Former President Donald Trump and his family business are facing a civil fraud trial in New York that could pose a significant threat to his real estate empire. The trial, set to begin on Monday, alleges that Trump inflated the value of his assets by billions of dollars in order to secure better loan and insurance terms. New York Attorney General Letitia James, a Democrat, is seeking at least $250 million in fines, a permanent ban against Trump and his sons from running businesses in New York, and a five-year restriction on Trump’s commercial real estate activities.
Trump, who is currently the frontrunner for the 2024 Republican presidential nomination, plans to attend the first week of the trial in Manhattan. This comes after a judge found him liable for fraud in a separate case the previous week. The trial will primarily focus on determining the penalties that Trump must face.
Justice Arthur Engoron, who presided over the case, described in scathing terms how Trump and his family made up valuations. For instance, Trump allegedly calculated the value of his apartment in Trump Tower as three times its actual size. Engoron ruled last week that James had successfully proven her fraud case against Trump, his two adult sons, and several of his companies. As a result, Engoron canceled business certificates for companies controlling some of Trump’s most valuable properties, including Trump Tower and his New York golf clubs. He also stated that he would appoint receivers to oversee their dissolution.
While the ruling currently only applies to a small portion of Trump’s vast portfolio, it includes some of his most prized assets. If fines and business restrictions are added, the impact on Trump’s finances would be even more significant. The trial is expected to run through early December and will feature over 150 potential witnesses, including Trump himself.
James alleges that Trump accrued hundreds of millions of dollars in ill-gotten savings by inflating the values of his assets. One example cited is his Mar-a-Lago club and residence in Florida, which James claims Trump listed as being worth up to $739 million despite deed restrictions capping its value at $28 million.
This case is one of several legal challenges Trump is facing as he seeks to regain the presidency in 2024. Although these legal issues have not affected his lead in the race for the Republican nomination, they have been a financial burden. Trump is currently under indictment in four separate cases, including charges related to handling classified documents, his attempts to overturn the 2020 presidential election results, and hush money payments made to a porn star. Trump has maintained his innocence and pleaded not guilty in all four cases.
Overall, the outcome of the civil fraud trial in New York could have significant implications for Trump’s real estate empire and his political ambitions.