Legal Firestorm: New York Judge Finds Donald Trump and Sons Liable for Fraud
In a stunning legal development, a New York judge has found former President Donald Trump and his adult sons liable for fraud, delivering a serious blow to the Trump Organization’s financial standing just as Trump considers a second term in the White House. This groundbreaking ruling by Judge Arthur Engoron not only contradicts Trump’s claims of accurate financial reporting but also endangers the future of the Trump Organization.
The judge’s decision, handed down on Monday, categorically rejects Trump’s argument that he did not inflate the values of his various properties, including golf courses, hotels, and residences at Mar-a-Lago and Seven Springs, on financial statements.
“In defendants’ world: rent-regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate into thin air; a disclaimer by one party casting responsibility on another party exonerates the other party’s lies,” wrote Judge Engoron. “That is a fantasy world, not the real world.”
This ruling comes in response to a lawsuit brought by New York Attorney General Letitia James, who seeks $250 million in damages, a prohibition on the Trump family from serving as officers of a New York-based business, and a five-year halt on the company’s business transactions.
The trial to determine the damages and the full impact of Engoron’s ruling is expected to commence next week, leaving many questions unanswered. However, one significant consequence of the judgment is the cancellation of business certifications for Trump-related entities named as defendants in the case, including the Trump Organization. This is a major blow to the business that has long been synonymous with the former president’s brand.
In addition to the uncertainty surrounding property dissolution, it remains unclear if this ruling will affect properties outside of New York, such as Mar-a-Lago, and whether the Trumps can transfer New York-based assets to a company located in another state.
New York Attorney General Letitia James responded to the ruling by stating, “Today, a judge ruled in our favor and found that Donald Trump and the Trump Organization engaged in years of financial fraud. We look forward to presenting the rest of our case at trial.”
Donald Trump, on the other hand, vehemently condemned the judgment, accusing Judge Engoron of being politically motivated. He declared, “It is a great company that has been slandered and maligned by this politically motivated Witch Hunt. It is very unfair, and I call for help from the highest Courts in New York State, or the Federal System, to intercede. THIS IS NOT AMERICA!”
Trump’s attorney, Christopher Kise, also criticized the decision, emphasizing its disconnection from facts and governing law. He pledged to explore all available appellate remedies to rectify what he considers a miscarriage of justice.
The allegations against Trump include inflating the value of his Trump Tower triplex apartment threefold, resulting in an overvaluation of between $114 million to $207 million. Judge Engoron characterized such a discrepancy, made by a real estate developer valuing his own living space, as fraud.
The judge did not mince words in his criticism of the Trumps’ defense arguments, comparing them to a comedic line from “Duck Soup”: “Well, who ya gonna believe, me or your own eyes?”
The lawsuit alleges that Trump and his family defrauded lenders, insurers, and other entities. Notably, Ivanka Trump was dismissed as a co-defendant in June.
The judge’s order rejected Trump’s deposition testimony, where he argued that the financial statements contained disclaimers. The judge dismissed this defense, stating that “the defendants’ reliance on these ‘worthless’ disclaimers is worthless.”
While the trial is set to continue, the attorney general’s office no longer needs to prove the falseness of the financial statements, as they pursue liability for insurance fraud and false business records against Trump and his sons.
The trial’s start date remains uncertain as Trump seeks intervention from the appeals court. A decision on this matter is expected soon.
