In a significant setback for former U.S. President Donald Trump and his family business, a New York judge has determined that they fraudulently inflated the value of their properties and assets. This ruling, delivered by Justice Arthur Engoron of a New York state court in Manhattan, has the potential to severely impede Trump’s business activities within the state.
The scathing judgment will aid state Attorney General Letitia James in establishing damages for an upcoming trial scheduled for October 2. Engoron’s decision also includes the cancellation of certificates that permitted some of Trump’s businesses, including the Trump Organization, to operate in New York. Furthermore, the judge has ordered the appointment of a receiver to oversee the dissolution of these businesses.
In his ruling, Engoron criticized Trump, his adult sons Donald Jr. and Eric, the Trump Organization, and other defendants for fabricating valuations and inflating Trump’s net worth to align with their business interests. He described their actions as creating a “fantasy world” that diverged from reality.
The judge also admonished the defendants’ legal representatives for presenting “preposterous” legal arguments and enabling their clients’ disruptive behavior.
Trump and the other defendants maintain their innocence, asserting that no fraud was committed and that the challenged transactions were profitable. They intend to appeal Engoron’s decision.
Christopher Kise, a lawyer representing Trump, expressed dissatisfaction with the ruling and vowed to pursue all available avenues for rectifying what he called a “miscarriage of justice.”
Attorney General Letitia James stated her readiness to present the rest of her case during the trial.
Bill Black, a distinguished scholar specializing in financial regulation at the University of Minnesota Law School, characterized the ruling as “devastating” and noted that the cancellation of business certificates could hinder Trump’s revenue generation.
Trump, who is seeking the Republican presidential nomination for 2024, continues to maintain a significant lead in the race despite facing criminal charges in multiple cases.
On his Truth Social platform, Trump dismissed the accusations of fraud as “ridiculous and untrue” and criticized Justice Engoron as a “DERANGED” judge acting in the interests of Letitia James, a Democrat. Trump also characterized the situation as “Democrat Political Lawfare” and a “Witch Hunt.”
Engoron’s ruling is based on a lawsuit filed by Letitia James in September 2022, alleging that Trump and three of his adult children, along with the Trump Organization, engaged in a decade-long deception regarding asset values and net worth to defraud banks and insurers. The judge found substantial evidence that Trump had overstated his net worth by a significant margin, rejecting the argument that such misstatements were “immaterial.”
The judge specifically called out Trump’s exaggerated valuations of properties such as Mar-a-Lago and his penthouse apartment in Trump Tower, citing a discrepancy in the latter’s size as evidence of fraud. Engoron also highlighted Trump’s gross overvaluation of Mar-a-Lago and criticized baseless defenses presented during depositions.
This ruling comes after a state appeals court decision that partially favored James, although it did dismiss one defendant, Ivanka Trump, from the case. Trump is also facing several other legal challenges, including charges related to attempts to overturn the 2020 election, hoarding classified materials, covering up hush money payments, and a defamation trial over allegations of sexual assault.
The decision by Justice Engoron does not automatically lead to the fraud case going to trial, as Trump has sought to delay the proceedings, alleging that Engoron and James ignored the appeals court’s order to narrow the case. A ruling on the request for a delay is expected from the appeals court in the coming week.