A judge ruled on Tuesday that former President Donald Trump and his company are responsible for fraud in a lawsuit filed by the New York Attorney General’s Office. Judge Arthur Engoron delivered a scathing decision, canceling Trump’s and the other defendants’ business certificates in the Manhattan Supreme Court lawsuit.
CNBC has reached out to Attorney General Letitia James’ spokeswoman to clarify if the ruling prohibits Trump and the other defendants from conducting business in New York, as implied in the decision.
In his ruling in favor of James, Engoron found that Trump had provided false and misleading valuations for multiple real estate assets to insurers and banks over several years. As a result, Trump inflated his true net worth by billions of dollars in annual financial statements.
The judge ordered the defendants to recommend three potential independent receivers within 10 days to manage the dissolution of the corporations whose business certificates have been canceled.
The defendants named in the lawsuit include Trump, his sons Donald Trump Jr. and Eric Trump, former Trump Organization CFO Allen Weisselberg, company executive Jeff McConney, and various corporate entities.
In addition, Engoron sanctioned a fine of $7,500 for each attorney representing the Trump defendants who made frivolous and previously rejected arguments in court filings.
Engoron stated that James’ office had “prevailed on liability on its first cause of action … as against all defendants.” He also noted that if fraud liability is established under New York law, the attorney general can obtain an order preventing the defendants from engaging in further fraudulent or illegal acts.
The judge emphasized that despite his appointment of an independent financial monitor for the Trump Organization last year, the defendants have continued to spread false and misleading information while conducting business.
Engoron’s ruling not only dismissed Trump’s request for a summary judgment in his favor but also left six other disputed issues unresolved. These issues will be addressed in an upcoming trial starting on Monday.
James is seeking $250 million in damages in this case.
The 35-page ruling provides detailed evidence of how Trump fraudulently valued his properties, including Mar-a-Lago in Florida, Trump Park Avenue and 40 Wall Street in New York City, Seven Springs property in Westchester County, New York, and his golf course in Aberdeen, Scotland.
Engoron expressed that the court was not comparing one appraisal to another, but rather comparing an independent professional appraisal to an unrealistic concoction of potential value. He highlighted Trump’s false statements about the size of his Trump Tower apartment, which was nearly three times larger than its actual size, as an example of fraudulent behavior.
“The documents clearly contain fraudulent valuations that defendants used in their business,” Engoron wrote.
The judge also noted that the defendants claimed that the documents did not reflect their contents, that there was no “objective” value, and essentially argued against the evidence presented.
Trump’s attorney, Alina Habba, has not yet responded to a request for comment.
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