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Trump could now be on the hook for up to $250 million for fraud

Donald Trump has been found liable for fraud in New York.

In the fading light, the golden facade of the tower’s ground floor glitters, black letters spelling out “Trump Tower” over glass revolving doors. Above the sign are large windows with golden panes; through them a massive US flag is visible. Three figures, blurs dressed in black, walk past the entrance.
Trump Tower in March 2023.
Leonardo Munoz/AFP/Getty Images
Nicole Narea covers politics and society for Vox. She first joined Vox in 2019, and her work has also appeared in Politico, Washington Monthly, and the New Republic.

Former President Donald Trump, two of his sons, and several of his companies have been found liable for fraud in state court for inflating the value of his businesses in New York.

As a result of the Tuesday decision, Trump could be on the hook for up to $250 million. The exact amount for which he will be held liable will be determined at trial expected to begin next week. The judge in the case, Justice Arthur F. Engoron, also nullified the business certificates of Trump and many of his allies, stripping the former president of control of his New York properties.

Trump’s lawyers have indicated that they intend to appeal Tuesday’s ruling, and Trump has also sued Engoron in a separate case that could be decided this week. But if those efforts are unsuccessful, Trump will have to proceed to trial.

If that trial happens, it will likely be brief. Tuesday’s ruling came as part of a summary judgment — a ruling on the facts of the case. Engoron’s decision means the court won’t need to consider further arguments at trial, because a review of Trump’s financial statements was enough to determine that he had repeatedly committed fraud. Trump asked the court to throw out the case and argued that the alleged fraud occurred too long ago for him to be held liable.

Justice Engoron didn’t buy it, summarizing Trump’s defense as a false claim that “the documents do not say what they say; that there is no such thing as ‘objective’ value; and that, essentially, the Court should not believe its own eyes.”

It’s a major early loss for Trump in the climax of New York Attorney General Letitia James’s multi-year investigation into his New York business dealings. James’s civil case is separate from the four sets of criminal charges Trump faces that span from New York to Georgia. Together, Trump’s civil and criminal cases will dominate much of the 2024 Republican primary calendar, and his legal troubles have consumed millions of dollars of his campaign funds.

There have been no indications thus far that a judgment against Trump in the New York attorney general’s case will hurt him politically, however. Though a majority of Americans wanted more transparency into his business dealings while he was running for president and in office, he’s never offered much — and he hasn’t suffered for it.

For years, he refused to release his tax returns, as had become the norm for presidents and presidential candidates, apparently shielding years of tax avoidance from public scrutiny before the records were leaked. He still won the 2016 election and now enjoys a historically large lead, one that has seemed to increase with each of his criminal indictments, in the Republican primary.

In a statement posted to his social network following the decision, Trump was dismissive of the ruling, writing he’d “done business perfectly,” and arguing that the case was a distraction from discussions of law and order. That message was followed by reminders of his massive primary lead.

Why Trump was found liable

James argued that the court had to consider only two “simple and straightforward” questions before ruling Tuesday night: whether Trump’s annual statements of his financial condition between 2011 and 2021 were false or misleading, and whether he and his associates invoked those statements repeatedly or persistently when conducting business transactions.

Engoron found Tuesday that the answer to both of those questions is “yes,” based on the evidence that James’s office presented. (The judge also fined Trump’s lawyers $7,500 each for rehashing arguments that he had previously rejected.)

James cited many examples of ways in which Trump inflated the value of his assets.

For example, she accused Trump of lying about the square footage of his Manhattan Trump Tower apartment — where his wife Melania and son Barron spent time during the early part of his presidency — to inflate its value by about $100 million to $200 million annually from 2012 to 2016.

She also argued that Trump valued his Mar-a-Lago estate in Florida as if he could sell it as a single-family residence, rather than as the social club that it is required to be under multiple restrictive deeds. And she claimed that he valued undeveloped land at his golf course in Aberdeen, Scotland, based on the assumption that he could construct and sell many more residential homes on that land than permitted by the Scottish government.

Engoron found these arguments persuasive, writing “In [the] defendants’ world: rent regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate into thin air … That is a fantasy world, not the real world.”