Judge: Trump Defrauded Banks, Insurers 09/27 06:14

Judge: Trump Defrauded Banks, Insurers 09/27 06:14

   A judge ruled Tuesday that Donald Trump committed fraud for years while 
building the real estate empire that catapulted him to fame and the White 
House, and he ordered some of the former president's companies removed from his 
control and dissolved.

   NEW YORK (AP) -- A judge ruled Tuesday that Donald Trump committed fraud for 
years while building the real estate empire that catapulted him to fame and the 
White House, and he ordered some of the former president's companies removed 
from his control and dissolved.

   Judge Arthur Engoron, ruling in a civil lawsuit brought by New York Attorney 
General Letitia James, found that Trump and his company deceived banks, 
insurers and others by massively overvaluing his assets and exaggerating his 
net worth on paperwork used in making deals and securing loans.

   Engoron ordered that some of Trump's business licenses be rescinded as 
punishment, making it difficult or impossible for them to do business in New 
York, and said he would continue to have an independent monitor oversee Trump 
Organization operations.

   If not successfully appealed, the order would strip Trump of his authority 
to make strategic and financial decisions over some of his key properties in 
the state.

   Trump, in a series of statements, railed against the decision, calling it 
"un-American" and part of an ongoing plot to damage his campaign to return to 
the White House.

   "My Civil rights have been violated, and some Appellate Court, whether 
federal or state, must reverse this horrible, un-American decision," he wrote 
on his Truth Social site. He insisted his company had "done a magnificent job 
for New York State" and "done business perfectly," calling it "A very sad Day 
for the New York State System of Justice!"

   Trump's lawyer, Christopher Kise, said they would appeal, calling the 
decision "completely disconnected from the facts and governing law."

   Engoron's ruling, days before the start of a non-jury trial in James' 
lawsuit, is the strongest repudiation yet of Trump's carefully coiffed image as 
a wealthy and shrewd real estate mogul turned political powerhouse.

   Beyond mere bragging about his riches, Trump, his company and key executives 
repeatedly lied about them on his annual financial statements, reaping rewards 
such as favorable loan terms and lower insurance costs, Engoron found.

   Those tactics crossed a line and violated the law, the judge said, rejecting 
Trump's contention 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 
wrote in his 35-page ruling. "That is a fantasy world, not the real world."

   Manhattan prosecutors had looked into bringing criminal charges over the 
same conduct but declined to do so, leaving James to sue Trump and seek 
penalties that aim to disrupt his and his family's ability to do business.

   Engoron's ruling, in a phase of the case known as summary judgment, resolves 
the key claim in James' lawsuit, but several others remain. He'll decide on 
those claims and James' request for $250 million in penalties at a trial 
starting Oct. 2. Trump's lawyers have asked an appeals court for a delay.

   "Today, a judge ruled in our favor and found that Donald Trump and the Trump 
Organization engaged in years of financial fraud," James said in a statement. 
"We look forward to presenting the rest of our case at trial."

   Trump's lawyers, in their own summary judgment bid, had asked the judge to 
throw out the case, arguing that there wasn't any evidence the public was 
harmed by Trump's actions. They also argued that many of the allegations in the 
lawsuit were barred by the statute of limitations.

   Engoron, noting that he had rejected those arguments earlier in the case, 
equated them to the plot of the film "Groundhog Day." He fined five defense 
lawyers $7,500 each as punishment for "engaging in repetitive, frivolous" 
arguments, but denied James' request to sanction Trump and other defendants.

   James, a Democrat, sued Trump and the Trump Organization a year ago, 
accusing them of routinely inflating the value of assets like skyscrapers, golf 
courses and his Mar-a-Lago estate in Florida, padding his bottom line by 
billions.

   Engoron found that Trump consistently overvalued Mar-a-Lago, inflating its 
value on one financial statement by as much as 2,300%. The judge also rebuked 
Trump for lying about the size of his Manhattan apartment. Trump claimed his 
three-story Trump Tower penthouse was nearly three times its actual size, 
valuing it at $327 million.

   "A discrepancy of this order of magnitude, by a real estate developer sizing 
up his own living space of decades, can only be considered fraud," Engoron 
wrote.

   On X in the wake of the ruling, Eric Trump insisted his father's claims 
about Mar-a-Lago were correct, writing that the Palm Beach estate is 
"speculated to be worth well over a billion dollars making it arguably the most 
valuable residential property in the country." He called the ruling and the 
lawsuit "an attempt to destroy my father and kick him out of New York."

   Under the ruling, limited liability companies that control some of Trump's 
key properties, such as 40 Wall Street, will be dissolved and authority over 
how to run them handed over to a receiver. Trump would lose his authority over 
whom to hire or fire, whom to rent office space to, and other key decisions.

   "The decision seeks to nationalize one of the most successful corporate 
empires in the United States and seize control of private property all while 
acknowledging there is zero evidence of any default, breach, late payment or 
any complaint of harm," Kise said after the decision.

   James' lawsuit is one of several legal headaches for Trump, the Republican 
front-runner in next year's election. He has been indicted four times in the 
last six months -- accused in Georgia and Washington, D.C., of plotting to 
overturn his 2020 election loss, in Florida of hoarding classified documents, 
and in Manhattan of falsifying business records related to hush money paid on 
his behalf.

   The Trump Organization was convicted of tax fraud last year in an unrelated 
criminal case for helping executives dodge taxes on perks such as apartments 
and cars. The company was fined $1.6 million. One executive, Trump's longtime 
finance chief Allen Weisselberg, pleaded guilty and served five months in jail.

   James' office previously sued Trump for misusing his charitable foundation 
to further his political and business interests. Trump was ordered to give $2 
million to charity as a fine while his own charity, the Trump Foundation, was 
shut down.