NY Judge's Shock Ruling: Trump's Real Estate Empire Built on Fraud

  • by:
  • Source: Wayne Dupree
  • 09/26/2023
On Tuesday, a judge made a ruling stating that Donald Trump engaged in fraudulent activities over a span of several years while establishing his real estate empire, which ultimately led to his widespread recognition and his occupancy of the White House.

In a civil lawsuit brought by New York's attorney general, Judge Arthur Engoron has made a ruling. The judge found that the former president and his company engaged in deceptive practices. Specifically, they deceived banks, insurers, and other parties by significantly inflating the value of their assets and exaggerating the former president's net worth. These misleading actions were carried out through the submission of paperwork used in various business deals and to secure financing.


In response to certain actions taken by Trump's business, Engoron issued an order to revoke a number of Trump's business licenses as a form of punishment. Additionally, Engoron expressed his intention to maintain an independent monitor to supervise the operations of the Trump Organization.

The ruling was made and a request for comment on the ruling was sent to a Trump spokesperson. However, there was no immediate response from the spokesperson. Throughout his tenure, former President Donald Trump has consistently maintained his innocence, vehemently denying any wrongdoing.

Days before the commencement of a non-jury trial in Attorney General Letitia James' lawsuit, a decision was made that serves as a significant rejection of former President Trump's cultivated persona as a successful and astute real estate magnate who transitioned into a formidable political figure.

According to Engoron's findings, it goes beyond simply boasting about his wealth. Trump, along with his company and key executives, consistently made false statements about their financial status on their annual financial statements. This deceptive behavior allowed them to benefit from advantages such as more favorable loan terms and reduced insurance premiums.

According to the judge, the tactics employed by Trump were deemed to have crossed a line and violated the law. The judge rejected Trump's argument that a disclaimer on the financial statements cleared him of any wrongdoing.

According to Engoron's 35-page ruling, the defendants argue that in their perspective, rent regulated apartments hold the same value as unregulated apartments, restricted land is equivalent to unrestricted land, restrictions can disappear without consequence, and a disclaimer by one party shifting blame onto another party absolves the other party of any falsehoods. The statement suggests that the mentioned world is a fantasy realm, distinct from the actual reality we inhabit.

The conduct in question was investigated by Manhattan prosecutors, who considered pursuing a criminal case. However, they ultimately decided against it. As a result, Attorney General Letitia James took legal action by suing Donald Trump. Her aim is to impose penalties that could potentially impact Trump's business operations in the state of New York, as well as his family's ability to conduct business there.

The ruling made by Engoron, which occurred during the summary judgment phase of the case, addresses the main claim in James' lawsuit. However, it is important to note that there are still six other claims that have yet to be resolved.

The non-jury trial in the case of Engoron is scheduled to commence on October 2nd. During this trial, Engoron will carefully consider the claims presented before him and determine any appropriate punishments, if necessary. In his pursuit of legal action, James is requesting a sum of $250 million in penalties, along with a prohibition on Donald Trump engaging in business activities within New York, which happens to be his home state. According to Engoron, it has been stated that the trial has the potential to extend into the month of December.

The lawyers representing Donald Trump made a request to the judge presiding over the case to dismiss it entirely. However, the judge ultimately denied their request. According to their argument, James' lawsuit may not have been legally permissible due to the absence of evidence demonstrating any harm inflicted upon the public as a result of Trump's actions. Furthermore, it was contended by them that a significant number of the accusations outlined in the legal action were rendered invalid due to the expiration of the statute of limitations.

In the case, Engoron made it clear that he strongly disagreed with those arguments. He compared them to the repetitive time-loop concept depicted in the movie "Groundhog Day."

A year ago, James, who identifies as a Democrat, filed a lawsuit against Trump and the Trump Organization. In her lawsuit, she accused them of engaging in a consistent pattern of deceit, which she cleverly referred to as "the art of the steal," a play on the title of Trump's 1987 business memoir, "The Art of the Deal."

In the lawsuit, it was alleged that Trump and his company engaged in a consistent practice of exaggerating the worth of various assets, such as skyscrapers, golf courses, and the Mar-a-Lago estate in Florida. This alleged inflation of asset values was purportedly done with the intention of boosting Trump's overall financial standing by billions of dollars.

One of the allegations made against Trump was that he falsely claimed the size and value of his Trump Tower apartment in Manhattan. According to reports, Trump allegedly stated that his three-story penthouse, which featured lavish gold-plated fixtures, was nearly three times larger than its actual size. Additionally, he purportedly valued the property at a staggering $327 million. According to James, it has never been recorded that any apartment in New York City has been sold for a price anywhere near that amount.

According to available information, it has been suggested that Donald Trump placed a significantly higher value on his property, Mar-a-Lago, than what may be considered a more realistic estimate. The reported value of $739 million is notably more than ten times greater than what experts deem to be a more reasonable assessment of its worth. According to James, the figure provided by Trump for the private club and residence was based on the assumption that the property could be utilized for residential purposes. However, it is important to note that the terms of the deed actually prohibit such development.

In the case at hand, President Trump has consistently maintained his innocence, refuting any allegations of wrongdoing. During his sworn testimony, he presented an argument that the contents of his financial statements are inconsequential. According to his testimony, he emphasized that these statements contain a disclaimer explicitly stating that they should not be relied upon as accurate representations. During the April deposition, he expressed to James that he believed there was insufficient evidence to support his case and advised him to consider dropping the legal proceedings.

Did you know that the banks have been completely paid? Did you know that banks have made a significant amount of money? Trump testified. “Do you know I don’t believe I ever got even a default notice, and even during COVID, the banks were all paid? And yet you’re suing on behalf of banks, I guess. The situation is quite remarkable. The whole case is crazy.”

Engoron rejected that argument when the defense previously sought to have the case thrown out.

The judge said the disclaimer on the financial statements “makes abundantly clear that Mr. Trump was fully responsible for the information contained within” them and that “allowing blanket disclaimers to insulate liars from liability would completely undercut” the “important function” that such statements serve “in the real world.”

James’ lawsuit is one of several legal headaches for Trump as he campaigns for a return to the White House in 2024. He has been indicted four times in the last six months — accused in Georgia and Washington, D.C., of plotting to overturn his 2020 election loss, in Florida of hoarding classified documents, and in Manhattan of falsifying business records related to hush money paid on his behalf.

The Trump Organization was convicted of tax fraud last year in an unrelated criminal case for helping executives dodge taxes on extravagant perks such as Manhattan apartments and luxury cars. The company was fined $1.6 million. One of the executives, Trump’s longtime finance chief Allen Weisselberg, pleaded guilty and served five months in jail. He is a defendant in James’ lawsuit and gave sworn deposition testimony for the case in May.

James’ lawsuit does not carry the potential of prison time, but could complicate his ability to transact real estate deals. It could also stain his legacy as a developer.

James has asked Engoron to ban Trump and his three eldest children from ever again running a company based New York. She also wants Trump and the Trump Organization barred from entering into commercial real estate acquisitions for five years, among other sanctions. The $250 million in penalties she is seeking is the estimated worth of benefits derived from the alleged fraud, she said.


James, who campaigned for office as a Trump critic and watchdog, started scrutinizing his business practices in March 2019 after his former personal lawyer Michael Cohen testified to Congress that Trump exaggerated his wealth on financial statements provided to Deutsche Bank while trying to obtain financing to buy the NFL’s Buffalo Bills.

James’ office previously sued Trump for misusing his own charitable foundation to further his political and business interests. Trump was ordered to pay $2 million to an array of charities as a fine and the charity, the Trump Foundation, was shut down.


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