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Judge Rules Trump Committed Fraud, Stripping Control of Key Properties

Occam's Banana

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Judge Rules Trump Committed Fraud, Stripping Control of Key Properties
The decision in a lawsuit that could go to trial next week is a major win for Attorney General Letitia James, who says former President Donald J. Trump overvalued his holdings by as much as $2.2 billion.
https://www.nytimes.com/2023/09/26/nyregion/trump-james-fraud-trial.html
[archive link: https://archive.ph/3nOQd]
{Jonah E. Bromwich & Ben Protess | 26 September 2023}

A New York judge ruled on Tuesday that Donald J. Trump persistently committed fraud by inflating the value of his assets, and stripped the former president of control over some of his signature New York properties.

The decision by Justice Arthur F. Engoron is a major victory for Attorney General Letitia James in her lawsuit against Mr. Trump, effectively deciding that no trial was needed to determine that he had fraudulently secured favorable terms on loans and insurance deals.

Ms. James has argued that Mr. Trump inflated the value of his properties by as much as $2.2 billion and is seeking a penalty of about $250 million in a trial scheduled to begin as early as Monday [see this thread - OB].

Justice Engoron wrote that the annual financial statements that Mr. Trump submitted to banks and insurance companies “clearly contain fraudulent valuations that defendants used in business.”

Ms. James, in a brief statement, said, “We look forward to presenting the rest of our case at trial.”

A lawyer for Mr. Trump, Christopher M. Kise, indicated that he would appeal the decision, which he called “outrageous” and “completely disconnected from the facts and governing law.” He said that the judge ignored an earlier appeals court ruling and “basic legal, accounting and business principles.”

While the trial will determine the size of the penalty, Justice Engoron’s ruling granted one of the biggest punishments Ms. James sought: the cancellation of business certificates that allow some of Mr. Trump’s New York properties to operate, a move that could have major repercussions for the Trump family business.

The decision could terminate his control over a flagship commercial property at 40 Wall Street in Lower Manhattan and a family estate in Westchester County. Mr. Trump might also lose control over his other New York properties, including Trump Tower in Midtown Manhattan and his golf club in Westchester.

The order will not dissolve Mr. Trump’s company itself, which is a collection of hundreds of entities, but the decision could nonetheless have a sweeping impact on the company’s New York operations. If Justice Engoron’s decision is not reversed by an appeals court, it could shut down an entity that employs hundreds of people working for him in New York, effectively crushing the company.

“The decision seeks to nationalize one of the most successful corporate empires in the United States and seize control of private property,” Mr. Kise said.

The order would also unwind the Trump Organization L.L.C. That entity is relatively inconsequential, a vehicle for the sprawling company’s brand name. But it has been synonymous with Mr. Trump from his earliest days as a developer with a penchant for tabloid publicity, bringing his father’s outer-borough business to the heart of Manhattan.

While Ms. James’s civil case had been overshadowed by the four criminal indictments of the former president [see here - OB] — which are unrelated to Ms. James’s accusations — the judge’s decision, if it stands, will represent the first punishment to emerge from a government investigation into Mr. Trump.

Justice Engoron’s decision narrows the issues that will be heard at trial, deciding that the core of Ms. James’s case was valid. It represents a major blow to Mr. Trump, whose lawyers had sought to persuade the judge to throw out many claims against the former president.

In his order, Justice Engoron wrote scathingly about Mr. Trump’s defenses, saying that the former president and the other defendants, including his two adult sons and his company, ignored reality when it suited their business needs. “In defendants’ world,” he wrote, “rent-regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate into thin air.”

“That is a fantasy world, not the real world,” he added.

The judge also levied sanctions on Mr. Trump’s lawyers for making arguments that he had previously rejected. He ordered each to pay $7,500, noting that he had previously warned them that the arguments in question bordered on being frivolous.

Repeating them was “indefensible,” Justice Engoron wrote.

Even if Mr. Trump’s attempt to appeal the ruling is unsuccessful, he still has an opportunity to delay the trial, or even gut the case. Mr. Trump has sued Justice Engoron himself, and an appeals court is expected to rule this week on his lawsuit. But if the appeals court rules against him, Mr. Trump will have to fight the remainder of the case at trial.

