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Former President Donald Trump’s New York businesses are at risk after a fraud ruling. Assets may be liquidated, fines imposed, and a business ban is possible, experts warn.
Donald J. Trump’s extensive web of businesses in New York is under severe threat and could rapidly crumble following a recent fraud ruling by a state Supreme Court judge, according to legal and business experts.
In a summary judgment issued on Tuesday, the former president, along with his sons Donald Trump Jr. and Eric Trump, were found to have systematically inflated the value of corporate assets over several years. The ruling revealed startling instances of false inflation, including a 300 percent exaggeration of the square footage of a commercial building. Additionally, it was determined that they equated the value of rent-controlled apartments with those where landlords could set their own prices. Judge Arthur Engoron, who presided over the case, stated unequivocally that such practices belonged to a “fantasy world,” not reality.
This is not the first time Trump’s business operations have faced legal setbacks. In 2017, he agreed to pay $25 million to settle fraud allegations related to “Trump University,” while in 2019, he settled charges of diverting charitable funds for political purposes by paying $2 million.
The recent judgment poses an unprecedented danger to Trump’s businesses, as it led to the cancellation of certificates that permitted many of his companies to operate under New York state law. Furthermore, independent receivers have been appointed to oversee the dissolution of limited liability corporations that hold some of Trump’s most prized assets, including the Trump Building on Wall Street and Trump Tower.
Legal experts concur that Trump now faces three distinct threats:
- His New York business operations, now deemed fraudulent, may be handed over to a receiver for liquidation at public auction.
- Trump and other defendants could be required to pay a $250 million fine, potentially forcing the sale of assets.
- New York Attorney General Letitia James could permanently ban Trump and his associates from conducting business in the state.
The ruling underscores the sweeping powers held by the New York attorney general over Trump’s enterprises in the state and represents a significant challenge to Trump’s financial future. Despite his claims of political bias, unless the ruling is overturned on appeal, James will have extensive authority over Trump’s financial operations.
Trump and his legal team have vowed to challenge the decision, but their past efforts have faced rejection by state and federal courts. Legal experts caution that arguments claiming compliance with industry practices are unlikely to succeed when faced with fraudulent behavior.
As the trial begins in Judge Engoron’s Manhattan courtroom next week, it will determine whether Trump and his associates violated New York state laws and whether his companies will face substantial fines for fraudulent conduct. The trial is expected to provide clarity on the future of the Trump family’s business operations in New York state.
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