In a significant blow to former President Donald Trump, a state judge ruled on Tuesday that he had committed fraud by inflating the value of his New York properties. The judge sided with the state’s attorney general, Letitia James, who accused Trump of persistent fraud in seeking favorable loans from banks. If the ruling stands, it could lead to the revocation of Trump’s licenses to operate his properties, including Trump Tower and the Trump International Hotel. Trump is expected to appeal the decision and has sued the judge himself.
The judge’s ruling has left Trump’s New York operation hanging in the balance. If the decision stands, two scenarios could emerge. The first is a complete sell-off of several properties and a shutdown of Trump’s New York operations. The second scenario involves appointing a court-appointed chief executive, potentially Barbara S. Jones, to oversee the properties and prevent Trump and his sons from running the empire without permission from the court. Both scenarios would severely impact Trump and his business, and legal experts describe the judge’s ruling as a rare step.
Trump, who has denied any wrongdoing, has criticized both the judge and Attorney General James, noting that they are both Democrats. Trump’s lawyers also called the ruling “outrageous” and accused the judge of ignoring legal, accounting, and business principles. The full consequences of the ruling will only become clear once the civil trial is over, as James seeks to permanently bar Trump from running a business in New York and prevent him from applying for loans from financial institutions registered in the state. The confusion surrounding the ruling stems from the Trump Organization’s complex structure, comprising numerous legal entities and properties.