Former US President Trump has suffered a serious legal defeat in a New York fraud case. The judge responsible ruled that the businessman and his family business could be held liable for fraud.
According to a New York judge, former US President Donald Trump manipulated the goodwill of his Trump Organization for years and thereby committed fraud.
The ex-president, his sons and senior employees systematically overestimated the value of the company in annual reports in order to obtain loans and insurance contracts on more favorable terms, according to a preliminary decision by Judge Arthur Engoron.
For example, Trump stated the size of his apartment in Trump Tower as around 2,800 square meters for years, even though it was only a good 1,000 square meters. As a result, the property was overvalued by up to $200 million. The value of his Mar-a-Lago estate in Florida is said to have been inflated by 2,300 percent in financial documents.
Trial begins on Monday
The judge’s accusation is a fundamental decision before the actual start of a civil trial against the 77-year-old Republican brought by New York Attorney General Letitia James next week. She wants to ensure that Trump has to pay $250 million in restitution and is no longer allowed to do business in New York. A final verdict is expected in December.
The Trump Organization family holding company is alleged to have overstated assets by billions of dollars between 2011 and 2021 in order to “secure and maintain loans and insurance on more favorable terms,” according to a court document from the attorney general’s office. The action left the defendants with “hundreds of millions of dollars in ill-gotten savings and profits,” the document continued.
Sentencing is still an open question
The lawsuit was originally directed against Trump’s three eldest children, Ivanka, Donald Junior and Eric Trump. However, Ivanka has since been removed from the lawsuit. The civil trial against Trump, his two eldest sons and several other defendants in New York will begin next Monday. With his ruling on Tuesday, Judge Engoron already anticipated an important decision about how this is possible in such proceedings.
One question in the process will be, among other things, how high the punishment will be against Trump. The ex-president is not threatened with a prison sentence in this civil case. The situation is different in four criminal cases in which Trump was indicted this year.