In a significant legal development, a judge has ruled that former President Donald Trump committed fraud in a civil lawsuit brought by New York’s attorney general, Letitia James. The lawsuit alleged that Trump and his company engaged in deceptive practices, including inflating asset values and exaggerating his net worth, to secure favorable loan terms and insurance premiums.
Judge Arthur Engoron’s decision, coming just days before the start of a non-jury trial, marks a substantial setback for Trump, challenging his image as a savvy real estate mogul. The ruling includes penalties such as the rescission of some of Trump’s business licenses, which could severely impact his ability to operate in New York. Additionally, an independent monitor will oversee the Trump Organization’s operations.
Trump has consistently denied any wrongdoing throughout this legal battle. The lawsuit accused him, his company, and key executives of repeatedly providing false financial information on annual statements, resulting in financial advantages.
One of Trump’s central arguments was that a disclaimer on the financial statements should absolve him of any legal liability. However, Judge Engoron dismissed this argument, emphasizing that such disclaimers cannot shield individuals from dishonesty in the real world.
Manhattan prosecutors had also explored potential criminal charges related to similar conduct, but they ultimately declined to proceed. This lawsuit from the attorney general’s office, therefore, remains the primary legal challenge.
The ruling resolves the primary claim in James’ lawsuit, but six additional claims are yet to be decided during a non-jury trial scheduled to begin on October 2. In this trial, James seeks $250 million in penalties and a ban on Trump conducting business in New York. Trump’s legal team had previously attempted to have the case dismissed, but those arguments were rejected by the judge.
The lawsuit, filed a year ago, alleges that Trump and his company routinely inflated the values of assets like skyscrapers, golf courses, and his Mar-a-Lago estate in Florida. Some of the claims included Trump’s assertion that his Manhattan Trump Tower apartment was nearly three times its actual size and that Mar-a-Lago was worth over ten times a more reasonable estimate.
While this lawsuit does not carry the possibility of prison time, Trump faces multiple other legal challenges as he contemplates a return to politics in 2024. In recent months, he has been indicted four times, facing charges ranging from attempting to overturn the 2020 election results to tax fraud related to executive perks within his company.
James’ investigation into Trump’s business practices commenced in 2019 after testimony from Trump’s former personal lawyer, Michael Cohen, indicated that Trump had inflated his wealth on financial statements provided to Deutsche Bank while seeking financing for the NFL’s Buffalo Bills. Beyond this lawsuit, James previously sued Trump over his charitable foundation, resulting in a $2 million fine and the foundation’s closure.
