Tuesday, July 23, 2024

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    Landmark Judgment Finds Donald Trump Guilty of Fraud, Threatens Business Empire

     Judge Orders License Revocation and Independent Oversight in New York

    In a groundbreaking ruling on September 26, Judge Arthur Engoron delivered a verdict that sent shockwaves through the political and business world, declaring that Donald Trump had perpetrated fraud throughout his ascent to real estate prominence and the presidency of the United States. The verdict, part of a civil lawsuit initiated by New York’s attorney general, exposed a pattern of deception by Trump and his company, which included the manipulation of asset values and the exaggeration of his net worth, ultimately impacting financial institutions, insurers, and others involved in his business dealings.

    Judge Engoron’s ruling carries substantial consequences for Trump’s business endeavors, as it calls for the rescission of some of his business licenses, rendering operations in New York arduous, if not impossible. Furthermore, an independent monitor will now oversee the Trump Organization’s activities, ensuring compliance with the law. Trump’s spokesperson offered no immediate response to the verdict, consistent with his long-standing assertion of innocence.

    This decision, arriving on the cusp of a non-jury trial in Attorney General Letitia James’ lawsuit, constitutes a severe rebuke of Trump’s carefully cultivated image as a wealthy and astute real estate tycoon turned political juggernaut. Beyond mere boasts of opulence, the ruling exposes how Trump, his company, and key executives routinely misrepresented financial information in annual statements, reaping rewards such as favorable loan terms and reduced insurance premiums. Judge Engoron firmly rejected Trump’s contention that disclaimers on these financial statements absolved him of wrongdoing, asserting that such a notion belonged to a “fantasy world, not the real world.”

    While Manhattan prosecutors had considered pursuing criminal charges for similar misconduct, they declined to do so, leaving Attorney General James to file the civil lawsuit and seek penalties that could substantially disrupt Trump and his family’s ability to conduct business in New York.

    Judge Engoron’s verdict, rendered during a summary judgment phase, addresses the primary claim in James’ lawsuit, with six additional claims remaining to be adjudicated in a non-jury trial commencing on October 2. James is seeking penalties amounting to $250 million and a prohibition on Trump’s business activities in New York, his home state. The trial’s duration could extend into December, as Judge Engoron deliberates on potential punishments.

    Trump’s legal team had attempted to have the case dismissed, arguing that there was no evidence of public harm resulting from Trump’s actions and that many allegations were barred by the statute of limitations. Judge Engoron firmly dismissed these arguments, equating them to a “time-loop in the film ‘Groundhog Day.'”

    In her lawsuit, filed a year ago, Attorney General James alleged a consistent pattern of dishonesty, which she dubbed “the art of the steal,” a play on the title of Trump’s 1987 business memoir, “The Art of the Deal.” The lawsuit contends that Trump and his company habitually inflated asset values, including skyscrapers, golf courses, and his Mar-a-Lago estate in Florida, thereby inflating his overall wealth by billions.

    Among the most notable claims was Trump’s valuation of his Trump Tower penthouse in Manhattan at nearly three times its actual size, appraising it at $327 million. Such an exorbitant valuation far exceeded the sale price of any New York City apartment. Additionally, Trump valued Mar-a-Lago at a staggering $739 million, more than ten times its reasonable worth, based on the potential for residential development, despite deed restrictions prohibiting such use.

    Trump’s defense has consistently rested on the assertion that disclaimers on financial statements rendered them untrustworthy, but Judge Engoron dismissed this argument, emphasizing Trump’s full responsibility for the information within those statements.

    This lawsuit represents one of several legal challenges for Trump as he explores a return to the White House in 2024. In recent months, he has faced indictments in Georgia and Washington, D.C., related to efforts to overturn the 2020 election, in Florida for the hoarding of classified documents, and in Manhattan for falsifying business records tied to hush money payments.

    Notably, the Trump Organization was convicted of tax fraud last year in an unrelated case, incurring a $1.6 million fine. Allen Weisselberg, Trump’s long-serving finance chief, who pleaded guilty and served five months in jail, is a defendant in Attorney General James’ lawsuit.

    While this lawsuit may not carry the prospect of prison time, it could significantly impede Trump’s real estate transactions and tarnish his legacy as a developer. Attorney General James seeks to ban Trump and his three eldest children from running a New York-based company ever again and restrict the Trump Organization from engaging in commercial real estate acquisitions for five years, among other sanctions. The $250 million in penalties being pursued reflects the estimated benefits derived from the alleged fraud.

    Attorney General James initiated her investigation in March 2019, prompted by Trump’s former personal lawyer, Michael Cohen, who testified to Congress that Trump had overstated his wealth in financial statements provided to Deutsche Bank during his bid to purchase the NFL’s Buffalo Bills.

    This lawsuit follows a previous legal battle in which Trump was ordered to pay $2 million to various charities as a fine for misusing his charitable foundation to advance political and business interests. The Trump Foundation was subsequently dissolved.

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