An appeals court in New York ruled Friday that former President Donald Trump and his family could keep their New York properties and business certificates — for now.
In a statement published by Trump’s son, Eric, the Trump Organization thanked the Appellate Division for staying a decision last month by judge Arthur Engoron.
We thank the Appellate Division for staying the NY Attorney General’s and Judge Engoron’s overzealous attempt to cancel our New York business certificates. Judge Engoron’s order erroneously sought to adjudicate the rights of non-party business entities that employ nearly 1,000…
— Eric Trump (@EricTrump) October 6, 2023
The former president could potentially lose control over all his businesses and properties in New York if New York Attorney General Letitia James’ $250 million civil fraud case is successful.
James’ lawsuit, which names Trump, his two adult sons, two employees, and the Trump Organization, alleged they “engaged in numerous acts of fraud and misrepresentation” by overvaluing at least 23 commercial properties for at least one decade.
The case is being heard in a bench trial, meaning Judge Arthur Engoron will have the final decision on whether Trump and his co-defendants are liable and what damages, if any they must pay.
James’ trial against Trump began Monday, but Engoron already concluded James proved her case before Trump’s attorneys could mount their defense. In a rare summary judgment, Engoron found Trump and his co-defendants were liable for fraud.
Engoron revoked Trump’s license to do business in New York as part of the summary judgment after determining he committed “repeated and persistent fraud” on his financial statements.
However, a New York appeals court on Friday temporarily halted Engoron’s order revoking Trump’s license to do business in New York, allowing him to maintain control of his businesses while the trial is pending.
If the former president’s New York business license is ultimately revoked, a court-appointed receiver would take possession of all Trump’s businesses within the state, where they would be sold to the highest bidder. Trump would receive the proceeds and still be able to manage his properties outside New York, despite Engoron determining Trump overvalued his Mar-a-Lago estate in Florida by 2,300 percent and other properties throughout the country and one in Scotland.
The revocation of Trump’s business license would mean he would lose control of iconic properties within the state, such as Trump Tower.
For example, Engoron ruled Trump and his organization overvalued Trump Tower by $114 million to $207 million.
“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,” Engoron wrote in his 35-page opinion.
Along with Trump Tower in Midtown, New York City, Trump would lose control of Trump Park Avenue on the city’s famous Fifth Avenue. Trump National Golf Club Hudson Valley and Westchester would also be stripped from the former president’s control. Trump is also at risk of losing other properties on 40 Wall Street, 1290 Ave. of the Americas, and 4-6 E. 57th Street, to name a few.
John Moscow, a former financial crimes prosecutor in Manhattan, said the purpose of Engoron stripping Trump’s New York business license “was to keep him out of New York.”
“He isn’t allowed to — basically, the control is being taken from him,” Moscow said.
James’ lawsuit against Trump is for $250 million because that amount she claims is equal to what Trump gained by overvaluing his various properties. However, Trump is also at risk of losing much more than $250 million if Judge Engoron orders Trump to disgorge profits from the real estate transactions if his properties are sold. Interestingly, James’ prosecutors are not alleging Trump that harmed anyone or caused severe financial consequences due to the alleged overvaluations.
As Yahoo Finance detailed:
One oddity of this suit is that prosecutors are not claiming anybody lost money or even suffered harm because of Trump’s overvaluations. The presumed victims aren’t customers Trump defrauded, contractors he stiffed, or shareholders he lied to. The victims are banks and insurance companies that supposedly undercharged Trump for loans and insurance policies, because Trump told them his properties were more expansive and valuable than they actually were.
The government doesn’t usually sue on behalf of big businesses that have their own well-staffed legal departments to protect them. James seems to be taking this approach because New York law empowers the attorney general to seek damages caused by fraudulent business behavior as a form of consumer protection. The law doesn’t require the prosecutors to identify a victim or even demonstrate anybody suffered harm.
Trump’s attorney, Christopher Kise, argued the former president did not intentionally defraud anyone with the reported property values. “Buyers have a view, sellers have a view, none of them are wrong,” Kise said.
The civil fraud trial is expected to last three months, and Trump has said he plans to testify in the case.