Wednesday, 24 April, 2024

Judge Rules Trump Defrauded Banks and Investors


Reading Time: 4 minutes

In a decisive ruling on Tuesday, Judge Arthur Engoron declared that Donald Trump engaged in fraudulent activities over an extended period while constructing his real estate empire, ultimately propelling him to both fame and the White House.

In a civil lawsuit brought forth by New York’s attorney general, Engoron determined that the former president and his corporation misled banks, insurers, and other stakeholders by significantly inflating the value of his assets and embellishing his net worth on documents pivotal to negotiations and financing agreements.

As a punitive measure, Engoron ordered the revocation of certain business licenses held by Trump, thereby creating substantial obstacles or rendering it near impossible for them to operate within New York. Additionally, he announced the appointment of an independent overseer to monitor the Trump Organization’s activities.

A spokesperson for Trump did not immediately respond to requests for comment on the verdict. Trump has consistently maintained his innocence.

This significant decision, arriving just days prior to the commencement of a trial overseen by Attorney General Letitia James, constitutes a resounding repudiation of Trump’s carefully curated image as a prosperous and astute real estate magnate turned political juggernaut.

Beyond mere boasts about his wealth, the judge affirmed that Trump, along with his company and key executives, repeatedly provided false information on his annual financial reports, reaping benefits such as favorable loan terms and reduced insurance premiums.

Engoron was emphatic in dismissing Trump’s assertion that a disclaimer on the financial statements absolved him of any wrongdoing.

“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 articulated in his 35-page decision. “That is a fantasy world, not the real world.”

Although Manhattan prosecutors explored the possibility of pursuing a criminal case for the same behavior, they ultimately opted not to proceed, leaving James to pursue legal action against Trump, seeking penalties that could disrupt his and his family’s business activities in the state.

Engoron’s ruling, a pivotal stage in James’ lawsuit known as summary judgment, settles the primary allegation in the case. However, six additional claims remain pending.

Engoron is scheduled to preside over a non-jury trial starting on October 2nd to address these outstanding claims and any potential sanctions. James is pursuing $250 million in penalties and a prohibition on Trump conducting business in New York, his home state. The proceedings may extend into December, as stated by Engoron.

Trump’s legal team had petitioned for the dismissal of the case, a request that was denied by the judge. They argued that James lacked the legal authority to file the lawsuit, as there was no evidence of public harm resulting from Trump’s actions. They also contended that many of the claims in the lawsuit were time-barred.

Engoron, reiterating his prior rejection of these arguments, likened them to the time-loop concept in the film ‘Groundhog Day.’

James, a member of the Democratic party, filed the lawsuit against Trump and the Trump Organization a year prior, alleging a consistent pattern of deceit that she coined as “the art of the steal,” a play on the title of Trump’s 1987 business memoir, “The Art of the Deal.”

The suit asserted that Trump and his company habitually inflated the value of assets like skyscrapers, golf courses, and his Mar-a-Lago estate in Florida, thereby bolstering his reported earnings by billions.

Among the claims was Trump’s assertion that his Trump Tower apartment in Manhattan—a three-story penthouse adorned with gold-plated fixtures—was nearly three times its actual size, and he appraised the property at $327 million. James noted that no apartment in New York City has ever sold for anywhere near that amount.

Trump valued Mar-a-Lago as high as $739 million—more than ten times a more reasonable estimate of its value. However, James contended that deed terms prohibit the property from being developed for residential use, upon which Trump’s valuation was based.

Trump has steadfastly maintained his innocence, asserting in sworn testimony that it was inconsequential what he disclosed on his financial statements due to the presence of a disclaimer cautioning against reliance. During the April deposition, he told James, “You don’t have a case, and you should drop this case.”

Engoron rejected this argument when the defense initially sought to have the case dismissed, asserting that the disclaimer on the financial statements “makes abundantly clear that Mr. Trump was fully responsible for the information contained within” them. He further emphasized that allowing blanket disclaimers to shield deceivers from accountability would fundamentally undermine their crucial role in the real world.

While James’ lawsuit does not carry the potential for incarceration, it could complicate Trump’s ability to engage in real estate transactions. Furthermore, it may tarnish his legacy as a developer.

James has urged Engoron to prohibit Trump and his three eldest children from ever again leading a New York-based company. She also seeks to bar Trump and the Trump Organization from participating in commercial real estate acquisitions for five years, among other sanctions. The $250 million in penalties she pursues is the estimated value of benefits derived from the alleged deception.

James, who ran for office as a Trump critic and watchdog, initiated an investigation into his business practices in March 2019, following testimony by his former personal attorney Michael Cohen, who claimed that Trump had exaggerated his wealth on financial statements submitted to Deutsche Bank while seeking financing to acquire the NFL’s Buffalo Bills.

James’ office previously sued Trump for the improper use of his charitable foundation to advance his political and business interests. Trump was instructed to pay $2 million to a variety of charities as a penalty, and the foundation, known as the Trump Foundation, was shuttered.

For more great business articles click here.  Also, check out our partners — Daily Business Journal and Price of Business.

Related:

0 comments on “Judge Rules Trump Defrauded Banks and Investors

Leave a Reply

Your email address will not be published. Required fields are marked *

VIDEO: This Week’s Best of our Network

GDPR Compliance

DBJ does not collect data on its visitors.

USABR: Nationally Syndicated Radio Distribution

Contact

Contact  articles@usabusinessradio.net
for more information on articles on this site. bmuyco@usabusinessradio.net for all other information.

Kevin Price’s “New Rich” Book Ready for Pre-order for 99 cents!

The Price of Business Visits with Robert Kiyosaki on 20 Years of “Rich Dad Poor Dad”

The author of the best selling finance book of all time celebrates its 20th anniversary in a series of interviews with Kevin Price on the Price of Business.

Adventures in Quora with Kevin Price

Kevin Price, Editor at Large of Daily Business Journal and host of the nationally syndicated Price of Business show writes frequently at Quora about issues ranging from politics to personality types. His favorite answers are also found at USA Business Radio.

#METOO REHAB

The Best in News and Thoughtful Commentary

All the News. All the Time

PMWorld 360

Archives

NONE OF THE OPINIONS IN DAILY BUSINESS JOURNAL SHOULD BE CONSTRUED AS BEING THOSE OF DAILY BUSINESS JOURNAL

For more information regarding content, see the About page.

Recent Comments

    RSS
    Follow by Email
    YouTube
    YouTube
    LinkedIn
    LinkedIn
    Share