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Donald Trump faces a "devastating" financial hit if he is found culpable under New York Attorney Letitia James' $250 million fraud lawsuit because it could severely curtail the former president's ability to do business, a real estate lawyer and analyst has told Newsweek.
James has long been investigating allegations that Trump and his real estate business, The Trump Organization, over claims the company inflated or undervalued the value of a number of the former president's assets and properties to obtain benefits such as better bank loans and reduced tax bills between 2011 and 2021. The former president has frequently denied any wrongdoing in connection to James' case.
A civil trial to hear the fraud allegations is set to begin on October 2. On Wednesday, James requested that New York Supreme Court Justice Arthur Engoron resolve the case in a summary judgment, rather than allowing it to go to trial. In her filings, James argued that the "undisputed evidence" her office has against the former president means that a trial is not required.
As well as a potential fine of up to $250 million for allegedly trying to defraud financial institutions, James and her office are also seeking Trump and his two children, Donald Trump Jr. and Eric Trump, be barred from running business operations in New York. The former president's eldest daughter, Ivanka Trump, was dismissed from James' lawsuit in June due to statute of limitations for most of the allegations against her.
Andrew Lieb, a real estate lawyer and legal political analyst, told Newsweek that Trump losing his civil suit by James is "looking more and more likely" after the attorney general moved for a summary judgment in the case.
"A win in this case would do a lot of things to all the defendants, such as restrict their ability to participate in real estate transactions and get loans while requiring a ton of disclosures and corporate red tape, but most importantly, it would permanently bar Donald Trump from serving as an officer or director of any New York business and make him liable for approximately $250 million plus prejudgment interest to the State of New York," Lieb said.
"That is simply a devastating result for a man whose business revolves around New York City and who relies heavily on leverage from loans to do business on an ongoing basis."
Trump's lawyers have requested that Judge Engoron throw out the entire case while citing the same arguments that saw an appellate court remove Ivanka Trump from the suit because of the length of time involved in the claims against her.
However, corporate law attorney Tre Lovell disagreed with Lieb's assessment. Lovell suggested that James may not be successful in her fraud lawsuit, and even if she were, the impact would not hurt Trump financially in any significant way.
Lovell said that a judge may agree that Trump's decade-old transactions have passed the statute of limitations, and it would be hard for James to successfully bar Trump from operating businesses in New York.
"Everyone has a constitutional right to pursue their livelihood, and preventing someone from doing business in a particular state or jurisdiction would be draconian and very unlikely," Lovell told Newsweek.
"These claims are not based on defrauding consumers or the public at large whereby Trump would be considered a threat to society. Rather, they are based on private transactions between Trump and financial organizations and have no effect on anyone else's lives.
"Trump is not dependent on New York as his business empire has extended beyond New York and into Florida, Illinois, Scotland, Ireland, Dubai and many other places," Lovell said. "Since his presidency, Trump's long-term business interests have aligned more with the red parts of the country where he is popular. If he needs to shift more business away from New York state to states such as Florida and Texas, he can do that and reap the benefits."
Lovell added that Trump could continue to rely on donations and money from his loyal supporters to help with his ongoing legal issues, even if the upcoming trials damage his chances of re-entering the White House.
"Trump's business empire lives on apart from his political fortunes. If Trump loses in 2024, he will still remain a revered figure for tens of millions of Americans," Lovell said.
"They will continue to want to stay at his resorts, play at his golf courts, read his books, attend his speeches and watch him on television. The last two years have proven that even when he is defeated politically, he still maintains his appeal to a large section of the country."
In her request for a judgment summary, James detailed numerous examples of where Trump allegedly falsely listed the value of his properties and net worth in annual statements of financial condition.
This includes over-valuing his Mar-a-Lago home in Florida by potentially hundreds of millions of dollars on the basis it could be developed for residential use, ignoring that its valuation must be restricted to a social club.
Trump also allegedly over-valued his triplex apartment by between $100 million and $200 million over a four-year period based on claims it was nearly 30,000 square feet in size, when it was actually 10,996 square feet.
About the writer
Ewan Palmer is a Newsweek News Reporter based in London, U.K. His focus is reporting on US politics, and Florida ... Read more