A New York judge ruled that former President Donald Trump committed fraud for several years while growing his real estate empire known as the Trump Organization.
New York State Supreme Court Justice Arthur Engoron ruled Tuesday in a civil suit brought by Attorney General Letitia James that Trump and his company deceived banks and insurers by inflating his assets and exaggerating his net worth on paperwork to close deals and secure financing opportunities.
Engoron found that James proved her fraud claims without the need for a trial on that matter.
Her civil suit sought $250 million in penalties, a ban on Trump doing business in the Empire State, and alleges six other counts against Trump and his family. The trial may last through December, Engoron has said.
James succeeded on the first of seven counts, finding that the business certificate filed by Trump, his sons Eric and Donald Trump Jr., former Chief Financial Officer Allen Weisselberg, and company controller Jeffery McConney must be canceled.
The attorney general and the defendants must “recommend the names of no more than three potential independent receivers to manage the dissolution” of the companies within 10 days, Engoron said in the 35-page ruling.
Engoron also ruled that Judge Barbara Jones would continue to serve as independent monitor of the Trump Organization.
The decision falls just one week before a nonjury trial is slated to commence as the former president also prepares to fight four criminal indictments against him in the span of less than a year.
Engoron also granted James’s request to sanction five of Trump’s lawyers for raising already-dismissed arguments in court, ordering $7,500 fines per attorney.
Defendants will still face a trial on the remaining causes of action before the judge, including conspiracy to falsify records, insurance fraud, conspiracy to commit insurance fraud, issuing false financial statements, and conspiracy to falsify false financial statements.
A separate ruling is pending over Trump’s bid to sue Engoron, which may have the result of delaying the trial. That decision could come as soon as Thursday.
As part of the lawsuit against Engoron, Trump’s lawyer Chris Kise has pointed to a June appeals court ruling that removed his daughter, Ivanka Trump, from the list of defendants in James’s civil suit. Kise contended that the ruling should effectively toss out the claims against the former president as well.