Trump Found Liable for Fraud in New York

What You Need to Know

The lawsuit says he exaggerated his net worth by billions of dollars on records sent to banks and insurers.
The ruling resolves the state’s biggest claim against the former president and narrows a trial set to start as soon as Oct. 2.
The suit seeks $250 million in restitution and other penalties.

Donald Trump was found liable for fraud ahead of trial in the New York attorney general’s lawsuit accusing him of exaggerating his net worth by billions of dollars a year on financial records submitted to banks and insurers, a major blow to the former president in the biggest civil case against him.

The ruling Tuesday by Justice Arthur Engoron in Manhattan resolves the state’s biggest claim against the former president and narrows a trial set to start as soon as Oct. 2.

The non-jury trial will now focus on the state’s remaining claims including falsifying business records and issuing false financial statements. The suit seeks $250 million in restitution and other penalties.

Engoron held that New York Attorney General Letitia James, who filed the suit in September 2022, had demonstrated liability by Trump as well as his sons Donald Trump Jr. and Eric Trump, along with the Trump Organization and its former chief financial officer, Allen Weisselberg.

He also ordered Trump’s lawyers, including Christopher Kise, to pay sanctions of $7,500 each for repeatedly advancing failed legal theories in the case.

Though the case has been overshadowed in recent months by the four criminal cases filed against Trump, James’s case could have far-reaching consequences. Along with monetary penalties, the attorney general is seeking to bar Trump from serving as an officer or director in any company in the state where he was born and where he first rose to fame.

In a statement posted to his Truth Social social media platform, Trump reiterated many of his claims in the case, including some that were rejected by the judge, whom he called a “Trump hater.”

The former president said he was worth more than his financial statements, that the banks suffered no harm from his statements and that a disclaimer on the statements made clear that they should not be relied upon.

“It is very unfair, and I call for help from the highest courts in New York state, or the federal system, to intercede,” Trump said.

Inflating Assets

The suit accuses Trump of inflating the value of the former president’s biggest assets from 2011 to 2021 to get better terms from banks and insurers. The judge sided with James on her allegation that Trump repeatedly engaged in fraud by claiming exaggerated values for some of his best properties on his annual statements of financial condition.

The judge cited in his ruling several examples, including that the former president frequently claimed that his Trump Tower penthouse was three times as big as it actually was, even after he was alerted to the error.

“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,” the judge wrote.

In sanctioning Trump’s lawyers, Engoron said they had repeatedly raised frivolous arguments that had already been rejected, including that James lacked standing to sue their clients. “Infants, legally declared incompetents, and persons under certain legal disabilities are not allowed to sue,” the judge said. “The New York attorney general is none of the above.”

‘Worthless Clause’

Engoron went on to describe Trump’s defense team as inhabiting a “fantasy world” in which “rent regulated apartments are worth the same as unregulated, 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.”