What We Know About a Judge’s Finding That Trump Committed Fraud
“New York’s attorney general sued the former president using a state law that grants her wide powers to pursue corporate wrongdoing.
When a New York judge ruled on Tuesday that Donald J. Trump had committed fraud by inflating his assets, he was effectively saying that the facts at the heart of the case against Mr. Trump would not be subject to debate during a trial that could begin Monday.
The civil case was brought by Letitia James, the New York attorney general, in 2022, and accuses the former president and his family business of lying to lenders and insurers about the value of their properties in order to secure more favorable terms. In a so-called summary judgment days before the trial, Justice Arthur F. Engoron of State Supreme Court in Manhattan found that they had done so — and that Mr. Trump was liable.
It is not a normal fraud case. Rather, it was brought under a powerful New York statute that gives the attorney general wide scope to investigate and prosecute corporate fraud. Because that law is being used, the questions that remain will be decided by Justice Engoron in a bench trial — one decided by a judge rather than by a jury.
What is a summary judgment?
In a civil case, either side, making an argument that some or all of the facts of a case are undisputed, can ask the judge for a decision without a full trial.
On Tuesday, Justice Engoron denied a motion by Mr. Trump’s lawyers for a summary judgment on certain issues, while granting a similar motion by the attorney general’s office.
Understand New York State’s Civil Case Against Trump
An empire under scrutiny. Letitia James, New York State’s attorney general, has been conducting a yearslong civil investigation into former President Donald Trump’s business practices, culminating in a lawsuit that accused Trump of “staggering” fraud. Here’s what to know:
In his ruling, he wrote that the annual financial statements that Mr. Trump submitted to banks and insurance companies “clearly contain fraudulent valuations.” He criticized the defense lawyers in strong language and even fined them for using arguments that he had already found were without merit.
While some of the language of the decision was harsh, granting a summary judgment before the trial was not extraordinary. But Justice Engoron also took the unusual step of canceling business certificates that allow some of Mr. Trump’s properties to operate.
John W. Moscow, a lawyer who has worked on fraud investigations for more than 40 years, said the dissolution of the companies — nullifying their very right to exist — was striking.
“Corporate dissolution as a sanction for misconduct is not something I’ve heard of,” he said.
What is the attorney general’s special power?
A state law that dates to 1956 gives the attorney general’s office expansive authority to investigate and punish corporations. It demands a lower burden of proof than other fraud cases. Crucially, prosecutors do not have to prove that the defendant intended to defraud — or that they hurt anyone financially in the process. Mr. Trump has said repeatedly that the banks he dealt with made money.
The New York attorney general’s office has relied on the law for years in high-profile cases, including against UBS, Exxon Mobil and Juul — as well as Trump University and the Trump Foundation, both of which paid millions of dollars to resolve the cases.
The statute allows investigators to issue subpoenas and gather information before filing a lawsuit, often resulting in many rounds of legal back-and-forth between competing sets of lawyers before a trial.
What comes next?
Mr. Trump has long derided the case as politically motivated and denied wrongdoing, and one of his lawyers, Christopher M. Kise, on Tuesday called Justice Engoron’s decision “outrageous” and vowed to appeal.
If the ruling stands, the case could have major repercussions for the Trump family. The attorney general’s office is seeking $250 million in penalties, and the judge could bar Mr. Trump and his sons from running any business in New York.
Mr. Trump’s lawyers have also sued Justice Engoron himself, arguing that he ignored an appeals court ruling in June that they contend should have gutted the case. They argued that the judge ignored a key deadline that should have disqualified much of the evidence. They have asked the appeals court to delay the trial and to order the judge to implement the June ruling.
The appeals court is expected to rule as soon as Thursday.”
Jonah E. Bromwich contributed reporting.
No comments:
Post a Comment