Wednesday Reads: Trump is Out of Business in New York

Good Day!!

Lady Justice, by Eduardo Rodriguez, 2017

All hell broke loose in Donald Trump’s life yesterday afternoon. New York Supreme Court Judge Arthur Engoron cancelled his business licenses in the state and ordered them into receivership. Legal experts call this the “corporate death penalty.”

From long-time Trump expert David Cay Johnston at DC Report: Judge Gives Trump Organization the Corporate Death Penalty.

Donald Trump is no longer in business.

Worse, the self-proclaimed multibillionaire may soon be personally bankrupt as a result, stripped of just about everything because for years he engaged in calculated bank fraud and insurance fraud by inflating the value of his properties, a judge ruled Tuesday.

His gaudy Trump Tower apartment, his golf courses, his Boeing 757 jet and even Mar-a-Lago could all be disposed of by a court-appointed monitor, leaving Trump with not much more than his pensions as a one term president and a television performer.

A New York State judge on Tuesday cancelled all of the business licenses for the Trump Organization and its 500 or so subsidiary  companies and partnerships after finding that Trump used them to, along with his older two sons, commit fraud.

Under the New York General Business Law you can only do business in your own name as a sole proprietor or with a business license, which the state calls a “business certificate.”  All of Trump’s businesses were corporations or partnerships that require business certificates.

The civil fraud case was brought by Letitia James, the elected attorney general of New York State.

The evidence and the issues were so clear cut, Judge Arthur F. Engoron ruled on Tuesday, that there was no reason to waste the court’s time trying them.

In a 35-page decision, Judge Engoron also excoriated Trump and his lawyers for making nonsense arguments, so badly misquoting legal cases that they turned the law upside down, and other legal misconduct.

The judge also sanctioned Trump’s lawyers $7,500 each for repeatedly advancing frivolous arguments. Judge Engoron’s decision can be appealed, but that may not have much chance of succeeding.

I give Trump’s chances of prevailing on appeal at somewhere between zero and nothing except perhaps on some minor procedural point, which you can be sure Trump will describe as complete vindication.

The summary judgement decision Tuesday was partial, however.

A non-jury trial before Judge Engoron next week will determine how much Trump will be fined for his years of bank fraud and insurance fraud.

Barring a highly unlikely reversal by an appeals court, Trump’s business assets eventually will be liquidated since he cannot operate them without a business license. Retired Judge Barbara Jones was appointed to monitor the assets, an arrangement not unlike the court-supervised liquidation of a bankrupt company or the assets of a drug lord.

Justice, by Pierre Subleyras

I thought this piece by Jose Pagliery at The Daily Beast gave the clearest explanation of the details of the case among the many that I read: Trump Basically Just Lost the New York Bank Fraud Case Before It Even Started. I’ll post some of it, but I’d recommend read the whole article if you have the time and interest.

Former President Donald Trump, his top executives, and heirs were declared completely liable of “persistent and repeated fraud”—and the real estate empire was unceremoniously stripped of its business licenses in New York—after a judge’s powerful ruling Tuesday ahead of a massive trial that seeks to hit them with more than $250 million in penalties for bank fraud.

And in a stunning development, the judge has already ordered the complete dissolution of the fabled Trump Organization–the tycoon’s pride and joy, the empire that made him famous and elevated him into the White House. The Trump Organization and its sister companies will be sent into receivership to be under the control of a court-appointed officer.

Even before the trial officially starts, the ruling handed New York Attorney General Letitia James a near total victory, meaning that next week’s trial will mostly focus on damages that could pulverize whatever is left of Trump’s many business entities and bank accounts.

In his 35-page opinion, Justice Arthur F. Engoron tore apart what he called the Trump family’s “bogus arguments” and obstreperous conduct. And he summed up the entire defense as “a fantasy world, not the real world.”

“In defendants’ world: rent regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land, restricts can evaporate into thin air… all illegal acts are untimely if they stem from one untimely act; and square footage [is] subjective,” he wrote.

Trump, several of his heirs, and top executives will now be fighting off accusations of bank and insurance fraud at a civil trial that’s scheduled to run from early October until late December. AG Letitia James seeks to punish them all for routinely lying about property values to score better deals. At trial, it will be up to Judge Engoron alone whether the Trumps will owe $250 million-plus in penalties, be prohibited from serving as executives, and have the company charters revoked.

Of course, Trump posted an idiotic statement on the decision to Truth Social. It’s reproduced in the article. A bit more on the case itself:

The judge’s ruling represents a significant setback for Trump by revoking his company’s authority to do business in New York, where the Trump Organization is headquartered and where Trump has major real estate interests. It also represents a victory for Attorney General Letitia James (D), who had asked that Engoron simplify the upcoming trial by deciding in advance that fraud was broadly committed so the state would need to prove only specific illegal acts.

On Tuesday, Engoron ripped the Trumps—and their lawyers—apart for dragging this on so long with legal arguments that wasted the courts time by repeatedly questioning whether the AG even had the authority to hold them accountable this way.

