In a significant development just days before a civil fraud trial was set to commence, a state judge in New York has found former President Donald Trump and his company liable for fraud. The case revolves around allegations that Trump and his co-defendants inflated his net worth to deceive banks and insurers.
Conclusive Evidence of Overvaluation
Judge Arthur Engoron ruled in favor of New York Attorney General Tish James, stating that her office had presented conclusive evidence that Trump and his co-defendants overvalued their assets by a staggering $812 million to $2.2 billion between 2014 and 2021. The judge emphasized that even in the realm of high finance, such a misstatement cannot be considered “immaterial.”
Cancellation of Business Certificates
As part of the ruling, Judge Engoron canceled the business certificates of all the defendants, which include the Trump Organization and numerous associated LLCs, along with entities “controlled or beneficially owned by” Trump, his adult sons, former CFO Allen Weisselberg, and company executive Jeffrey McConney. Trump and the other defendants have been ordered to provide the names of potential independent receivers within 10 days to manage the dissolution of the canceled LLCs.
A Blow to Trump’s Image
This ruling represents a significant blow to Trump, who has long touted his personal and professional successes. The lawsuit alleges that Trump and his co-defendants created over 200 misleading evaluations of the company’s finances and seeks $250 million in damages, as well as a lifetime bar on the Trump family from serving as officers or directors in New York companies.
Next Steps and Reaction
While the ruling is a setback for Trump, it doesn’t resolve all the claims in James’ lawsuit. Some factual disputes remain, requiring further trial proceedings. Additionally, the judge granted the attorney general’s request to sanction Trump’s lawyers, imposing a $7,500 penalty on each of them.
In response, Attorney General James expressed satisfaction with the ruling and said the case would proceed to trial. Trump’s attorney, Chris Kise, criticized the ruling as disconnected from the facts and vowed to appeal.v
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