In a recent ruling, a New York judge determined that Donald Trump and his company, the Trump Organization, “repeatedly” violated state fraud law. The ruling came in response to a request from New York Attorney General Letitia James, who has filed a $250 million civil lawsuit against Trump and his sons, Donald Jr. and Eric. The judge agreed with James’ office that Trump and his company provided banks with fraudulent financial statements that misrepresented his wealth by up to $3.6 billion. As a result, Judge Arthur Engoron ordered the cancellation of the defendants’ New York business certificates and mandated the recommendation of independent receivers to manage the dissolution of the canceled LLCs.
The lawsuit, filed in September 2022, accuses Trump and his company of extensive fraud over more than a decade while seeking loans from banks. Alongside the monetary damages, James’ office is seeking several sanctions that would severely restrict the Trump Organization’s ability to conduct business in New York. Both sides had requested summary judgments from Engoron, with James’ office seeking a ruling that certain facts were undisputed, while Trump’s legal team sought to have the case dismissed. Engoron rejected the latter motion, paving the way for the trial to focus on allegations of falsification of business records, issuing false financial statements, insurance fraud, and conspiracy. The Trumps have consistently denied any wrongdoing and claim that they are being targeted for political reasons.
In response to the judge’s ruling, a legal spokesperson for Trump’s Save America PAC called it “fundamentally flawed” and announced plans for an immediate appeal. The Trump Organization has argued that the valuations in question reflect Trump’s “investment genius,” pointing to the Trump National Doral Miami golf club as an example. The club was purchased for $150 million in 2012 and is now claimed to be worth “well more than $1 billion.” However, Engoron seemed skeptical of this argument during the hearing, emphasizing that false statements used in business are prohibited. In addition to the ruling on the fraud claims, Engoron also ruled in favor of the New York attorney general’s motion for sanctions against Trump’s legal team, fining five attorneys a total of $37,500 for repeatedly making arguments that had already been rejected by the court.