A New York judge ruled on 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-Ggeneral Letitia James in her lawsuit against Trump, effectively deciding that no trial was needed to determine that he had fraudulently secured favourable 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”. James, in a brief statement, said, “We look forward to presenting the rest of our case at trial.”
A lawyer for Trump, Christopher Kise, indicated that he would likely appeal the decision, which he called “outrageous” and “completely disconnected from the facts and governing law”. He said that the judge ignored an earlier appeals court ruling and “basic legal, accounting and business principles”.
Trump, for his part, noted that Engoron was a Democrat and called him “deranged”.
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 Street 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, and his golf club in Westchester.
The order will not dissolve Trump’s company, which is a collection of hundreds of entities, but the decision could nonetheless have a sweeping impact on the company’s 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 decision seeks to nationalise one of the most successful corporate empires in the US and seize control of private property,” Kise said.
The order would also unwind the Trump Organisation LLC. That entity is relatively inconsequential, a vehicle for the sprawling company’s brand name. But it has been synonymous with Trump from his earliest days as a developer with a penchant for tabloid publicity.
While James’ civil case had been overshadowed by the 4 criminal indictments of the former President the judge’s decision, if it stands, will represent the first punishment to emerge from the investigation.
New York Times News Service
