Court Determines Donald Trump Engaged in Fraudulent Activities During Real Estate Career

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A ruling was handed down on Tuesday by Judge Arthur Engoron, indicating that Donald Trump engaged in fraudulent activities over several years as he established the real estate empire that eventually propelled him into the political arena and, ultimately, the U.S. presidency.

The civil lawsuit, filed by New York Attorney General Letitia James, concluded that the former president and his organization manipulated financial documents to deceive financial institutions, insurance companies, and other stakeholders. They inflated asset values and misrepresented net worth for the purpose of securing favorable loans and conducting transactions.

As a punitive measure, Judge Engoron revoked some of the business licenses held by the Trump Organization, seriously impeding its ability to conduct operations in the state of New York. Additionally, the judge mandated that an independent entity would continue to supervise activities within the Trump Organization.

Christopher Kise, legal counsel for Trump, immediately announced plans to appeal the ruling, denouncing it as a “perversion of justice” that is “utterly inconsistent with factual evidence and established law.”

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Media attention has also been focused on the judge presiding over Trump’s indictment in Georgia, as well as moves by Trump’s lawyers to counter what they allege is a prosecutorial gag order in his 2020 federal election case. Even California, known for its liberal politics, might surprisingly bolster Trump’s chances in the 2024 election.

Kise further claimed that the decision aims to federalize a successful private business while seizing control of private assets, despite a lack of concrete evidence of financial misconduct or harm to any party.

Eric Trump, a Trump Organization executive and also a defendant in the lawsuit, expressed profound disillusionment with the New York judicial system, accusing it of being biased against his father.

Judge Engoron’s decision comes shortly before the initiation of a bench trial concerning other claims made in James’ lawsuit. This ruling serves as the most potent rebuttal thus far to Trump’s longstanding portrayal of himself as a savvy and wealthy business magnate.

Judge Engoron dismissed Trump’s argument that disclaimers on financial documents exonerated him, finding that such behavior constituted legal violations. Favorable loan terms and reduced insurance costs were among the benefits gained through these fraudulent practices.

The ruling was part of a summary judgment, resolving primary claims but leaving several others pending. The upcoming trial on October 2 will also address James’ request for $250 million in penalties. Trump’s legal team is seeking a temporary stay from an appellate court.

In her statement, Attorney General James expressed satisfaction with the court’s ruling, while Trump’s lawyers had unsuccessfully moved for the case to be dismissed, arguing against its legal validity and the expiration of the statute of limitations on certain charges.

James initially filed the lawsuit a year ago, accusing Trump and his organization of inflating asset values, such as skyscrapers, golf courses, and his Mar-a-Lago estate, to exaggerate his financial standing.

The ruling could further complicate Trump’s real estate ventures and may tarnish his reputation as a developer. It adds another layer to the multitude of legal issues facing Trump, who is currently the Republican front-runner for the upcoming election.

Last year, the Trump Organization was convicted in an unrelated tax fraud case, resulting in a $1.6 million fine and a guilty plea from Allen Weisselberg, Trump’s longtime financial chief, who also faces charges in James’ lawsuit.

James began her investigation into Trump’s business practices in March 2019 following testimony by Michael Cohen, Trump’s former personal attorney, that Trump had inflated his assets while attempting to acquire the NFL’s Buffalo Bills. James had also previously sued Trump for misusing his charitable foundation, leading to a $2 million fine and the dissolution of the Trump Foundation.

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Contributions to this report were made by Eric Tucker in Washington, D.C., Jill Colvin in Summerville, South Carolina, and Bernard Condon and David B. Caruso in New York.

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More about Donald Trump Fraud Ruling

• New York Attorney General’s Official Statement
• Summary of Judge Arthur Engoron’s Ruling
• Legal Challenges Facing Donald Trump
• Overview of Fraudulent Business Practices in Real Estate
• Eric Trump’s Response on Social Media
• Details on Previous Indictments against Donald Trump
• History of the Trump Organization
• Letitia James’ Political Career
• Donald Trump’s Business Ventures
• Allen Weisselberg’s Involvement in Trump Organization