Trump Found Liable for Fraud in New York

'Worthless Clause'

Engoron went on to describe Trump's defense team as inhabiting a "fantasy world" in which "rent regulated apartments are worth the same as unregulated, 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 was referring to Trump's habit of valuing properties without taking into account restrictions on their use and his assertion that disclaimers about his valuations signaled to banks and accountants that they should do their own.

According to court filings, Trump valued his Mar-a-Lago resort in Palm Beach, Florida, at more than $700 million based on the false premise that the property could be fully developed for residential use even though he himself agreed to restrictions limiting it to use as a social club.

"I never felt that these statements would be taken very seriously," Trump said during his April deposition in the case, "because you open it up and right at the beginning of the statement, you read a page and a half of stuff saying, 'go get your own accounting, go get your own this, go get your own that.'"

Trump had called the disclaimers "worthless" clauses because they meant the statements should have very little impact on the banks' decisions. But the judge said those clauses weren't enforceable and couldn't insulate Trump from liability for fraud.

"Defendant's reliance on these 'worthless' disclaimers is worthless," Engoron said.

Engoron also said in his ruling that Trump had flouted an earlier court order intended to reign in alleged violations of New York business law during the litigation.

"Even with a preliminary injunction in place, and with an independent monitor overseeing their compliance, defendants have continued to disseminate false and misleading information while conducting business," Engoron said.

More Issues

Trump, who claims James's lawsuit is politically motivated, is likely to appeal the ruling.

He's also making a last-ditch effort to delay the trial by arguing to a New York appeals court that Engoron failed to narrow the case after an appellate panel ruled some the state's claims might be too old.

James argued a trial on her fraud claim wasn't necessary because the evidence that Trump violated New York's Executive Law was overwhelming. The attorney general said in court filings that her team gathered proof that Trump inflated his net worth annually by as much as $3.6 billion by exaggerating the market value of properties including his Mar-a-Lago estate in Florida.

Trump argued against the state's motion for so-called summary judgment, saying the annual statements of financial condition that he gave to banks and insurers had "powerful disclaimers" saying they should do their own valuations. He has also argued that James didn't have a right to sue because the banks and insurers didn't suffer any financial losses.

The case is New York v. Trump, 452564/2022, New York State Supreme Court (Manhattan).

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