Trump fraudulently inflated property values, NY judge rules

A New York judge ruled Tuesday that Donald J. Trump repeatedly committed fraud by inflating the value of his assets, and stripped the former president of control over some of his signature New York properties.

Justice Arthur F. Angoron’s decision is a major victory for Attorney General Letitia James in the lawsuit against Mr. Trump, effectively ruling that no trial was needed to determine whether he fraudulently obtained favorable loans and insurance deals. Terms were achieved.

Ms. James has argued that Mr. Trump inflated the value of his assets by $2.2 billion and is seeking a fine of about $250 million in the trial that begins on Monday.

Justice Engoron wrote that the case documents “clearly contain fraudulent valuations that the defendants used in business.”

While the trial will determine the size of the penalty, Justice Angorone’s decision delivered one of the largest punishments that Ms. James had sought: revoking the business certificates that allow some of Mr. Trump’s New York properties to operate. A move that could have major consequences for the Trump family’s business.

The decision would not dissolve Mr Trump’s entire company, but it sought to end his control over a prime commercial property at 40 Wall Street in Lower Manhattan and a family estate in Westchester County. Mr Trump could also lose control of his other New York properties, including Trump Tower in midtown Manhattan, although a fight over this is likely to take place in the coming months.

Justice Angoron’s decision limited the issues that would be heard, ruling that the core purpose of Ms James’s case was legitimate. It represents a major blow to Mr Trump, whose lawyers had tried to persuade the judge to dismiss many of the claims against the former president.

In her order, Justice Engoron made scathing remarks about Mr. Trump’s defense, saying that the former president and other defendants, including his two adult sons and his company, ignored reality when it suited their business needs. “In defendants’ world,” he wrote, “rent-regulated apartments have the same value as unregulated apartments; Restricted land has the same value as unrestricted land; “Sanctions may fly in the face.”

“That’s a fantasy world, not the real world,” he said.

The judge also imposed sanctions on Mr Trump’s lawyers for arguments he had previously rejected. He ordered each to pay $7,500, noting that he had already warned them that the arguments in question bordered on being frivolous.

Repeating them, Justice Angoron wrote, was “inexcusable”.

Mr Trump still has the opportunity to delay the trial or drop the case. Mr Trump himself has sued Justice Angoron, and an appeals court is expected to rule on his suit this week. But if the appeals court rules against him, Mr Trump will have to fight the remainder of the trial.

Ms. James began investigating Mr. Trump in March 2019 and filed a lawsuit against him last September, alleging “shocking” fraud in representing the value of his apartment buildings, hotels and golf clubs, among other properties. . Their filing accuses Mr. Trump of using simple, underhanded tactics to inflate the value of his signature properties, from Trump Tower to Mar-a-Lago.

Mr Trump’s lawyers had asked Justice Angoron for a so-called summary judgment – ​​a ruling that he was entitled to win before trial based on undisputed facts – seeking to dismiss many of the claims against him. He relied heavily on a June appeals court ruling that created the impression that some claims against Mr. Trump may be too old to be heard.

Justice Engoron rejected Mr Trump’s request, interpreting the appeals court’s decision as contrary to his argument, while granting Ms James’s similar bid for partial summary judgment.

Mr Trump has denied all wrongdoing and accused Ms James, a Democrat, of political harassment. His lawyers have noted that the banks that lent money to Mr. Trump hardly suffered: They profited. He also argued that property valuation could be subjective, more of an art than a strict science.

But Justice Angoron, with whom Mr. Trump’s lawyers have butted heads at every turn, scoffed at those arguments.

“The documents don’t say what they say; That there is no such thing as ‘objective’ value,” the judge wrote in summarizing his opinion on their arguments, adding, “Essentially, the court should not believe its own eyes.”

In a footnote, he added a quote from the movie “Duck Soup” by Chico Marx: “Well, who will you believe, me or your own eyes?”

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