Judge Finds Trump Liable For Fraudulently Overvaluing Real Estate Empire
The case alleges that Trump inflated the value of his properties by as much as $2B to score loans and insurance deals while also misvaluing assets in order to lower the amount of property taxes due.
But Judge Arthur Engoron decided that James’ civil case has grounds to go ahead. The ruling amounts to a determination that Trump fraudulently inflated the value of his assets, meaning James' case is valid, per the NYT. Engoron also ordered Trump’s lawyers to pay $7,500 each for making arguments that he had already rejected.
Trump still has the possibility to delay the trial. He has already sued Engoron, with an appeals court expected to rule this week on that case. But if the appeals court sides with Engoron, the case will go to trial, per the NYT.
This summer, an unsealed filing revealed an argument from James that Trump falsely increased his net worth by between $812M and $2.2B every year for a decade. She wants the court to ban Donald Trump and three of his children, Donald Jr., Eric and Ivanka Trump, from working in New York real estate for five years and has asked for $250M in restitution. She also accused the Trumps of trying to move their assets out of the state a month after she first brought the case last year.
James’ lawsuit, filed in September 2022, alleged that the former president engaged in fraud between at least 2011 and 2021 and that her office had uncovered 200 examples of the Trumps misvaluing assets. She cited Trump Tower on Fifth Avenue, claiming it was overvalued by almost $175M in 2018, and additional examples of overvalued assets included 40 Wall Street and The Mar-a-Lago Club in Florida.
The case has also ensnared brokerage giant Cushman & Wakefield due to its work appraising Trump properties. The firm gave more than 36,000 documents related to its appraisals to the AG’s office last summer after it was subpoenaed and briefly held in contempt for not turning over the documents.
The New York AG’s case against Trump has led to greater scrutiny of the real estate appraisal process. Commercial landlords use the lack of transparency to lower tax payments on properties, appraisal experts told Bisnow last year, with advocates saying the Trump case is a good example of the need for reform.
"White-collar financial crime is not a victimless crime," James said at a press conference last September announcing the Trump suit. "When the well-connected break the law to take in more money than they are entitled to, it reduces resources to working people, to regular people, to small businesses and to all taxpayers."
Trump became the first former president to be charged with a felony in April. He pleaded not guilty to 34 felony counts related to falsifying business records in a Manhattan courtroom and is facing separate felony charges in Washington, D.C., and in Georgia.