Judge Arthur Engoron ruled on Tuesday that former President Donald Trump committed fraud while building his real estate empire, according to a civil lawsuit brought by New York’s attorney general. The judge found that Trump and his company deceived banks, insurers, and others by overvaluing assets and exaggerating net worth on paperwork used in deals and financing. As a result, Engoron ordered the revocation of some of Trump’s business licenses, making it difficult for his company to operate in New York. An independent monitor will oversee the Trump Organization’s operations. Trump’s spokesperson did not immediately respond to the ruling.
The judge’s decision, just days before the start of a non-jury trial in Attorney General Letitia James’ lawsuit, represents a significant blow to Trump’s reputation as a wealthy real estate mogul turned political figure. Engoron found that Trump, his company, and key executives repeatedly lied about their assets on financial statements, leading to favorable loan terms and lower insurance premiums. The judge rejected Trump’s argument that a disclaimer on the financial statements absolved him of any wrongdoing.
While Manhattan prosecutors declined to bring a criminal case over the same conduct, James filed a civil lawsuit seeking penalties and restrictions on Trump’s business activities in New York. Engoron’s ruling resolves the main claim in James’ lawsuit, but six other claims remain. A non-jury trial is scheduled to begin on October 2, where Engoron will decide on those claims and potential punishments. James is seeking $250 million in penalties and a ban on Trump doing business in New York.
Trump’s lawyers had requested the dismissal of the case, arguing that there was no evidence of harm to the public resulting from Trump’s actions and that the statute of limitations barred many allegations. Engoron rejected these arguments, equating them to the “time loop in the film Groundhog Day.”
Attorney General Letitia James filed the lawsuit a year ago, accusing Trump and his company of routinely inflating the value of assets such as skyscrapers, golf courses, and his Mar-a-Lago estate in Florida. Among the allegations was Trump’s claim that his Trump Tower apartment in Manhattan was nearly three times its actual size and valued at $327 million. James stated that no apartment in New York City has ever sold for close to that amount. Trump also valued Mar-a-Lago at over $739 million, despite a more reasonable estimate of its worth. Trump has consistently denied any wrongdoing, arguing that the disclaimer on his financial statements renders them untrustworthy.
Engoron’s ruling represents a significant legal challenge for Trump as he considers a potential return to the White House in 2024. He currently faces multiple indictments, including allegations of plotting to overturn his 2020 election loss and falsifying business records.