September 27, (THEWILL) – Former US President, Donald Trump, his sons, Eric and Don Jr, committed fraud by inflating the value of the real estate and financial assets of the Trump Organisation for years, a New York judge ruled on Tuesday.
The ruling by Judge Arthur Engoron is a setback for the former president ahead of a trial in the civil case due to begin on Monday, and a partial victory for New York State Attorney General, Letitia James.
James has accused Trump, his two eldest sons and other Trump Organisation executives, of lying to tax collectors, lenders and insurers for years in a scheme that routinely exaggerated the value of their properties.
Trump’s lawyers had asked the judge to throw out the case ahead of the trial by granting what is known as a summary judgement in his favour.
James had also asked for a summary judgement, however, seeking that Trump be found liable ahead of the trial and the judge sided with the attorney general.
In addition to finding that Trump and his sons committed fraud, the judge also revoked the business licences that allowed the Trump Organisation to operate some of its New York properties.
James is seeking $250 million in penalties and the removal of Trump and his sons from management of the family empire, the Trump Organisation.
He also claimed that Trump and his associates submitted “grossly inflated” numbers to banks and insurers each year between 2011 and 2021 “to secure and maintain loans and insurance on more favorable terms.”
They allegedly fraudulently overvalued the net worth of Trump company assets by billions of dollars, resulting in “hundreds of millions of dollars in ill-gotten savings and profits.”
James has alleged that the overvaluation of Trump’s assets was between $1.9 billion and $3.6 billion per year.
In his ruling, Engoron accused Trump, who gave a sworn deposition in the case, and his attorneys of “reliance on bogus arguments.”
“In defendants’ world: rent-regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land. This is a fantasy world, not the real world”, the Judge said.
Among the properties falsely overvalued (by between $114 million to $207 million) was Trump’s apartment in Manhattan’s Trump Tower, whose square footage was given as 30,000 square feet when it is actually 10,996 square feet.
“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”, the judge said.
Trump, the frontrunner for the 2024 Republican presidential nomination, has denounced the case as a “witch hunt, calling James, who is a Democrat and Black, “racist.”
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