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Trump Basically Just Lost the New York Bank Fraud Case Before It Even Started



Former President Donald Trump, his top executives, and heirs were declared completely liable of “persistent and repeated fraud”—and the real estate empire was unceremoniously stripped of its business licenses in New York—after a judge’s powerful ruling Tuesday ahead of a massive trial that seeks to hit them with more than $250 million in penalties for bank fraud.

And in a stunning development, the judge has already ordered the complete dissolution of the fabled Trump Organization–the tycoon’s pride and joy, the empire that made him famous and elevated him into the White House. The Trump Organization and its sister companies will be sent into receivership to be under the control of a court-appointed officer.

Even before the trial officially starts, the ruling handed New York Attorney General Letitia James a near total victory, meaning that next week’s trial will mostly focus on damages that could pulverize whatever is left of Trump’s many business entities and bank accounts.

In his 35-page opinion, Justice Arthur F. Engoron tore apart what he called the Trump family’s “bogus arguments” and obstreperous conduct. And he summed up the entire defense as “a fantasy world, not the real world.”

“In defendants’ world: rent regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land, restricts can evaporate into thin air… all illegal acts are untimely if they stem from one untimely act; and square footage [is] subjective,” he wrote.

Trump, several of his heirs, and top executives will now be fighting off accusations of bank and insurance fraud at a civil trial that’s scheduled to run from early October until late December. AG Letitia James seeks to punish them all for routinely lying about property values to score better deals. At trial, it will be up to Judge Engoron alone whether the Trumps will owe $250 million-plus in penalties, be prohibited from serving as executives, and have the company charters revoked.


At a court hearing last week, lawyers on both sides tried to convince the judge to grant them each a total victory to avoid much of the trial. Engoron decided against that, rejecting the Trumps’ request to dismiss the case entirely and the AG’s request to have a trial solely on damages.

On Tuesday, Engoron ripped the Trumps—and their lawyers—apart for dragging this on so long with legal arguments that wasted the courts time by repeatedly questioning whether the AG even had the authority to hold them accountable this way.

Those arguments “glaringly misrepresent” the law and trying them again and again “invoke the time-loop in the film Groundhog Day,’” the judge wrote, calling attempts to topple the case this way “pure sophistry.”

Engoron also made the pivotal decision to keep all of the AG’s lawsuit intact, concluding that all of the real estate deals in question are not too old for law enforcement to crack down on for bank fraud. He brushed off the Trumps’ attempt to whittle down the lawsuit ahead of a trial that could drain the wealthy family’s bank accounts.

The timing of this decision also throws a wrench into the Trumps’ Hail Mary play, in which they sued the judge directly and prematurely asked a state appellate court to intervene because he hadn’t yet made his decision on the statute of limitations—an oddly aggressive move that reeked of delay tactics. That higher court, the appellate division’s First Judicial Department, has yet to weigh in. Doing so now might be a moot point. As such, the trial appears to be set to start next Monday, as planned.

The judge seemed particularly annoyed at what he described as the Trumps’ inability to run their business ethically. He had previously assigned a former federal judge to oversee aspects of the Trump Organization to ensure that it did not slyly shift assets ahead of the trial—only to discover that executives wouldn’t let the court-appointed monitor do her job.

“Even with a preliminary injunction place, and with an independent monitor over seeing their compliance, defendants, I continue to disseminate falls, and misleading information while conducting business,” he wrote.


The judge said that canceling the business certificate was justified.

“This ongoing flouting of this court’s prior order, combined with the persistent nature of the false [statements of financial condition] year after year, have demonstrated the necessity of canceling the certificates,” he added.

In his decision on Tuesday, Engoron also decided to impose sanctions on the Trumps’ lawyers over the AG’s accusations that they have acted unprofessionally by raising ridiculous arguments and delaying the case this long. AG investigators have been digging into the Trumps’ finances for more than three years and have been slowed down at every turn by a company that has refused to turn over documents and Trump family members who wouldn’t show up for official interviews. The family’s procrastination and obstruction efforts forced the judge to intervene several times, at one point ordering the former president himself to pay $110,000 in fines.

“Unfortunately, sanctions are the only way to impress upon defendants’ attorneys the consequences of engaging in repetitive, frivolous motion practice after this court, affirmed by the appellate division, expressly warned them against doing so,” he wrote.

He ordered the entire Trump legal team—Michael Madaio, Clifford S. Robert, Michael Farina, Christopher Kise, and Armen Morian—to each pay $7,500, a punishment that will also serve as a blemish on their professional records.

Source: The Daily Beast


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