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Former President Donald Trump can continue operating his New York-based businesses for now, an appeals court has ruled, granting a stay on a penalty ordered by the judge overseeing Trump's civil trial in state court.
New York state Supreme Court Judge Arthur Engoron, who is presiding over the trial, ordered the suspension of business licenses belonging to the former president, his children and The Trump Organization on the eve of the trial, a move some called a corporate death penalty.
But Justice Peter Moulton of the 1st Division of the New York Appellate Court wrote in a Friday order that The Trump Organization, as well Trump, his two eldest sons and former Chief Financial Officer Allen Weisselberg, can keep their business licenses.
The appellate decision is temporary, as the rest of state Attorney General Letitia James’ civil case against Trump is entering its second week. James is seeking to bar Trump from doing New York real estate deals and fine him as much as $250M. While the AG's suit is a civil proceeding, the former president also faces 91 criminal charges across four indictments, The Wall Street Journal reported.
James alleges that Trump misvalued real estate assets controlled by his businesses, inflating values to score favorable loans while simultaneously assessing their value downward to lower property taxes.
In doing so, James argued, Trump inflated his own personal net worth by more than $3.6B, a number even higher than the $2.2B her office’s investigation first estimated.
The trial is proceeding with Engoron at the helm and without a jury. Engoron has already found Trump liable for fraud based on the evidence submitted by James’ office. It was in that ruling that Engoron ordered the cancellation of Trump's business licenses. But the trial still has to examine additional claims related to insurance fraud, conspiracy and falsifying documents.
Lawyers for Trump argued last week that the inflated property values offered in appraisals are simply a part of how the real estate sector works, The Guardian reported. Trump is also leaning on the “worthless clause,” arguing that addendums warned buyers that the property values weren’t independently verified.
“We have renowned experts that say properties like Mar-a-Lago are worth over $1B,” Trump lawyer Alina Habba said during opening statements. “I bet you there is someone who would buy that property for way over $1B. That is not fraud. That is real estate.”
James’ office has pursued the case against Trump, arguing that white-collar crime isn't victimless. In opening statements last week, Trump lawyer Christopher Kise contested this idea, saying that there were no “unjust profits, and there were no victims.”
Last week, former Trump Organization Vice President Jeffrey McConney testified that he routinely included fake mansions valued at hundreds of millions of dollars and rent-stabilized apartments valued as market-rate units in Trump’s annual financial statements, Bloomberg reported.
Weisselberg is due to take the stand Tuesday morning, per NBC News, after McConney told courts that Weisselberg asked for his help committing tax fraud.
The trial is set to proceed with some of the city’s real estate titans named on witness lists by the prosecution. Investor Steve Witkoff and Palm Beach luxury broker Lawrence Moens are named as witnesses, as are multiple people associated with Cushman & Wakefield after the firm was subpoenaed last summer for its appraisal work on behalf of Trump, The Real Deal reported.
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