A New York judge found on Tuesday that former President Donald Trump and his business associates committed fraud by lying about the financial valuation of various business assets from as early as 2011. In doing so, Judge Arthur Engoron granted New York Attorney General Letitia James’ motion for partial summary judgment and effectively ordered the dissolution of “any of the entity defendants” and “any other entity controlled or beneficially owned by” Trump and his business associates.
In reviewing the financial documents obtained by the Office of the Attorney General (OAG) of New York, Engoron found that “the documents…clearly contain fraudulent valuations that defendants used in business.” As a result, the court found that Trump and his two sons, Donald Trump Jr. and Eric Trump, as well as Trump Organization Chief Financial Officer Allen Weisselberg and Trump Organization Controller Jeffrey McConney all bear responsibility for perpetrating financial fraud against the state of New York. The court also placed blame on various corporate entities underlying the Trump Organization.
The documents submitted by the OAG covered a range of Trump-owned properties as described in Trump financial filings from 2011 through 2021. James alleged that Trump inflated the financial valuation of the properties between $812 million and $2.2 billion each year. In his Tuesday decision, Engoron analyzed fraudulent financial filings from six Trump-owned properties, “a number of golf clubs across the United States and abroad,” partnership properties, licensing deals and other loans. In doing so, he found James’ accusations of financial fraud to be true.
As a result, the court ordered that the state cancel any certificates allowing Trump, his businesses partners and associated entities to operate within New York. Engoron also appointed an independent monitor to oversee Trump’s compliance with the court order. The court previously imposed an independent monitor to ensure that Trump did not commit any more fraudulent acts while the case was pending. However, Engoron noted in Tuesday’s decision that the monitor observed that “defendants have continued to disseminate false and misleading information while conducting business.”
Under New York Executive Law § 63(12), the New York Attorney General is permitted to launch an investigation and seek to stop the business practices of any person caught committing “repeated fraudulent or illegal acts or otherwise demonstrat[ing] persistent fraud or illegality in the carrying on, conducting or transaction of business.” James launched this civil lawsuit in September 2022 under this law.
In their response to James’ motion for partial summary judgment, Trump’s legal team sought to discredit James’ ability to bring suit. However, Engoron quickly dismissed the challenging, as the he had previously dismissed the same challenge twice before in earlier proceedings in the case.
Trump also sought to shift blame away from himself by referring to certain provisions of the financial filings at issue that, he claimed, placed the blame on his accounting firm, Mazars. The court rejected this, however, finding that various disclaimers and financial provisions from Mazars “put the onus for accuracy squarely on [Trump’s] shoulders.”
There were a number of other procedural arguments from Trump’s legal team against James’ motion, but Engoron dismissed those as well.
In issuing his decision, Engoron also sanctioned members of Trump’s legal team for “frivolous motion practice.” In analyzing Trump’s defenses in opposition to James’ motion for partial summary judgment, Engoron repeatedly noted that he had already rejected almost half of the legal arguments made by Trump’s team in previous decisions in the case. Engoron found the decision continue to assert the same, previously rejected claims was “intentional and blatant disregard of controlling authority and law of the case.” As a result, each attorney who helped filed the motion now faces a fine of $7,500.
Tuesday’s decision settles only one cause of action from James’ civil lawsuit against Trump and his organization. There still remain another six causes of action, which are currently slated to proceed to trial. They join with Trump’s other pending legal challenges, including four criminal cases and another New York civil case.
