In a significant ruling, Judge Arthur Engoron determined Tuesday that Donald Trump and his real estate company had deceived financial institutions, insurers and other entities by drastically inflating asset values and misrepresenting his net worth in official documents meant for deal-making and obtaining financing.
The ruling emerged from a civil lawsuit spearheaded by New York Attorney General Letitia James. Engoron’s decision will result in the revocation of several of Trump’s business licenses, complicating the Trump Organization’s ability to operate in New York. Moreover, the company will be under the watchful eye of an independent monitor moving forward.
Trump has yet to provide a statement on the latest developments. However, the former president has maintained a stance of innocence, asserting, “You don’t have a case and you should drop this case.”
Judge Engoron’s 35-page ruling provided insights into the depth of the misrepresentations. He wrote, “In 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; a disclaimer by one party casting responsibility on another party exonerates the other party’s lies.” Engoron termed this a “fantasy world.”
Significant allegations include Trump’s claim that his Trump Tower apartment in Manhattan was valued at a staggering $327 million and Mar-a-Lago was valued at an unrealistic $739 million.
Attorney General James pointed out the discrepancies and later actions that showed such valuations to be false.
Engoron’s decision is part of a larger process, with the next non-jury trial set for Oct. 2. That trial, possibly lasting until December, will explore remaining claims and the consequential penalties.
Attorney General James is pushing for $250 million in penalties and seeks to ban Trump from conducting business in New York.
Although many clients may “tweak” valuations, it is worthwhile letting them know that in at least this case, the authorities are willing to issue substantial fines. The outcome may reshape how asset valuations are approached, scrutinized, and authenticated, impacting not just Trump’s business dealings but potentially setting a precedent in the wider industry.
This case is one of several legal challenges Trump is currently facing, with implications ranging from potential penalties, business operation restrictions, to further stains on his legacy in the real estate sector.