New York – The Judge’s Hearing a massive lawsuit for civil fraud versus former President Donald Trumphis businesses and three of his adult children on Thursday ordered the appointment of a comptroller with sweeping powers to oversee all business dealings related to Trump.
Acting Manhattan Supreme Court Justice Arthur Engoron made the decision after hearing arguments from the New York Attorney General’s Office, which filed the complaint and requested the appointment, and a lawyer for Trump, who has said the Attorney General lacked the authority and legal standing to seek a prior injunction naming the monitor and pursuing the lawsuit.
“The defendants are wrong,” Engoron wrote, which Trump’s legal team unsuccessfully sought to remove from the hearing.
Engoron’s ruling temporarily bars Trump Businesses from selling, transferring or disposing of non-cash assets without first providing 14 days written notice to the attorney general’s office and the court. It also orders the appointment of a monitor to ensure compliance with the order.
Trump Businesses must give the Comptroller access to financial statements, statements of financial position, and “full and accurate descriptions of the structure and of the liquid and illiquid holdings and assets of the Trump Organization” and its subsidiaries and affiliated companies, ordered the trial court judge.
Companies must notify the Comptroller at least 30 days in advance of any planned reorganization or restructuring of the Trump Organization. Engoron has set a Nov. 10 deadline for submitting up to three monitor candidates, each from state officials and Trump attorneys.
“This court finds that the appointment of an independent monitor is the most prudent and closely tailored mechanism to ensure that there is no further fraud or illegality… pending the final determination of this action. “, wrote Engoron.
His ruling added: “Defendants have not submitted an iota of evidence or an affidavit from anyone with personal knowledge refuting” the Attorney General’s “comprehensive showing of persistent fraud.”
The decision will certainly be appealed by Trump. Barring a successful appeal, the decision marks a major defeat for Trump and a preliminary victory for the state in the September trial filed by New York Attorney General Letitia James, a Democrat who has frequently clashed with Trump.
“Today’s decision will ensure that Donald Trump and his companies cannot prosecute the vast fraud that we have uncovered,” James said in a statement. “No amount of lawsuits, delay tactics or threats will stop our pursuit of justice.”
Christopher Kise, an attorney for Trump’s business entities, said in an emailed statement “this unprecedented order effectively takes control of the financial affairs of a highly successful private empire based on nothing more than a gross exaggeration of common standard valuation differences in complex commercial real estate”. real estate financing transactions.
He also argued that James had “extended the limits of his authority to set a very dangerous precedent” that will affect other businesses.
Trump, in a statement released on his Save America political action committee, called the decision “communism that has come to our shores.”
The lawsuit argues that Trump was part of a 10-year scheme “that grossly inflated” his personal net worth by billions of dollars, then used the higher values ”to trick banks into lending money to the public.” Trump Organization on more favorable terms than otherwise were available.”
The alleged actions violated New York laws and likely saved Trump, his company and his family more than $150 million from 2011 to 2021, the complaint says.
James’ office is seeking $250 million in penalties and an order barring Trump and his children from holding executive positions at any New York businesses.
The Trumps’ lawyers say there was no wrongdoing.
Lawyers for both sides laid out their positions for nearly three hours Thursday in a sometimes heated hearing before Engoron.
Kevin Wallace, one of the top lawyers in James’s office, argued that the appointment of a monitor and other measures were necessary to stop alleged “ongoing fraudulent activity” by the Trump Organization.
He said the recent creation of the Trump Organization II required a legal block preventing the new organization or other entities from receiving financial transfers from long-existing Trump businesses. Such transactions could frustrate efforts to enforce the $250 million in penalties demanded by the lawsuit, Wallace said.
Wallace also cited reports of a major asset removal movement since James filed the civil lawsuit. The Trump Organization is reportedly moving sell its rights to the Trump International Hotel in Washington, DCsaid Wallace.
And he cited a lawsuit filed Wednesday by Trump’s attorneys against James in Florida state court. The filing, replete with criticism of James, argued that his office lacked jurisdiction to seek internal details about a Florida-based trust that holds all of Trump’s businesses on the former president’s behalf. Asset has already lost a federal lawsuit to end James’ investigation.
This new lawsuit by Trump is intended to “prevent visibility” into the trust’s decisions and transactions, making it difficult for James’ office to detect potential ongoing or future fraud, Wallace said.
A court-authorized monitor would resolve potential financial questions about Trump’s businesses, Wallace said, adding that the monitor “would not interfere with the day-to-day operations of the Trump Organization.”
However, Kise, a Florida-based attorney, argued that appointing a monitor represented an extraordinary step not supported by any evidence.
He argued that James did not have the legal standing to win such a nomination, particularly until legal proceedings had taken place over the accuracy and merits of the civil fraud allegations.
No effort was made to avoid the penalties that would be imposed if James won the case, Kise said. Two of Trump’s real estate properties in Manhattan, including Trump Tower, are collectively worth more than $250 million and “are going nowhere,” he argued.
Kise noted that major banks and insurance companies involved in Trump-related real estate development projects have never complained or lost money on loan deals they made with the Trump Organization.
He also argued that James’ office misunderstood the nuances and intricacies of the loan agreements which he said were “negotiated by experts on both sides”.
“This is a private dispute, and the private parties have not seen fit to complain,” Kise said. “We view this as a fabricated grievance bill.”
If a comptroller were appointed, “then every business in New York State must be very concerned” about a “similar nationalization of a private company,” Kise said.
Engoron, who questioned the lawyers during closing arguments on Thursday, is the judge who issued a contempt order against Trump and fined him over $100,000 for not cooperating with subpoenas for James’s investigation.
Late Wednesday, Engoron refused a request from Trump’s lawyers to transfer the civil lawsuit to the court’s business division, which typically handles complex corporate cases. Engoron said a previous denial of such a transfer by a New York supervisory judge was final and not subject to appeal.
The keys to the civil case against Trump:What to know about the New York Attorney General’s lawsuit against former President Donald Trump
