time for Donald Trump’s business in New York. On Monday, the former American president will have to face state justice which accuses him and his two sons of having inflated the value of his properties to deceive banks, insurers and others business partners.
The trial is due to open in the American megalopolis at the end of a complicated week for the populist who, on Thursday, failed in his attempt before an appeal court to postpone this legal deadline. He demanded the head of the judge responsible for presiding over the case, a judge who, in an order issued Tuesday, confirmed that the real estate magnate’s empire had indeed been built over several decades of “widespread fraud.”
In the process, Arthur Engoron – that’s his name – of the New York State Court in Manhattan also ordered the cancellation of the business licenses of Donald Trump and his children in the State of New York, a decision which threatens to collapse the ex-president’s empire, just like the image which contributed to his incredible rise, from the pages of the tabloids to the White House.
“Donald Trump is out of business,” David Cay Johnston, author of several scathing essays on the politician, wrote in the digital pages of DC Report this week. “Worse, the self-proclaimed multi-billionaire could soon find himself personally bankrupt, stripped of almost everything after engaging in years of bank fraud and insurance fraud.”
And he adds: “Barring a highly unlikely reversal from an appeals court, Trump’s business assets will eventually be liquidated since he cannot operate them without a business license. […] Besides, Trump’s chances of winning on appeal are between zero and nothing.”
The fate of the ex-president’s empire, hounded by the courts on a multitude of fronts since the start of the year, is not yet completely sealed. “But if control [sur l’empire] is taken away from the Trumps, this will mean that companies will no longer be able to be managed in such a way as to maximize their personal profits,” summarizes in an interview with Duty Lynnette Purda, professor of finance and specialist in commercial fraud issues at Queen’s University, based in Kingston, Ontario.
Inflate your assets
The legal setbacks of the politician, in search of a new dubbing of the Republicans to reconquer the White House, were set in motion by the Attorney General of the State of New York, Letitia James, who filed a civil suit against Donald Trump. His investigation of the case allowed him to uncover manipulations of annual financial statements of the empire of the former reality TV star in order to deceive banks and insurance companies.
According to her, the net asset value of her companies would have been inflated from 2.23 to 3.6 billion to obtain gains, such as more generous loans at lower rates. Mme James demands payment of a fine of 250 million. The example of Mar-a-Lago, in Florida, the iconic residence of the populist, is glaring: the courts value the property at 18 million dollars, while Trump’s real estate division speaks of it as a jewel worth a half -billion, or 25 times more. This week, the angry ex-president on his social network even pushed the overvaluation of this property even further: to 1.8 billion.
On Wednesday, he also directly attacked Judge Arthur Engoron who, according to him, “should be arrested” for what he described as “political hacking” unfairly targeting his person.
The judge’s order calls in detail for the dissolution of the legal entities used by Donald Trump to control his New York assets. It could ultimately force the ex-president to liquidate several of these properties, including the famous Trump Tower on Fifth Avenue in New York, his Westchester County golf club and the imposing office tower located at 40 Wall Street, in the heart of the city’s financial district.
Another possible scenario: his empire could be placed under judicial supervision, with the appointment of a general director responsible for managing its assets.
Regardless of the path that the courts will impose on Donald Trump, the real estate mogul is not out of the woods, believes Lynnette Purda, who recalls that “when assets are overvalued, particularly in real estate, there is has consequences for the debts and mortgages these assets support.”
“This should be concerning to him,” she said. You can easily imagine a scenario where lenders could ask for a large repayment [des prêts]which could put very strong pressure on Trump and his family who will then have to make significant funds available in a very tight time frame.
She adds: “Lending is all about trust and when that trust is no longer there, then the banks become nervous.”
The begining of the end ?
On Wednesday, on CNN, the former White House lawyer at the time of Donald Trump, Ty Cobb, assured that the ex-president had “no argument to defend himself” in the face of the civil trial brought against him by Letitia James, while speaking of “overwhelming evidence” accumulated against him by the New York justice system. For months, the man has been shooting at the populist whom he compares to a mafia boss.
Continuing its development Monday in a New York court, the legal proceedings brought by Letitia James will be the first to lead to a trial. A first milestone on a long road traced by American justice for Donald Trump in the coming months.
The former president will have to go through several more courts for seeking to overturn the result of the 2020 vote in Georgia, for inciting an insurrection against the Capitol on January 6, 2021, and for illegally retaining and refusing to return to the State of secret documents at his private residence in Mar-a-Lago, after his departure from the White House. Among others.