A judge on Tuesday ruled that Donald Trump and his company are liable for fraud by misrepresenting the true values of multiple real estate properties for years and thereby overstating greatly overstated the former president’s net worth by billions of dollars.
Judge Arthur Engoron in his bombshell decision also canceled the New York business certificates of Trump, the Trump Organization, and the other defendants, including two of his children, in a case of the state Attorney General’s Office.
The judge said he would appoint an independent receiver to manage the dissolution of the corporate entities whose business certificates he canceled.
It is unclear whether Engoron’s decision means the Trump Organization and related entities will have to completely stop doing business in New York, or whether the companies can be legally re-established later.
A spokeswoman for Attorney General Letitia James declined to comment on that question.
But Trump’s attorney Chris Kise, who called the decision “outrageous,” said it was “intended to nationalize one of the most successful corporate empires in the United States and take control of private property while acknowledging that there is no evidence of any default, breach, late payment or any claim of damages.”
“While the full impact of the decision remains unclear, what is clear is that President Trump and his family will seek all available legal remedies to correct this miscarriage of justice,” Kise said.
Engoron’s decision, which also dismissed Trump’s request to dismiss the case, did not address six other claims at issue in the case where the defendants include him, the company and his children Donald Trump Jr. and Eric Trump, as well as former Trump Organization Chief Financial Officer Allen Weisselberg, company executive Jeff McConney.
The remaining claims will be addressed in a nonjury trial that begins Monday.
James is seeking $250 million in damages in the lawsuit and wants Trump and his two adult children barred from doing business in the state.
Engoron, in granting partial summary judgment to James on the fraud claim, found that Trump made false and misleading valuations for numerous real estate assets in statements to insurers and banks over multiple year as he sought more favorable terms on insurance coverage and loans.
Because of those false statements, Trump also inflated his true net worth on annual financial statements by billions of dollars, according to the ruling.
“In the defendants’ world: rent regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate; a disclaimer of a party that holds the other party accountable is exonerating the other party’s lies,” Engoron wrote.
“That’s a fantasy world, not the real world.”
Engoron also ordered penalties of $7,500 for five lawyers who represented Trump’s accusers for making frivolous and previously rejected arguments in court filings. Kise was among those fined by the judge.
“Today, a judge ruled against us and found that Donald Trump and the Trump Organization engaged in years of financial fraud,” James wrote in a post on the X social media site.
“We look forward to presenting the rest of our case at trial,” James added.
Trump, the front-runner for the 2024 Republican presidential nomination, separately faces a total of 91 felony charges in four criminal cases. Two of those cases are related to efforts to reverse his 2020 re-election loss. Another case involves his keeping classified government documents at his Mar-a-Lago club in Florida, a property -property mentioned in Engoron’s decision on Tuesday.
In the fourth criminal case, Trump is charged with falsifying business records related to a 2016 cash payment to porn star Stormy Daniels.
He pleaded not guilty to all charges.
Engoron wrote in his ruling that James’ office in its civil fraud case “prevailed on liability in its first cause of action … as against all defendants.”
The judge added that if liability for fraud is established under New York law, that law allows the attorney general to obtain an injunction enjoining the defendants from continuing to do business or “any fraudulent or illegal task.”
Even after Engoron appointed an independent financial monitor for the Trump Organization last year, “the defendants continued to spread false and misleading information while conducting business,” the judge wrote.
“This continued disregard of this Court’s prior order, coupled with the continued nature of the wrong [statements of financial condition] year after year, has shown the need to cancel the [defendants’ business] certificates … as provided by law,” the judge wrote.
Engoron’s 35-page ruling details how Trump fraudulently valued his Mar-a-Lago club in Palm Beach, sometimes 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.
“Over and over again, the Court does not compare one assessment to another; it compares an independent professional assessment to a pie-in-the-sky dream of resource potential,” Engoron wrote.
After noting that Trump had submitted statements falsely claiming that the Trump Tower apartment where he lived for decades was nearly three times its actual size, and worth a whopping $327 million, the judge wrote, ” a difference of this order of magnitude, by a real estate developer measuring his own living space for decades, can only be considered fraud.”
“The documents herein clearly contain fraudulent valuations used by the defendants in the business,” Engoron wrote.
“The defendants respond that: the documents do not say what they say; that there is no such thing as ‘objective’ value; and that, in essence, the Court should not believe its own lying eyes, ” said the judge.
Kise, the Trump attorney, said Engoron’s “outrageous decision is completely disconnected from the facts and the governing law.’
“The Court completely disregarded the Appellate Division’s order and basic legal, accounting and business principles,” Kise said. “Without even holding a trial, the Court substituted its own judgment for nationally recognized experts from the NYU Stern School of Business and beyond. More importantly, the Court ignored the views of those actually involved in the loan transaction that testified that there was nothing. deceitful, no fraud, and all transactions were highly profitable.”
Another Trump lawyer, Alina Habba, in a statement said, “It is important to remember that the Trump Organization is an American success story and the fact that a judge without a trial will say that there is no question of fact and issue of a decision such as this on summary judgment is relevant.”
Habba who is among the lawyers authorized by Engoron.
Trump responded to Engoron’s decision by reposting a statement on social media attacking James and the judge, while doubling down on his claims of having a higher net worth than shown in financials statement in the midst of a fraud case.
“This is very unfair, and I am calling for help from the highest Court in New York State, or the Federal System, to intervene,” Trump wrote in a post on his Truth Social site.
In a tweet on Tuesday, Eric Trump, who runs the Trump Organization with Donald Trump Jr., wrote, “In an attempt to destroy my father and kick him out of New York, a Judge ruled that Mar-a- Lago, in Palm Beach Florida, is only worth an estimated ‘$18 Million dollars’ “
“Mar-a-Lago is predictably worth [well] over a billion dollars making it arguably the most valuable residential property in the country. Everything is so corrupt and coordinated,” Eric wrote.