Mr. Trump is his own most dedicated promoter and for years has acted as a booster for the value of his buildings and his brand. The possibility that Mr. Trump’s exaggerations could be criminal has long intrigued prosecutors, and the Manhattan district attorney’s office at one point came close to indicting Mr. Trump on charges that he had misrepresented their value.

The current district attorney, Alvin L. Bragg, declined to pursue that case, but later indicted the former president in connection with a hush money payment to a porn star [see this thread - OB].

Ms. James started investigating Mr. Trump in March 2019 and filed a lawsuit against him last September, accusing him of “staggering” fraud in representing the value of his apartment buildings, hotels and golf clubs, among other assets. Her filings have accused Mr. Trump of using simple, duplicitous tricks to multiply the represented value of his signature properties, from Trump Tower to Mar-a-Lago.

In one noteworthy example, she accused Mr. Trump of overestimating the size of the triplex apartment in Trump Tower in which he lived for decades, saying it was 30,000 feet, rather than about 11,000. Justice Engoron seized on that, noting that Mr. Trump’s lawyers had “absurdly” suggested that the calculation of square footage was subjective and adding that good-faith measurements might vary by as much as 10 to 20 percent, but not 200 percent.

“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,” he wrote.

Mr. Trump’s lawyers had asked Justice Engoron for a so-called summary judgment — a ruling that they were entitled to a victory before trial based on undisputed facts — seeking to toss out many claims against him. They relied heavily on an appeals court ruling from June that raised the notion that some claims against Mr. Trump might be too old to proceed to trial.

Justice Engoron denied Mr. Trump’s request, interpreting the appeals court ruling as relatively inconsequential for the case, while granting Ms. James’s similar bid for partial summary judgment.

Mr. Trump, a Republican, has denied all wrongdoing and accused Ms. James, a Democrat, of political persecution. His lawyers have noted that the banks that lent Mr. Trump money were hardly victims: they turned profits. They also argued that valuing property can be subjective, more art than a strict science.

“The court disregarded the viewpoint of those actually involved in the loan transactions who testified there was nothing misleading, there was no fraud, and the transactions were all highly profitable,” Mr. Kise said in his statement. He added that there was “zero evidence of any default, breach, late payment or any complaint of harm.”

But those are some of the very arguments for which Justice Engoron, with whom Mr. Trump’s lawyers have tangled at every turn, issued sanctions.

“The documents do not say what they say; that there is no such thing as ‘objective’ value,” the judge wrote, paraphrasing their arguments as he saw them, and adding, “Essentially, the court should not believe its own eyes.”

In a footnote, he added a line from the movie “Duck Soup” uttered by Chico Marx: “Well, who ya gonna believe, me or your own eyes?”
 
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BREAKING: JUDGE RULES TRUMP DEFRAUDED BANKS & INSURERS
https://twitter.com/MarioNawfal/status/1706779664268644382
{Mario Nawfal | 26 September 2023}

In the biggest blow yet, a judge ruled Trump committed fraud for years as he built his real estate empire.

Judge Arthur Engoron found that Trump and his company deceived banks, insurers and others by massively overvaluing his assets and exaggerating his net worth on paperwork used in making deals and securing financing.

KEY POINTS:

- Engoron found that Trump, his company and key executives repeatedly lied about their wealth on their annual financial statements, reaping rewards such as favorable loan terms and lower insurance premiums.

- Engoron states that those tactics crossed the line, rejecting Trump’s contention that a disclaimer on the financial statements absolved him of any wrongdoing.

- Engoron ordered that some of Trump’s business licenses be rescinded as punishment, making it difficult or impossible for them to do business in New York.

- He also said he would continue to have an independent monitor oversee the Trump Organization’s operations.

- Engoron’s ruling, in a phase of the case known as summary judgment, resolves the key claim in the lawsuit, but six others remain.

“In defendants’ world: rent regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate into thin air; a disclaimer by one party casting responsibility on another party exonerates the other party’s lies That is a is a fantasy world, not the real world.” - From Engoron's ruling.

 
The decision by Justice Arthur F. Engoron is a major victory for Attorney General Letitia James in her lawsuit against Mr. Trump, effectively deciding that no trial was needed to determine that he had fraudulently secured favorable terms on loans and insurance deals.

LOL - Like a jury trial would have made a difference in Manhattan.
 
