The ruling is a huge financial penalty for Trump as he campaigns again for the White House and a major victory for New York Attorney General Letitia James, who filed the case.
Trump clashes with judge on day two of his civil fraud trial
Judge Arthur F. Engoron ruled that former President Donald Trump committed fraud by exaggerating the values of his properties to secure loans.
A New York judge ordered Donald Trump, his namesake company and two of his sons to pay nearly $364 million in damages and barred them from conducting business in the state after committing rampant fraud in over-valuing his real estate empire.
Supreme Court Justice Arthur Engoron had already ordered the business halted by ruling that the Republican presidential frontrunner committed fraud from 2011 through 2021 through “pure sophistry” and a “fantasy world” of real-estate valuations that “can only be considered fraud.” But an appeals court put the order on hold while Engoron presided over a fall trial to determine damages.
“In order to borrow more and at lower rates, defendants submitted blatantly false financial data to the accountants, resulting in fraudulent financial statements,” Engoron said in his 94-page ruling Friday. “When confronted at trial with the statements, defendants’ fact and expert witnesses simply denied reality, and defendants failed to accept responsibility or to impose internal controls to prevent future recurrences.”
He found Trump and his Donald J. Trust Revocable Trust liable for $354 million, his sons Eric and Donald Trump Jr. liable for $4 million each and former chief financial officer Allen Weisselberg for $1 million. Engoron also barred Trump from doing business in New York State for three years.
The civil case marks an enormous financial blow to the former president, whose namesake buildings dot the globe, and a major victory for state Attorney General Letitia James, who filed the lawsuit.
Trump still faces a handful of cases this year while campaigning again for the White House. On Jan. 26, a civil federal jury ordered Trump to pay $83 million to writer E. Jean Carroll for defamation. And he has pleaded not guilty in an unprecedented four criminal cases: a federal election interference trial pending in Washington, a federal trial alleging he mishandled classified documents, an election racketeering trial in Georgia and a trial about falsifying business records in New York.
Trump companies often valued properties far higher than appraisers or tax assessors, Engoron found. Trump testified that a disclaimer on property values given to lenders meant the banks knew the estimates were “worthless.”
“This is a fantasy world, not the real world,” Engoron wrote in September.
The judge outlined several glaring disputes over Trump property values:
- A 200-acre Westchester County property called Seven Springs LLC was appraised by Royal Bank of Pennsylvania in 2006 at $30 million if converted to residential homes. A Cushman & Wakefield appraiser estimated the value in 2014 at $30 million. Trump reported the value at $261 million to $291 million during that period.
- Trump Park Avenue, a residential building, had rent-controlled apartments that Engoron ruled had been overvalued by 700%. Trump’s lawyers argued the units could eventually become market-rent units, but Engoron ruled the numbers are supposed to represent “current” values, not “someday, maybe” values.
- A lease at 40 Wall St. in New York was appraised in 2010 by Cushman & Wakefield as worth $200 million. But the Trump Organization valued the property at $525 million in 2011 and at $735 million in 2015. Trump said the differences were irrelevant because his lender, Ladder Capitol, made $40 million in interest on a loan for the property. Trump has maintained throughout the trial that James is persecuting him for a victimless crime.
- Mar-A-Lago, Trump’s Florida resort, had a market value ranging from $18 million to $27.6 million during the decade ending 2021, according to the Palm Beach County assessor. Trump valued the property at up to $612 million during that period.
- Trump’s own apartment in Trump Tower is 10,996 square feet, but he submitted claims it was 30,000 square feet, according to Engoron. The difference resulting in an overvaluation of $114 million to $207 million, the judge wrote.
“A discrepancy of this order of magnitude by a real estate developer sizing up his own living space of decades, can only be considered fraud,” Engoron wrote of the Trump Tower apartment.