Donald Trump could be hit where it hurts him the most as he faces a potentially major financial penalty and his businesses taken from him under New York Attorney General Letitia James’ $250 million lawsuit, a legal expert told Newsweek.
Andrew Lieb, a real estate attorney and legal political analyst, was reacting to the ruling from Judge Arthur Engoron that the former president had misled banks and insurers by inflating the value of his properties in financial statements for years in order to obtain financial perks.
Engoron also ruled that the New York business certificates of The Trump Organization will be canceled, as well as any certificates of companies owned by Trump and two of his sons, Eric and Donald Trump Jr.—who are also named in James’ suit—which may result in the former president’s companies being removed from his control and dissolved.
Trump said he will appeal the ruling, and accused the “widespread, radical attack” against him of having “devolved to new, un-American depths.”
The ruling from Engoron is a major victory for James and means that the issue of whether Trump committed fraud while valuing numerous properties will not need to be decided in the civil trial when it begins on October 2 and will now mainly determine the size and scale of the penalty.
While James’ lawsuit is asking for a fine of up to $250 million for fraud, as well as a ban on Trump running businesses in New York, the true figure will be decided by Engoron. Michael Cohen, a former Trump lawyer whose 2019 congressional testimony triggered the investigation that resulted in James’ $250 million suit, told CNN on Tuesday he estimates that the judge could fine Trump as much as $600 million when taking into account interest and penalty.
Lieb has suggested that beyond “going to jail for the rest of his life” in any of the criminal cases Trump faces, punishing the former president financially and having his business certificates canceled will cause him the greatest pain.
“This is the next worst nightmare that Donald Trump must have been having each night as he slept in his club, Mar-a-Lago, which is one of the many properties that the Judge found Trump drastically overvalued by ignoring zoning restrictions when seeking loans,” Lieb told Newsweek.
“To make matters worse, there is still a trial happening on six other causes of action that were also levied by the attorney general in this case against Trump where he can still be ordered to pay $250 million plus after the trial.”
Trump is alleged to have drastically overvalued his Mar-a-Lago resort in Florida. Trump valued the resort between 2011 to 2021 at $347 million to $739 million based on the premise that it was unrestricted property and could be developed for residential use.
Engoron noted that Trump’s assessment was at least 2,300 percent above a Palm Beach County Assessor’s appraisal from the same period, which estimated Mar-a-Lago’s value to be between $18 million and $27.6 million as it is listed as a social club and cannot be sold as a single-family estate.
In his 35-page ruling, Engoron said that Trump’s inflated assessment of his properties, which also include golf courses, his Seven Springs Estate in New York state and his triplex apartment at Trump Tower in Manhattan, came from a “fantasy world, not a real world.”
Engoron’s decision is also the latest in a series of legal headaches that the former president is facing amid his latest presidential campaign. The 91 criminal charges filed against Trump across for criminal cases—which Trump has denied— are not harming the former president in the 2024 GOP presidential primary polls and he remains the overwhelming favorite to clinch the Republican nomination.
However, Lieb suggested the fallout from James’ $250 million lawsuit may damage Trump in the eyes of potential key independent and moderate Republican voters, whose support the former president may have to rely on if he has any hopes of winning the general election next year.
“This won’t damage Trump in his MAGA political circles that he needs for the nomination, but amongst independents and traditional Republicans, it’s yet another reminder that he is a failed businessman whose iconic Trump Tower will soon fade into our memories as his assets are liquidated by an independent receiver,” Lieb told Newsweek.
In a statement after Engoron’s ruling, Trump called the judge “deranged” and accused him of “doing the bidding” of the “completely biased and corrupt” New York Attorney General.
“We are rapidly becoming a communist country, and my civil rights have been taken away from me,” Trump said. “This is Democrat political lawfare and a witch hunt at a level never seen before.”