A judge on Tuesday ruled that former President Donald Trump and his company are liable for fraud by misstating the true values of multiple real estate properties for years.
Judge Arthur Engoron also canceled the New York business certificates of Trump, the Trump Organization, and the other defendants, including two of his sons, in a lawsuit by the state Attorney General’s Office.
The judge said he will appoint an independent receiver to manage the dissolution of the corporations whose business certificates he canceled.
It is not clear whether Engoron’s decision means the Trump Organization and related entities will have to completely cease doing business in New York or whether the companies can be legally reconstituted later.
A spokeswoman for Attorney General Letitia James declined to comment on that question. A lawyer for Trump did not immediately respond to a request for comment on that question, but said she will appeal the entire decision.
Engoron, in granting partial summary judgment to James in the case, found that Trump made false and misleading valuations for multiple real estate assets in statements to insurers and banks for years as he sought more favorable terms on insurance coverage and loans.
Because of those misstatements, Trump also inflated his true net worth in annual financial statements by billions of dollars, according to the decision.
“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,” Engoron wrote.
“That is a fantasy world, not the real world.”
The defendants in the case include Trump, his sons Donald Trump Jr. and Eric Trump, former Trump Organization Chief Financial Officer Allen Weisselberg, company executive Jeff McConney, and corporate entities.
Engoron also ordered sanctions of $7,500 for five attorneys who represented the Trump defendants for making frivolous and previously rejected arguments in court filings.
Trump is the front-runner for the 2024 Republican presidential nomination.
Separately he faces a total of 91 felony counts in four criminal cases, three of which are scheduled to head to trial at the peak of the primary election cycle.
He has pleaded not guilty to all of the charges.
Engoron wrote that James’ office in its civil fraud suit “has prevailed on liability on its first cause of action … as against all defendants.”
The judge added that if liability for fraud is established under New York law, that statute allows the attorney general to obtain an order enjoining defendants from continuing to do business or “any fraudulent or illegal acts.”
Even after Engoron appointed an independent financial monitor for the Trump Organization last year, “defendants have continued to disseminate false and misleading information while conducting business,” the judge wrote.
“This ongoing flouting of this Court’s prior order, combined with the persistent nature of the false [statements of financial condition] year after year, have demonstrated the necessity of canceling the [defendants’ business] certificates … as the statute provides,” the judge wrote.
Engoron’s ruling, which also dismissed Trump’s request to dismiss the case, did not settle six other issues in dispute in the case.
Those issues will be addressed at a nonjury trial due to begin Monday.
James is seeking $250 million in damages in the case and wants Trump and his two adult sons barred from doing business in the state.
The 35-page ruling details how Trump fraudulently valued his Mar-a-Lago club in Palm Beach, Florida, once by more than 2,000%, Trump Park Avenue and 40 Wall Street in New York City, his Seven Springs property in Westchester County, New York, and his golf course in Aberdeen, Scotland.
“Time and time again, the Court is not comparing one appraisal to another; it is comparing an independent professional appraisal to a pie-in-the-sky dream of concocted potential,” Engoron wrote.
After noting that Trump submitted statements falsely claiming that the Trump Tower apartment in which he resided for decades was nearly three times its actual size, and was worth a whopping $327 million, the judge wrote, “a discrepancy of this order of magnitude, by a real estate developer sizing up his own living space of decades, can only be considered fraud.”
“The documents here clearly contain fraudulent valuations that defendants used in business,” Engoron wrote.
“Defendants respond that: the documents do not say what they say; that there is no such thing as ‘objective’ value; and that, essentially, the Court should not believe its own lying eyes,” the judge noted.
Trump’s attorney Alina Habba in a statement said, “It’s important to remember that the Trump Organization is an American success story and the fact that a judge without trial would say there is no question of fact and issue a decision like this in summary judgement is concerning and we will appeal.”
“Mr Trump is due his day in court. If the AG can bring a cause of action against any entity because they disagree with their values and claim Mar-a-Lago is worth 18-20 million dollars is ludicrous,” Habba said.
Trump responded to Engoron’s ruling by reposting a statement on social media attacking James and the judge, while doubling down on his claims of having a much higher net worth than what was displayed on the financial statements at the center of the fraud case.
“It is very unfair, and I call for help from the highest Courts in New York State, or the Federal System, to intercede,” Trump wrote in a post on his Truth Social site.