CNN —
A New York judge found Donald Trump and his adult sons liable for fraud and canceled the Trump Organization’s business certification, a shocking ruling that poses an existential threat to the former president’s financial empire as he runs for a second term in the White House.
Judge Arthur Engoron’s ruling on Monday is a complete rejection of Trump’s arguments that he didn’t inflate the values of his golf courses, hotels, homes at Mar-a-Lago and Seven Springs on financial statements.
“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 fantasy world, not the real world,” Engoron said.
The ruling came in response to the lawsuit by New York Attorney General Letitia James, who is seeking $250 million in damages, a ban on the Trumps from serving as officers of a business in New York and to stop the company from engaging in business transactions for five years.
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A trial is expected to begin next week on the amount of damages owed, and the full breadth of Engoron’s ruling – or how it will play out – remains unclear.
The judge canceled the business certifications of the Trump entities that are defendants in the case, including the Trump Organization – a major blow to the business that has been so synonymous with the former president’s personal brand.
A receiver will be put in place to “manage the dissolution” of the corporate entities. There are two New York properties that are part of the lawsuit, the commercial tower at 40 Wall Street and the Trump family compound at Seven Springs.
Questions remain as to how the receiver would dissolve the properties, if the ruling would impact properties located outside of New York state, including Mar-a-Lago, and if the Trumps could transfer the New York-based assets into a new company located out of state.
“Today, a judge ruled in our favor and found that Donald Trump and the Trump Organization engaged in years of financial fraud,” James, a Democrat, said in a statement Tuesday night. “We look forward to presenting the rest of our case at trial.”
