In a potentially devastating blow to former President Donald Trump, a state judge in New York ruled on Tuesday that he had committed persistent fraud by inflating his assets, effectively revoking his licenses to operate three of his flagship properties in the city: Trump Tower on Fifth Avenue, the Trump International Hotel, and a 72-story office building in the center of Wall Street. As a punishment, the judge ordered that Mr. Trump’s properties be handed over to a court-appointed chief executive, potentially Barbara S. Jones, who has been overseeing his business. While Mr. Trump is expected to appeal the ruling, legal experts believe that if it stands, it could spell the end of the Trump Organization as it currently operates.
The ruling was the result of a civil case brought by New York’s attorney general, Letitia James, who accused Mr. Trump of inflating his net worth by billions of dollars to secure favorable loans. The judge’s decision, which accused Mr. Trump of persistent and pervasive fraudulent conduct, was unusual and could have far-reaching consequences. Under the strictest interpretation of the ruling, it could force a sell-off of several properties and effectively shut down the Trump Organization in New York. Alternatively, it is more likely that the properties will be placed under the control of a court-appointed chief executive, preventing Mr. Trump and his adult sons from running the business without permission from the court.
Despite moving to Florida after his presidency, Mr. Trump still has numerous properties in New York. The attorney general’s office has used a little-known state law to pursue the case and seek remedies including the cancellation of business certificates needed to operate in the state. While Mr. Trump has denied any wrongdoing and attacked both the attorney general and the judge, legal experts believe that the case highlights the power of the law and could have significant implications for the former president’s business empire. The full consequences of the ruling and its potential impact on the Trump Organization will become clearer once the civil trial concludes.