Donald Trump found liable for fraud in New York civil case


NEW YORK, Sept 26 (Reuters) – A New York judge found that Donald Trump and his family business fraudulently inflated the value of his properties and other assets, a major defeat for the former U.S. president that could hurt his business. capacity may be seriously affected. State.

The sharp ruling by Justice Arthur Angorone of New York state court in Manhattan will make it easier for state Attorney General Letitia James to determine damages in a trial scheduled for Oct. 2.

Angoron also ordered the revocation of the certificates that allowed some of Trump’s businesses, including the Trump Organization, to operate in New York, and ordered the appointment of a receiver to manage the dissolution of the businesses.

The judge explained how Trump, his adult sons Donald Jr. and Eric, the Trump Organization, and other defendants evaluated and inflated Trump’s net worth to suit their business needs.

“That’s a fantasy world, not the real world,” Angoron wrote.

The judge also sanctioned the defendants’ lawyers for making “absurd” legal arguments and promoting “obstinate” conduct of their clients.

Trump and other defendants have argued that he never committed fraud, and that the challenged transactions were profitable. They plan to appeal Angoron’s decision.

“Today’s outrageous decision is completely at odds with the facts and the governing law,” Trump’s attorney Christopher Keese said in a statement. “President Trump and his family will seek all available appellate remedies to remedy this miscarriage of justice.”

James said he looks forward to presenting the rest of his case at trial.

“This is a devastating decision,” said Bill Black, a distinguished scholar of financial regulation at the University of Minnesota Law School. He said that revoking the business certificate could affect Trump’s ability to make money.

“If the decision is upheld, it would eliminate LLCs that actually own large amounts of assets,” Black said, referring to limited liability companies.

Trump is seeking the Republican presidential nomination for 2024 and has maintained a strong lead in the race despite facing criminal charges in several cases.

In a post on his Truth social platform, Trump called “ridiculous and untrue” allegations that he committed fraud, and blasted Angoron as a “deranged” judge who was doing the bidding of James, a Democrat.

“This is Democrat political lawfare and a witch hunt of this scale never seen before,” Trump wrote. “If they can do this to me, they can do this to you!”

Trump has repeatedly said, without any evidence, that the allegations against him are a “witch hunt.”

Not ‘immaterial’

James sued Trump in September 2022, accusing him, his three adult children, and the Trump Organization of lying for a decade about asset values ​​and his net worth and defrauding banks and insurers into offering better terms. Was accused of.

Engoron said James presented “conclusive evidence” that Trump had overstated his net worth by between $812 million and $2.2 billion.

“Even in the world of high finance, this court cannot support a motion that treats misrepresentations of at least $812 million as ‘immaterial,'” he wrote.

The judge said Trump’s greater valuation includes his Mar-a-Lago estate in Florida, his penthouse apartment in Manhattan’s Trump Tower and various office buildings and golf courses.

He took particular issue with Trump’s claim that the penthouse was 30,000 square feet (2,787 square metres), nearly three times its actual size, resulting in an overvaluation of more than $207 million.

“The discrepancy of this order of magnitude by a real estate developer shaping his decades-old living space can only be considered fraud,” Angoron wrote.

The judge said Trump also overvalued Mar-a-Lago, estimating it was worth $612.1 million, although an appraiser said its market value was no more than $27.6 million.

Angoron rebuked Trump for offering defenses in “completely baseless” statements, including that there is nothing wrong if the value of properties increases later in a year.

“He also appears to have said that the numbers cannot be inflated because he could find ‘a buyer from Saudi Arabia’ who would pay any price,” the judge wrote.

series of litigation

Angoron’s decision comes three months after a state appeals court ruled that some of James’ claims were too old because the statute of limitations expired in July 2014 or February 2016.

Angoron rejected Trump’s argument that the ruling essentially overturned James’ lawsuit, which James said reflected a series of “persistent mistakes” that he failed to prove at trial. Can do.

The appeals court dismissed one defendant, Trump’s daughter Ivanka, from the case.

Trump is also facing many other lawsuits.

He has pleaded not guilty to charges in four indictments accusing him of trying to overturn his 2020 election defeat by Democrat Joe Biden, hoarding classified materials and covering up hush money payments to a porn star Has gone.

Trump also faces a civil lawsuit in January for damages for defaming author E. Jean Carroll, who claimed he raped her. He has denied any wrongdoing.

Angoron’s ruling does not automatically mean James’ fraud case will go to trial next Monday.

Trump has sued to delay the trial and accuses Angoron and James of ignoring an appeals court order to narrow the case.

He and other defendants have said this made it impossible to prepare for trial because they did not know what claims they would have to defend against.

The appeals court is expected to rule on the delay request this week.

Reporting by Karen Freifeld, Jack Queen and Jonathan Stempel in New York; Editing by Chris Reese, Deepa Babington and Leslie Adler

Our Standards: The Thomson Reuters Trust Principles.

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