Trump, his company and three of his children ordered to face NY fraud suit

A judge denied a request by Donald Trump, his company and three of his children to toss out New York’s $250 million lawsuit accusing them of deceiving banks and insurers for years about the value of the former president’s assets — keeping the case on track for trial in October.
 

The Trumps’ motion to dismiss the civil fraud suit brought by New York Attorney General Letitia James was denied Friday by state court Justice Arthur Engoron.

It’s the latest in a string of rulings by the judge against the embattled former president as part of the case. On Friday, Engoron said some defense claims by Trump’s legal team — including that the lawsuit was part of a vast political “witch hunt” — were “borderline frivolous.”

“Here, sophisticated defense counsel should have known better,” Engoron wrote. The judge declined to sanction Trump’s lawyers as he’d threatened earlier this week, saying such an action was “unnecessary” because the court had “made its point.”

The ruling ensures that one of the biggest legal threats to Trump’s company will remain on voters’ radar as he continues to seek a return to the White House in 2024. He’s also facing federal probes into his handling of classified documents and his actions around the 2021 attack on the US Capitol.

James filed her suit in September against Trump, the Trump Organization, and his three eldest children, Donald Trump Jr., Ivanka Trump and Eric Trump — all senior executives at the company. James accused them of manipulating the value of Trump’s assets for years to inflate his wealth. The state claims the scheme helped Trump get better terms on loans and insurance, as well as lower his tax bill, resulting in at least $250 million in illegal gains.

“We look forward to receiving a full and proper review of our arguments on appeal,” Trump’s lawyer Alina Habba said in a statement.

Trump has denied wrongdoing, but Engoron has repeatedly rejected his primary defense arguments — that the suit is politically motivated, that James lacked legal standing to sue him, and that his company’s accounting firm used disclaimers that put banks and insurers on notice that his financial statements hadn’t been audited.

Trump argued in court filings that James “essentially manufactured a case even though there is no demonstration of any actual harm (to the public or anyone else).” The former president said in the filings that the “purported victims” are all “corporate titans fully capable of advancing their own considerable legal rights.”

Key Developments
 

• Trump’s New Delaware Entity Warrants Asset Restriction, NY Says
• Trump’s Company Will Be Monitored by Ex-Judge During NY Suit
• Trump Fraud Suit Will Stay Before Judge Who Held Him in Contempt
• Trump Deposition Day: Invoking the Fifth in Showdown With AG

“We sued Mr. Trump because we found that he engaged in years of extensive financial fraud to enrich himself and cheat the system,” James said in a statement. “Today’s decision makes clear that Donald Trump is not above the law and must answer for his actions in court.”

The ruling allowing the civil case to continue comes after two Trump businesses and the Trump Organization’s longtime chief financial officer were found guilty of tax-related crimes in a case brought by the Manhattan District Attorney in cooperation with James.

The state attorney general earlier won an injunction barring Trump’s company from disposing of or transferring significant assets during the case without giving advance notice to a court-appointed monitor — a remarkable level of outside oversight of the former president’s company. Trump has appealed that ruling.

Trump and his children were all deposed as part of the investigation that preceded the lawsuit, though the former president pleaded his Fifth Amendment right against self incrimination and didn’t answer any questions other than to confirm his name. 

Though her case is civil, James said she believed her investigation uncovered federal criminal liability and had referred the matter to Manhattan federal prosecutors and the Internal Revenue Service.