In a significant legal development, former President Donald Trump, along with two of his sons and several of his companies, has been found liable for fraud in a New York state court. This ruling could potentially cost Trump up to $250 million, with the exact amount to be determined in an upcoming trial set to commence next week. The presiding judge, Justice Arthur F. Engoron, has also taken the extraordinary step of nullifying the business certificates of Trump and many of his associates, effectively stripping Trump of control over his New York properties.
Trump’s legal team has expressed their intention to appeal Tuesday’s ruling. Additionally, Trump has initiated a separate lawsuit against Justice Engoron, the outcome of which may be determined this week. However, if these efforts fail, Trump will be compelled to proceed to trial.
If a trial does proceed, it is likely to be relatively brief. Tuesday’s ruling was delivered as part of a summary judgment, which means that further arguments in court may not be necessary since a review of Trump’s financial statements was sufficient to establish repeated instances of fraud. Trump had sought to have the case dismissed, arguing that the alleged fraud took place too long ago to hold him liable.
Justice Arthur F. Engoron rejected Trump’s defense, characterizing it as a false claim that “the documents do not say what they say; that there is no such thing as ‘objective’ value; and that essentially the Court should not believe its own eyes.”
This represents a significant setback for Trump, particularly in the context of New York Attorney General Letitia James’ multi-year investigation into his New York business dealings. Notably, James’s civil case is separate from the four sets of criminal charges Trump faces across multiple states, ranging from New York to Georgia. Together, Trump’s civil and criminal cases are expected to dominate much of the 2024 Republican primary calendar, with his legal troubles consuming substantial amounts of his campaign funds.
Interestingly, there have been no indications thus far that a judgment against Trump in the New York attorney general’s case will harm him politically. Despite a majority of Americans expressing a desire for more transparency regarding his business dealings while he was in office, Trump has largely resisted such disclosures. He declined to release his tax returns, which had become a customary practice for presidential candidates, and still managed to win the 2016 election. Currently, he maintains a significant lead in the Republican primary, which has seemingly grown with each of his criminal indictments.
In response to the ruling, Trump posted a dismissive statement on his social network, asserting that he had conducted business perfectly and characterizing the case as a distraction from discussions about law and order. He followed this message with reminders of his substantial lead in the primary.
Why Trump Was Found Liable
Attorney General Letitia James argued that the court only needed to consider two straightforward questions before delivering its ruling: whether Trump’s annual financial statements from 2011 to 2021 were false or misleading, and whether he and his associates repeatedly or persistently used these statements in business transactions.
Based on the evidence presented by James’s office, Justice Engoron concluded that both questions warranted a “yes” response. Additionally, he imposed a fine of $7,500 on each of Trump’s lawyers for revisiting arguments that he had previously rejected.
James cited numerous instances in which Trump had inflated the value of his assets. For instance, she contended that Trump had falsely stated the square footage of his Manhattan Trump Tower apartment, inflating its value by $100 million to $200 million annually from 2012 to 2016. She also argued that Trump had incorrectly valued his Mar-a-Lago estate in Florida as a single-family residence instead of a social club, as required by restrictive deeds. Furthermore, she claimed that he had overvalued undeveloped land at his Scottish golf course by assuming he could build and sell more residential homes than permitted by the Scottish government.
Justice Engoron found these arguments persuasive, stating, “In [the] 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… That is a fantasy world, not the real world.”