1. Home
  2. /
  3. Politics
  4. /
  5. Slideshow
  6. /
  7. New York’s Anti-Fraud Law...

New York’s Anti-Fraud Law Threatens Trump’s Real Estate Holdings

Donald Trump, former U.S. President, faces the unprecedented possibility of having his extensive real estate business empire “dissolved” due to alleged misrepresentations on financial statements submitted to lenders.

This legal action, if pursued, would place him among a select group of individuals subjected to New York’s powerful anti-fraud law, an outcome rarely seen in the state’s legal history.

Unique Case: Threat of Dissolution

Credit: BRUSSELS, BELGIUM – JULY 12TH, 2018: Press conference of Donald Trump, President of United States of America, during NATO (North Atlantic Treaty Organization) SUMMIT 2018 — Photo by gints.ivuskans

An analysis of nearly seven decades of civil cases under New York’s anti-fraud law reveals that this severe penalty has been imposed only a dozen times before, with each case involving evident victims and substantial financial losses.

In Trump’s case, the threat of dissolution looms despite the absence of clear victims and major losses, setting it apart from previous instances.

State’s Argument for Harsh Penalty

Credit: BRUSSELS, BELGIUM – JULY 12TH, 2018: Press conference of Donald Trump, President of United States of America, during NATO (North Atlantic Treaty Organization) SUMMIT 2018 — Photo by gints.ivuskans

Legal representatives for the state contend that principles of fair play in business alone justify a stern penalty in Trump’s civil trial.

However, even they have not proposed the liquidation of Trump’s businesses and properties as suggested by a judge.

A Concerning Precedent

Credit: DepositPhotos

Some legal experts express concerns that such an extreme measure could set a concerning precedent for future business dissolution cases.

Trump’s Business Practices

Credit: DepositPhotos

The heart of the matter revolves around financial statements submitted by Trump’s company, which had previously inflated his net worth figures sent to lenders, particularly Deutsche Bank.

Although this practice ceased approximately two years ago, errors and misrepresentations in other financial documents persisted.

Lack of Obvious Victims

Credit: Milwaukee, Wisconsin / USA – January 14th, 2020: 45th United States President Donald J. Trump held a Make America Great Again Rally at UW-Milwaukee Panther Arena and gave a powerful speech. — Photo by samael1986

In contrast to previous cases subject to this law, Trump’s situation lacks apparent victims and significant financial losses.

Past dissolutions often aimed to halt ongoing fraud and protect those who had suffered financial harm, such as customers who had lost money or purchased faulty products or services.

Impact on Trump’s Holdings

Credit: 12.07.2018. BRUSSELS, BELGIUM. Press conference of Donald Trump, President of United States of America, during NATO (North Atlantic Treaty Organization) SUMMIT 2018 — Photo by gints.ivuskans

The court’s decision remains uncertain, with potential implications for Trump’s holdings, including properties like Trump Tower, Mar-a-Lago, a Chicago hotel, and numerous golf clubs.

Whether “dissolution” refers to liquidating the entities controlling these properties or the properties themselves remains unclear.

Proposed Penalties

Credit: Donald J. Trump at CPAC Covention Protecting America Now in Maryland. March 04, 2023, Maryland, USA: The former President of USA, Donald J. Trump at the CPAC convention Protecting America Now — Photo by thenews2.com

New York Attorney General Letitia James has requested that Trump be prohibited from conducting business in the state and be required to pay $370 million, representing saved interest and alleged “ill-gotten gains.”

However, there has been no explicit request for property sales.

Judge’s Pending Ruling

Credit: Depositphotos

Judge Arthur Engoron is expected to issue a ruling in the coming weeks, addressing potential penalties, business bans, and the interpretation of “dissolution” in Trump’s case.

Legal Foundation: Executive Law 63(12)

Credit: DepositPhotos

New York’s anti-fraud statute, Executive Law 63(12), does not mandate intent to deceive or require victims to have suffered financial losses.

The attorney general must only demonstrate “repeated fraudulent or illegal acts.”

Historical Cases with Victims

Judge’s Gavel and Law Book: Symbols of Justice and Legality

Past cases subjected to this law typically involved victims and substantial losses.

For instance, a breast cancer nonprofit was dissolved for misusing donations, a private equity firm was closed down for defrauding investors, and a mental health facility was shuttered for embezzlement.

Trump’s Previous Encounters with the Law

Credit: 12.07.2018. BRUSSELS, BELGIUM. Press conference of Donald Trump, President of United States of America, during NATO (North Atlantic Treaty Organization) SUMMIT 2018. ” — Photo by gints.ivuskans

Trump’s Trump Foundation was closed in 2018 for alleged misuse of funds, and Trump University faced legal action in 2013 for misleading students.

Trump settled related cases for $25 million.

Varied Outcomes in Past Cases

Credit: DepositPhotos

Numerous cases in the legal history of 63(12) saw businesses continue despite substantial wrongdoing, including a porn site, an auto lender charged with usurious interest rates, and a river rafting company involved in a customer’s drowning.

The Stakes for Trump

trump spac deal
Credit: DepositPhotos

Donald Trump, a vocal critic of the legal proceedings, maintains that the case is politically motivated and without merit.

The outcome will significantly impact his extensive business holdings and future ventures.

Consideration of Larger Issues

Credits: DepositPhotos

The attorney general’s office argues that Trump’s case involves broader concerns beyond victim losses, including market distortions and the potential for “rich” individuals to evade accountability.

Potential Compromise

Credit: DepositPhotos

A suggested compromise involves appointing an independent monitor to oversee Trump’s operations for five years.

After this period, the court would assess whether to revoke business certificates or take further action.

Concerns of Legal Experts

Credit: DepositPhotos

While some believe Judge Engoron may revise the dissolution order, concerns persist. Critics warn that the desire to see Trump face consequences might overshadow the commitment to uphold the rule of law.

Conclusion

Credit: DepositPhotos

The impending ruling in Trump’s civil trial will not only impact his extensive real estate holdings but also set a precedent for the application of New York’s anti-fraud law in future cases involving businesses and potential dissolution.

Read More from The Stock Dork

Credit: Doug Mastriano and Florida Governor Ron DeSantis at Unite and Win rally in Pittsburgh, Pennsylvania. August 19, 2022, Pittsburgh, PA, USA: Turning Point Action’s Unite and Win Rally ft Gov Ron DeSantis and Doug Mastriano in Pittsburgh — Photo by thenews2.com

Passionate project manager with a knack for crafting engaging and content with a black belt in creativity, powered by coffee.