A Manhattan judge on Thursday gave the thumbs-up to the New York attorney general’s request for a watchdog to babysit the Trump Organization’s business dealings.
State Supreme Court Justice Arthur Engoron said he would appoint an independent monitor to oversee former President Donald Trump’s real estate company until the resolution of state Attorney General Letitia James’ lawsuit. He also ruled that the Trump Organization must get court approval before selling or transferring its assets out of state.
Engoron rejected arguments from Trump’s lawyers claiming a monitor’s appointment would send a threatening message to New York’s real estate sector. Defense lawyer Chris Kise had argued that it wasn’t the attorney general’s job to “police interactions between sophisticated counterparties” and that a monitor would represent “extraordinary interference” in private enterprise by the government.
Engoron disagreed, finding that failure to grant the attorney general’s request would be a disservice to the public given the Trump Organization’s “propensity to engage in persistent fraud.”
“New Yorkers derive enormous economic and other benefits from all the money coursing through the veins of Wall Street and real estate,” wrote Engoron. “Our executive, legislative and judicial institutions are obligated to ensure that financial transactions are conducted truthfully, not fraudulently.”
The judge said the monitor was the “most prudent” mechanism to stop further fraud as the case plays out in light of “persistent misrepresentations throughout every one of Mr. Trump’s” financial statements between 2011 and 2021.
James’ lawsuit against Trump, his adult children and his business alleges a longstanding company practice of lying about asset values to banks, lenders and tax authorities for financial gain. It accuses senior executives of misstating the value of skyscrapers, golf courses and other assets by hundreds of millions of dollars and claims the lies extended to Trump’s personal net worth, which James said he misrepresented by “billions.”
Engoron’s ruling came after he heard lengthy arguments from lawyers for Trump and the AG in lower Manhattan. James’ office said the lawsuit had not stopped or slowed ongoing fraud at the company.
As the Trump Organization has found itself embroiled in numerous legal battles, the company in recent months has sold a hotel in Washington, formed a second same-name company in Delaware and filed a notice of a lawsuit in Florida seeking to prohibit James from exercising oversight on the Donald J. Trump Revocable Trust.
The fund Trump doesn’t want James to see, which owns the Trump Organization and all of its entities, also contains his private estate plan and decisions regarding the disposition of his assets upon his death, according to his lawsuit.
In response to the ruling, Kise said it sought to protect banking institutions that had “made millions off of these lucrative transactions.” He said the case was based on “nothing more than gross exaggeration of standard valuation differences common in complex commercial real estate financing transactions.”
Trump described the decision as “radical tyranny.”
“A puppet judge of the New York attorney general and other sworn enemies of President Trump and the Republican Party has just issued a ruling never before seen anywhere in America. It is Communism come to our shores,” he said.
“Businesses will be fleeing New York, which they already are, for other states and other countries.”
James celebrated Engoron’s ruling and said it hamstrung Trump and his companies from continuing “the extensive fraud that we uncovered” in a three-year probe.
“Time and time again, the courts have ruled that Donald Trump cannot evade the law for personal gain,” said James. “No number of lawsuits, delay tactics or threats will stop our pursuit of justice.”
In a parallel criminal case, the Trump Organization is on trial in Manhattan Supreme Court, charged with criminal tax evasion related to untaxed company perks valued at over $1.7 million. The two Trump entities have pleaded not guilty.