations. If Engoron’s decision is not reversed by an appeals court, it could shut down an entity that employs hundreds of people working for Trump in New York, effectively crushing the company. The order would also unwind the Trump Organization LLC.
Engoron also levied sanctions on Trump’s lawyers for making arguments that he previously rejected. He ordered each to pay $7,500, noting that he had previously warned them that the arguments in question bordered on being frivolous.
Even if his attempt to appeal the ruling is unsuccessful, Trump still has an opportunity to delay the trial, or even gut the case. Trump has sued Engoron himself, and an appeals court is expected to rule this week on his lawsuit.