Donald Trump lied about real worth to secure loans, rules judge

Donald Trump  (AP)
Donald Trump (AP)

Donald Trump committed fraud with “fantasy” valuations of his property empire as he rose to prominence as a business tycoon and ultimately

president of the United States, a judge in New York has ruled.

Judge Arthur Engoron found that Mr Trump and his company had deceived banks, insurers and others by massively overvaluing his assets and exaggerating his net worth on paperwork used in making deals and securing financing.

The former president could lose business licences as a punishment after the damaging ruling, which comes on the eve of a civil trial examining his wealth and property dealings.

Mr Trump, who is leading the field in the race to be the 2024 Republican presidential candidate, responded on his Truth Social site with an attack on the judge and called it “a very sad day for the New York State System of Justice”.

“Today’s Ruling about a Company that has done a magnificent job for New York State fails to acknowledge the fact that Murder and all other forms of Violent Crime have reached record levels in New York State” he wrote.

“Can you imagine ruling against me for having done business perfectly, and yet letting people go on a rampage on the sidewalks of New York?

“This is the Judicial conduct that is forcing thousands of companies to flee New York for other environs, while virtually nobody comes back to the City or State.”

Mr Trump had been attempting to stop a civil lawsuit brought by New York’s attorney general Letitia James, as she seeks $250 million in damages and a ban on the ex-president doing business in the state. She has dubbed her lawsuit against Trump “the art of the steal”.

Judge Engoron rejected the application to bring summary judgment and end the case, and instead delivered a 35-page ruling which concluded that Mr Trump, his company, and key executives had repeatedly lied about his wealth on his annual financial statements in the pursuit of favourable loan terms and lower insurance premiums.

The judge said the tactics had gone beyond simply bragging about his riches and crossed into breaking the law, while a disclaimer on the financial statements did not absolve 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,” the judge wrote. “That is a is a fantasy world, not the real world.”

A non-jury trial is due to start in the case on Monday.

The judge also dismissed Mr Trump’s arguments that there is not enough evidence for Ms James’ claim, and that she is bringing the case too late.

He said those submissions had been “emphatically rejected” earlier in the case, and likened the revival of the arguments to the “time-loop in the film Groundhog Day”.

Ms James’ lawsuit against Mr Trump and the Trump Organisation claims the value of assets including skyscrapers, golf courses and his Mar-a-Lago estate in Florida were routinely inflated.

Among the allegations were that Mr Trump claimed his Trump Tower penthouse in Manhattan was nearly three times its actual size and valued the property at $327 million, while he is accused of falsely stating Mar-a-Lago was worth $739 million — more than 10 times its actual estimated worth.

He was also said to have bragged about his golf course in Turnberry, Scotland. “I could sell that. That’s like selling a painting. A painting on a wall that sells for $250 million,” he said.

Mr Trump has denied wrongdoing, and relies on a disclaimer on financial statements which says that valuations should not be trusted.

Judge Engoron said the disclaimer “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”.

The civil trial is set to last until December. Mr Trump also faces four criminal indictments over allegations that he plotted to overturn the 2020 election result, hoarded classified documents, and falsified business records over hush money paid on his behalf.