A New York Supreme Court judge found Donald Trump and two of his children liable for fraud on Tuesday, putting the former president one step closer to losing control of the real-estate empire that first brought him to fame. But on Wednesday, the judge told one of Trump’s lawyers that he had not yet decided whether the former president would actually need to sell his assets in New York.
Judge Arthur Engoron agreed with state Attorney General Letitia James, who brought the case, that Trump committed years of business fraud by knowingly inflating the worth of several of his well-known properties to banks with the intent of receiving loans with more favorable terms. Also implicated in the ruling are the former president’s eldest sons, Donald Jr. and Eric as well as his namesake company: the Trump Organization.
As part of her initial civil lawsuit, which she brought last year, James sought to permanently ban the Trumps and their company from operating a business in the state and to levy a $250 million fine on the family members involved. In his ruling, Engoron ordered that the business certificates that allowed the family’s limited liability companies to operate in New York be rescinded and that independent receivers be put in place to manage them. This could mean that Trump will lose control over the iconic properties that bear his name such as Trump Tower, as well as make it more difficult for the former president to do business in his home state. Trump’s legal team intends to appeal the ruling. In a second hearing on Wednesday, Trump lawyer Christopher Kise asked Judge Engoron whether he was “under the impression” that the former president’s assets in New York would actually have to be sold, or whether they would merely be managed by a monitor. “I’m not prepared to issue a ruling right now,” Engoron said.
The judge’s partial judgment allows the case to proceed to trial on October 2 as planned, to address additional claims from the attorney general’s office. The trial could result in far larger fines for Trump and his family. The ex-president previously made multiple attempts to delay or even throw out the lawsuit to no avail.
“Today, a judge ruled in our favor and found that Donald Trump and the Trump Organization engaged in years of financial fraud,” James said in a tweet Tuesday. “We look forward to presenting the rest of our case at trial.”
Trump has railed against the judge’s decision on his social-media site TruthSocial, calling Engoron “deranged” and James “racist” in one post.