A New York state judge ruled that former President Donald Trump and his company are liable for fraud in a lawsuit that was brought by the New York Attorney General’s office.
Judge Arthur Engoron, issuing a ruling Tuesday in a civil lawsuit brought by Attorney General Letitia James, found that the former president and the Trump Organization deceived banks, insurers, and others by allegedly overvaluing his assets and exaggerating his net worth on paperwork used in making deals and securing financing.
The decision, which comes just days before the start of a non-jury trial in the lawsuit, canceled President Trump’s business certificates. Within 10 days, the former president and other defendants must recommend three independent reviewers to manage the dissolution of the corporations, including the Trump Organization.
Judge Engoron said Ms. James, a Democrat, had established liability for false valuations of several properties, including Mar-a-Lago and others, and claimed the former president made comments in a deposition that were “wholly without basis in law or fact.”
“He claims that if the values of the property have gone up in the years since the (financial statements) were submitted, then the numbers were not inflated at that time,” the judge wrote on Tuesday. “He also seems to imply that the numbers cannot be inflated because he could find a ‘buyer from Saudi Arabia’ to pay any price he suggests.”
A trial has been slated for Oct. 2, and could last well into December.
Tuesday’s order also ordered sanctions of $7,500 for each attorney who had represented President Trump and the co-defendants, alleging they made previously rejected and frivolous claims in court documents.
“Defendants’ arguments that the factual record developed in discovery changed the landscape under which standing should be viewed is legally preposterous,” the judge also wrote (pdf). “The best that defendants could muster at oral argument was to contend (incorrectly) that plaintiff cannot sue because the subject transactions were between private entities, and nobody lost money.”
Ms. James sued Trump in September 2022, accusing him and the Trump Organization of lying for a decade about asset values and his net worth to get better terms on bank loans and insurance. She alleged that Trump inflated his net worth by as much as $2.23 billion, and by one measure as much as $3.6 billion, on annual financial statements given to banks and insurers.
The former president and his attorneys, however, have denied wrongdoing in the case. Several days ago, his team said that Ms. James’s office has no case during a hearing before Judge Engoron.
