A judge in New York concluded that Donald Trump “repeatedly” misrepresented his wealth to banks and insurers, with the total amount being up to $3.6 billion (£3 billion).
The ruling gives the attorney general of New York a win on the most important argument she made in the civil lawsuit she brought against the former president.
The judge ruled that it was evident that the documents in question contained bogus appraisals that the defendants exploited in their business.
It is a significant setback for Mr. Trump right before the trial begins the following Monday.
In September of 2018, Attorney General Letitia James filed a lawsuit against Donald Trump, charging him, his two adult sons, and the Trump Organization of lying about his net worth and the valuations of his assets between the years 2011 and 2021.
Ms. James asserted that the defendants fabricated their company’s financial records and records of business transactions in order to obtain more favorable terms on bank loans and insurance policies, as well as to pay less income tax.
She plans to seek a judgment of $250 million in penalties and an injunction against Mr. Trump conducting business in his home state at the trial that will now decide the six remaining claims in her lawsuit.
The trial without a jury is set to get underway on October 2 and last at least through December.
Ms. James had sought Justice Arthur Engoron of the New York state court in Manhattan to make a decision regarding her claims during a pre-trial phase of the case that is known as summary judgement.
She suggested that by determining some facts to be indisputable, the trial might be moved along more quickly.
In the meantime, defense attorneys for Mr. Trump have demanded that the lawsuit be dismissed on the grounds that the general public was not affected by Mr. Trump’s activities and that the loans in question took place a very long time ago.
In the past, Mr. Trump has denied any wrongdoing and has dismissed the case in New York as yet another instance of a political “witch hunt” brought on by a prosecutor with a prejudice against him.
As part of the ruling that was handed down on Tuesday, the Trump Organization was instructed to terminate its existing business licenses in the state of New York and, within the next ten days, to propose impartial monitors who may oversee the termination process.
That will count as a legal loss for the person originally from New York who now resides in Florida.
The decision of the judge will not result in the dissolution of his corporation, but it may result in the loss of his ownership over iconic assets in New York City such as the Trump Tower and the Trump Building at 40 Wall Street.
Additionally, on Tuesday, Judge Engoron dismissed the Trump team’s attempt to throw out the lawsuit. In a separate ruling, the judge also penalized five Trump attorneys a total of $7,500 each for advancing arguments that the court had previously rejected.
During the discussions that took place in court on Friday, a lawyer working for Ms. James’ office stated that the former president had given his approval to claims that grossly overstated the appraisals that appraisers that his company had hired had provided.
But Christopher Kise, an attorney for Trump, contended that this demonstrated that Trump was a “investment genius” and “a master at finding value where others see nothing.”
Judge Engoron was not convinced by the argument. He was relentless in his questioning of Mr. Kise and his interruptions of him, and at one point he raised his voice and smashed his hand on the bench.
He stated, “You are not allowed to make false statements and use them in business,” which is something that is prohibited by this regulation.
His summary ruling went even further, claiming that Mr. Trump’s behavior amounted to more than merely talking about his riches and that he and his firm had frequently lied about his financial problems. Additionally, he argued that Mr. Trump’s behavior amounted to more than simply bragging about his riches.
According to what he wrote, “in the world of the defendants, rent-regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can vanish into thin air.”
“That is not the world we live in; it is a world of fantasy.”
Mr. Trump has continued his efforts to have the trial in New York delayed and has now filed a lawsuit against the judge.
This week, an appeals court is going to make a decision regarding that lawsuit. In the event that they rule against him, Mr. Trump will have little choice but to continue the matter in a court of law.
It is just one of the many legal disputes that he is embroiled in as he campaigns for a rematch with President Joe Biden the following year and a return to the White House.
In addition to being the clear front-runner to obtain the nominee of the Republican party, he is currently being charged with 91 felonies in four separate criminal proceedings. In each of the cases, he has entered not guilty pleas.