A New York judge has found Donald Trump and his adult children responsible for fraud and canceled the Trump Organization’s business certification, saying the Trumps provided false financial statements for about a decade.
Judge Arthur Engoron’s ruling came days before the civil case involving the New York attorney general’s office and the former president was set to go to trial.
Engoron granted Attorney General Letitia James’ motion for summary judgment, determining that Trump, his children and others “are legally responsible for persistent violations” of New York state law. She found that financial statements the Trumps provided to lenders and insurers for about a decade were false and said they repeatedly committed fraud.
The decision is a blow to Trump and a complete rejection of his arguments that he did not inflate the values of his golf courses, hotels and homes at Mar-a-Lago and Seven Springs in financial statements that were repeatedly used in business.
“Today, a judge ruled in our favor and determined that Donald Trump and the Trump Organization engaged in years of financial fraud,” James said in a statement Tuesday night. “We look forward to presenting the rest of our case at trial.”
The attorney general has sought $250 million in damages, a ban on the Trumps from serving as directors of a company in New York and preventing the company from doing business for five years.
The judge canceled the business certifications of the Trump entities that are defendants in the case, including the Trump Organization, and said a receiver will be appointed to “manage the dissolution” of the corporate entities. There are two New York properties that are part of the lawsuit, the commercial tower at 40 Wall Street and the Trump family complex in Seven Springs.
However, the full scope of his decision is still unclear.
Questions remain about how the trustee would dissolve the properties, whether the ruling would affect properties located outside New York state, including Mar-a-Lago, and whether the Trumps could transfer New York-based assets to a new company located outside of New York State. state.
Among other things, Trump is accused of inflating the value of his triplex apartment in Trump Tower by three times its size, resulting in an overvaluation of between $114 million and $207 million, Engoron wrote.
“A discrepancy from this order of magnification, by a real estate developer evaluating his own living space for decades, can only be considered fraud,” Engoron wrote.
“What exacerbates the defendants’ outrageous conduct is their continued reliance on false arguments, both in documents and oral arguments,” Engoron wrote. “In the world of the defendants: rent-regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate into air; a disclaimer by one party that attributes responsibility to another party exonerates the other party’s lies…”
The judge added: “That is a fantasy world, not the real world.”
The state Supreme Court justice compared the Trumps’ legal defense of their fraudulent financial statements to a line by Chico Marx in the comedy “Duck Soup”: “Well, who are you going to believe, me or your own eyes?” ?”
Trump condemned the ruling in a statement, accusing Engoron of “doing bidding” from James as the former president campaigns to return to the White House.
“It is a large company that has been slandered and defamed by this politically motivated witch hunt. It is very unfair and I ask for help from the highest Courts of the State of New York, or the Federal System, to intercede. THIS IS NOT AMERICA! Trump continued.
Trump’s attorney, Christopher Kise, called the ruling “completely out of touch with the facts and current law.”
He added: “While the full impact of the decision is still unclear, what is clear is that President Trump and his family will pursue every appeal available to rectify this miscarriage of justice.”
In a statement on X, the platform formerly known as Twitter, Eric Trump saying: “Today I lost all faith in the New York legal system. Never before have I seen so much hatred towards one person from a judge – a coordinated effort with the Attorney General to destroy a man’s life, company and achievements. We have run an exceptional company: we have never defaulted on a loan, we have provided banks with hundreds of millions of dollars, and we have developed some of the most iconic assets in the world. However, today the persecution of our family continues…”
James has alleged that Trump, three of his children, his companies and his executives defrauded lenders, insurers and other entities. (An appeals court dismissed Trump’s eldest daughter, Ivanka, as a co-defendant in the case in June.)
In the lawsuit, James claims that Trump derived a “substantial” financial benefit from misreporting his financial statements, including $150 million in the form of favorable interest rates he obtained from banks that the attorney general says his team deception.
In the order, the judge rejected Trump’s testimony in which the former president said the financial statements were not fraudulent because they contained disclaimers. Trump said the statements contained a “worthless clause” warning lenders and others that they should not be trusted.
On Tuesday, the judge said that “defendants’ reliance on these ‘useless’ disclaimers is worthless.”
The ruling means the Attorney General’s Office won its first claim and will receive a certain amount of disgorgement to be determined at trial. The case will still proceed to trial, but the attorney general’s office will not need to prove the financial statements are false as they seek to hold him and his children liable for insurance fraud and false business records.
The start date of the trial remains in limbo.
Earlier this month, Trump filed a petition with the state appeals court to force Engoron to implement a June appeals court decision that said certain claims may be moot because they are not time-barred. The appeals court let Engoron decide.
An appeals court judge halted the start of the trial, scheduled for Monday, to allow a larger panel of appeals judges to weigh in. A decision on that issue is expected to be made this week.
CORRECTION: An earlier version of this story misstated the number of claims the judge ruled on Tuesday. He ruled on a claim from the attorney general’s office. This story has also been updated with additional news.