A judge has ruled that Donald Trump committed fraud for years while building the real estate empire that catapulted him to fame and the White House.
Judge Arthur Engoron, ruling Tuesday in a civil lawsuit brought by New York’s attorney general, found that the former U.S. president 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.
Engoron ordered that some of Trump’s business licences be rescinded as punishment, making it difficult or impossible for them to do business in New York, and he said he would continue to have an independent monitor oversee the Trump Organization’s operations.
A Trump spokesperson did not immediately respond to a request for comment on the ruling. Trump has long insisted he did nothing wrong.
The decision, days before the start of a non-jury trial in New York Attorney General Letitia James’s lawsuit, is the strongest repudiation yet of Trump’s carefully coiffed image as a wealthy and shrewd real estate mogul turned political powerhouse.
Beyond mere bragging about his riches, Trump, his company and key executives repeatedly lied about them on his annual financial statements, reaping rewards such as favourable loan terms and lower insurance premiums, Engoron found.
Those tactics crossed a line and violated the law, the judge said, rejecting Trump’s contention that a disclaimer on the financial statements absolved him of any wrongdoing.
“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,” Engoron wrote in his 35-page ruling. “That is a is a fantasy world, not the real world.”
Manhattan prosecutors had looked into bringing a criminal case over the same conduct but declined to do so, leaving James to sue Trump and seek penalties that could disrupt his and his family’s ability to do business in the state.
Traffic goes by Trump Tower on 5th Avenue in New York City on March 27, 2023. (Bryan Woolston/The Associated Press)
Engoron’s ruling, in a phase of the case known as summary judgment, resolves the key claim in James’s lawsuit, but six others remain.
Engoron is slated to hold a non-jury trial starting Oct. 2, before deciding on those claims and any punishments he may impose. James is seeking $250 million US in penalties and a ban on Trump doing business in his home state of New York.
The trial could last into December, Engoron has said. Trump’s lawyers had asked the judge to throw out the case, which he denied.
They contend that James wasn’t legally allowed to file the lawsuit because there isn’t any evidence that the public was harmed by Trump’s actions. They also argued that many of the allegations in the lawsuit were barred by the statute of limitations.
Engoron, noting that he had “emphatically rejected” those arguments earlier in the case, equated them to the “time-loop in the film Groundhog Day.”
Pattern of duplicity
James, a Democrat, sued Trump and the Trump Organization a year ago, alleging a pattern of duplicity that she dubbed “the art of the steal,” a twist on the title of Trump’s 1987 business memoir The Art of the Deal.
The lawsuit accused Trump and his company of routinely inflating the value of assets like skyscrapers, golf courses and his Mar-a-Lago estate in Florida, padding his bottom line by billions. Among the allegations were that Trump claimed his Trump Tower apartment in Manhattan — a three-storey penthouse replete with gold-plated fixtures — was nearly three times its actual size and valued the property at $327 million US.
No apartment in New York City has ever sold for close to that amount, James said.
Trump valued Mar-a-Lago as high as $739 million US — more than 10 times a more reasonable estimate of its worth.
Trump’s figure for the private club and residence was based on the idea that the property could be developed for residential use, but deed terms prohibit that, James said.
Trump has denied wrongdoing, arguing in sworn testimony for the case that it didn’t matter what he put on his financial statements because they have a disclaimer that says they shouldn’t be trusted.
He told James at the April deposition: “You don’t have a case and you should drop this case.”
“Do you know the banks were fully paid? Do you know the banks made a lot of money?” Trump testified. “Do you know I don’t believe I ever got even a default notice, and even during COVID, the banks were all paid? And yet you’re suing on behalf of banks, I guess. It’s crazy. The whole case is crazy.”
Engoron rejected that argument when the defence previously sought to have the case thrown out.
The judge said the disclaimer on the financial statements “makes abundantly clear that Mr. Trump was fully responsible for the information contained within” them and that “allowing blanket disclaimers to insulate liars from liability would completely undercut” the “important function” that such statements serve “in the real world.”
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Trump facing multiple trials
James’s lawsuit is one of several legal headaches for Trump as he campaigns for a return to the White House in 2024.
He has been indicted four times in the last six months — accused in Georgia and Washington, D.C., of plotting to overturn his 2020 election loss, in Florida of hoarding classified documents, and in Manhattan of falsifying business records related to hush money paid on his behalf.
The Trump Organization was convicted of tax fraud last year in an unrelated criminal case for helping executives dodge taxes on extravagant perks, such as Manhattan apartments and luxury cars.
The company was fined $1.6 million US.
One of the executives, Trump’s longtime finance chief Allen Weisselberg, pleaded guilty and served five months in jail.
He is a defendant in James’s lawsuit and gave sworn deposition testimony for the case in May.
James’s lawsuit does not carry the potential of prison time, but could complicate Trump’s ability to transact real estate deals. It could also stain his legacy as a developer.
James has asked Engoron to ban Trump and his three eldest children from ever again running a company based New York. She also wants Trump and the Trump Organization barred from entering into commercial real estate acquisitions for five years, among other sanctions.
The $250 million in penalties she is seeking is the estimated worth of benefits derived from the alleged fraud, she said.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