The system encourages this kind of fraud. It’s only when you run afoul of the ruling politicians that it becomes a problem. I bet you’d find that a majority of large businesses do the same.

In a free market, it’s a cautionary tale for customers and investors. In whatever we have now, it leverage for control.
 
Holy fucking shit.

Theyre literally trying to destroy him.

And for what???

Pushing through a bumpstock ban, crazy debt and trying to secure the border?
 
I'm not alleging that this is a victimless crime....yet........ but who was the injured party that started this investigation?
 
The system encourages this kind of fraud. It’s only when you run afoul of the ruling politicians that it becomes a problem. I bet you’d find that a majority of large businesses do the same.

In a free market, it’s a cautionary tale for customers and investors. In whatever we have now, it leverage for control.

So you believe this ruling? What ever happen to "Innocent until proven guilty?"

Has anyone notice that every time the Republicans fine a new damning piece of information on Hunter and Joe, then some judge puts a slap down of Trump? Coincidence? Nah, convenient, yes.
 
So you believe this ruling? What ever happen to "Innocent until proven guilty?"

Gee, I don't see where he said that. He just said it happens continuously, which is true.

Has anyone notice that every time the Republicans fine a new damning piece of information on Hunter and Joe, then some judge puts a slap down of Trump? Coincidence? Nah, convenient, yes.

Of course. Biden was designed to fail. Your buddy will be back in a couple of years, trying to get you to take that jab of his.

Once it's his again, will you like it better? You'll be surprised how many of your peers will.
 
That rule applies in criminal cases. This was a civil proceeding.

Anyone may apply that standard personally wherever they wish. At least, they may in a free country.

And since this "civil case" was filed by an attorney general who isn't even alleging that she was personally defrauded, it does seem to blur that line, doesn't it? Or have the banks even claimed they suffered by loaning money that was paid back with the requisite interest?

Attorney general brings a case against someone who has no victims. Pardon me for saying it sure sounds like a criminal case.
 
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That rule applies in criminal cases. This was a civil proceeding.

However, for a judge to rule that a persons entire business enterprise must be totally absolved via a ruling in a civil case is unusual. Normally, there is a monetary decision.

This smacks of political bias... shockingly /s.
 
The Judge claimed Mar-a-Lago is only worth $18 million.

The vacant property down the street that is 1/10th the size is going for $150 million.

Mar-a-Lago is estimated to be worth upwards of $1 billion or more.
 
The system encourages this kind of fraud. It’s only when you run afoul of the ruling politicians that it becomes a problem. I bet you’d find that a majority of large businesses do the same.

In a free market, it’s a cautionary tale for customers and investors. In whatever we have now, it leverage for control.

It's not fraud... if you buy a property for $10,000 and build something that makes the property worth $1 million based on income generation, you get to take out loans based on the $1 million. If you are building something that you predict will make the property worth $1 million in income generation, then you can take out a loan based on the $1 million. Therefore it is all speculative. It's actually the bank's responsibility to do the due diligence and make the determination.

In this case, Trump paid back all the loans.

Context:

It was once my job to approve business loans for a bank. We believed nothing applicants told us, relying only on documents such as tax returns and third-party assessments.


Nearly all applicants "exaggerate" their ability to repay a loan. None were indicted.


I couldn't even insure my house without the insurance company walking through it to see for themselves.


So, I have questions.



https://twitter.com/ScottAdamsSays/status/1706791205613514999

In an attempt to destroy my father and kick him out of New York, a Judge just ruled that Mar-a-Lago, in Palm Beach Florida, is only worth approximate “$18 Million dollars”… Mar-a-Lago is speculated to be worth we’ll over a billion dollars making it arguably the most valuable residential property in the country. It is all so corrupt and coordinated.



https://twitter.com/EricTrump/status/1706795629505114508



https://twitter.com/HappyCamper2626/status/1707022440272912729
 
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The largest wall street banks in the world with the most sophisticated law firms reviewing contracts and approving loans, all the loans were paid back with interest. None of the banks are claiming fraud and are not part of the civil suit.

Things are getting really bad.
 
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nice Irish fella.
 
However, for a judge to rule that a persons entire business enterprise must be totally absolved via a ruling in a civil case is unusual. Normally, there is a monetary decision.

The summary judgment the judge rendered was for liability. There will be a trial to determine the size of the penalty and other remedies.
 
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