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Former President Donald Trump and his real estate company face significant legal setback in New York civil fraud suit, as judge bars Trump from running any business in the state for three years and imposes $364 million in penalties plus interest. Trump’s sons Donald Trump Jr. and Eric Trump, were also found liable and barred from being officers of a company in New York for two years.
During a three-month trial, New York Attorney General Letitia James claimed Trump inflated asset values on annual financial documents for more than a decade to dupe Deutsche Bank AG and other lenders into giving him better terms on hundreds of millions of dollars in loans.
Documents at the center of New York’s fraud case allegedly show Trump’s net wealth was inflated by as much as $3.6 billion a year from 2011 to 2021. According to the state, values were boosted by counting luxury homes and other improvements that didn’t yet exist; appraising land as if there were no restrictions on development; and counting as cash proceeds that Trump didn’t have control over.
For years, Trump tripled the square footage of his Trump Tower penthouse apartment to claim it was worth more than $300 million, until Forbes magazine called him out.
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The fine was mostly based on the $168 million Trump saved by getting lower interest rates on four loans by lying about his wealth. It also includes the $127 million profit from the Old Post Office hotel deal in Washington and $60 million from the sale of Ferry Point golf course in New York, which the state says he wouldn’t have been able to purchase without inflating the value of his assets. The sum also includes the return of bonuses paid to employees who participated in the fraud.
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The 92-page verdict by Justice Arthur Engoron in Manhattan is a threat to Trump’s real estate empire and the latest legal setback as the Republican frontrunner campaigns to return to the White House.
Christopher Kise, the lead Trump lawyer at the trial, said in a statement that the fine was “draconian and unconstitutional” and called the verdict a “tyrannical abuse of power.”
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This isn’t the first time Trump’s business interests have been stunted by the New York attorney general. In November 2016, then-President-elect Trump agreed to pay $25 million to settle the state’s civil fraud lawsuit against his Trump University, which had been accused of ripping off thousands of students.
(With Bloomberg inputs)
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Published: 17 Feb 2024, 06:37 AM IST
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