In a surprising ruling, Justice Arthur F. Engoron, a New York judge, has determined that former President Donald J. Trump committed fraud by inflating the value of his assets. As a result, the judge has stripped Trump of control over some of his prominent New York properties. This decision is a significant victory for Attorney General Letitia James, who has filed a lawsuit against Trump, claiming that he fraudulently obtained favorable terms on loans and insurance deals by exaggerating the value of his properties. While a trial will determine the specific penalty, Justice Engoron’s ruling has already granted one of the major punishments sought by James: the cancellation of business certificates that allow Trump’s New York properties to operate. This could have serious consequences for the Trump family business, potentially resulting in the loss of control over properties such as Trump Tower and Trump’s golf club in Westchester.
The judge’s decision will also unwind the Trump Organization L.L.C., which serves as the brand name for Trump’s sprawling company. However, it is important to note that the ruling does not dissolve the entire company itself, as it consists of hundreds of entities. Nevertheless, if this decision is not overturned by an appeals court, it could effectively shut down a significant entity within the Trump Organization, ultimately impacting the hundreds of people employed by the company in New York. Trump’s lawyer, Christopher M. Kise, has expressed his intention to appeal the decision, contending that it is “outrageous” and disconnected from the facts and governing law. Trump himself has criticized Justice Engoron as a Democrat and called him “deranged.”
While this civil case by Attorney General Letitia James might have been overshadowed by the former president’s four unrelated criminal indictments, the judge’s ruling represents the first punishment resulting from a government investigation into Trump. Justice Engoron’s decision narrows the issues to be addressed at trial, affirming the validity of the core of James’s case. The judge strongly criticized Trump’s defenses, arguing that the former president and his company disregarded reality for their own business interests. He also imposed sanctions on Trump’s lawyers for reiterating arguments that he had previously rejected. In addition, Justice Engoron referred to the case’s potential impact on Trump’s personal brand and his longstanding habit of promoting the value of his buildings. Ultimately, the ruling provides an opportunity for Trump to appeal, delaying the trial or potentially invalidating the case, but that will depend on the outcome of his separate lawsuit against Justice Engoron.