Justice, by Francisca Vogel

Those arguments “glaringly misrepresent” the law and trying them again and again “invoke the time-loop in the film Groundhog Day,’” the judge wrote, calling attempts to topple the case this way “pure sophistry.”

Engoron also made the pivotal decision to keep all of the AG’s lawsuit intact, concluding that all of the real estate deals in question are not too old for law enforcement to crack down on for bank fraud. He brushed off the Trumps’ attempt to whittle down the lawsuit ahead of a trial that could drain the wealthy family’s bank accounts.

The timing of this decision also throws a wrench into the Trumps’ Hail Mary play, in which they sued the judge directly and prematurely asked a state appellate court to intervene because he hadn’t yet made his decision on the statute of limitations—an oddly aggressive move that reeked of delay tactics. That higher court, the appellate division’s First Judicial Department, has yet to weigh in. Doing so now might be a moot point. As such, the trial appears to be set to start next Monday, as planned.

There’s still more from the Judge on Trump’s fraudulent behavior at the link. Pagliery tweeted from the New York courthouse this morning, where Trump’s lawyers were back arguing with the judge this morning. Here’s his latest article:

Jose Pagliery at The Daily Beast: Team Trump Prepares for Doom at New York Bank Fraud Trial.

On the heels of yesterday’s critical court ruling ordering the death of the fabled Trump Organization, lawyers for Donald Trump appeared in court on Wednesday to pick up the pieces and make sense of how this can possibly get any worse for the former president.

Huge sections of the Trump family’s real estate empire are having their business licenses revoked, and the Trumps are losing control of their companies to a court-appointed official. The trial set to start next week threatens to empty their bank accounts too.

Half a day after Justice Arthur F. Engoron’s Tuesday ruling, it’s evident the real estate tycoon and his lawyers still aren’t sure what will happen to Trump’s Monopoly board collection of buildings in Manhattan and elsewhere.

“Certain of the entities own physical assets, like 40 Wall Street and Trump Tower. Are those assets now going to be sold? Or managed under direction of the monitor?” Trump defense lawyer Christopher Kise asked the judge in court.

After privately discussing the matter with his law clerk, the judge declined to make a final decision “right now.” But the judge made clear an independent person will play a role in determining the fate of this multibillion dollar network of companies, giving both investigators and the Trump family extra time to jointly find an outside official who can oversee this while they’re wrested from the family’s control.

Engoron on Tuesday decided that New York Attorney General Letitia James already proved the Trump family routinely lied to banks by wildly inflating property values for years—the first of seven counts in the AG’s lawsuit. Each count alleges a violation of the state’s Executive Law § 63(12), which keeps corporations honest. In court today, Trump’s attorneys asked a question dripping with existential dread.

“What’s the point of the others?” Kise asked the judge. “I don’t know how many 63(12) counts you need. You’ve already granted relief, except for disgorgement.”

Kise was referring to the next punishment the Trumps might face, as state investigators want to seize $250 million-plus in profits that they obtained after faking asset values on business paperwork submitted to banks for loans.

La Justice, by Gee

This process is going to be fascinating. My guess is it will end up taking a long time before we know the final upshot. But as of now, Trump has been stripped of his identity as a successful businessman. That has to be deeply humiliating for him.

Trump whisperer Maggie Haberman and fellow New York Times reporter wrote about this: Ruling Against Trump Cuts to the Heart of His Identity.

Nearly every aspect of Donald J. Trump’s life and career has been under scrutiny from the justice system over the past several years, leaving him under criminal indictment in four jurisdictions and being held to account in a civil case for what a jury found to be sexual abuse that he committed decades ago.

But a ruling on Tuesday by a New York State judge that Mr. Trump had committed fraud by inflating the value of his real estate holdings went to the heart of the identity that made him a national figure and launched his political career.

By effectively branding him a cheat, the decision in the civil proceeding by Justice Arthur F. Engoron undermined Mr. Trump’s relentlessly promoted narrative of himself as a master of the business world, the persona that he used to enmesh himself in the fabric of popular culture and that eventually gave him the stature and resources to reach the White House.

The ruling was the latest remarkable development to test the resilience of Mr. Trump’s appeal as he seeks to win election again despite the weight of evidence against him in cases spanning his years as a New York developer, his 2016 campaign, his efforts to overturn his 2020 election loss and his handling of national security secrets after leaving office.

The authors note that, so far, none of the cases against Trump have seemingly hurt his campaign to win the presidency again in 2024.

Whether the effect of Justice Engoron’s ruling is any different remains to be seen. But his finding imperils both Mr. Trump’s public image and his business empire. The former president now faces not only the prospect of having to pay $250 million in damages, but he could also lose properties like Trump Tower that are inextricably linked to his brand….

In all of Mr. Trump’s recent legal travails, his typical tactics for self-preservation have largely failed him. When cornered, Mr. Trump has traditionally sought to bluster his way out of trouble, falling back on exaggerations or outright lies to escape.

These methods have served him well in the business and political arenas, where there is often little price to pay for bending the truth and where voters tend not to distinguish between gradations of prevarications. Those methods, though, have been much less effective so far in the courts, which operate according to strict standards of veracity and staid and sober rules.

In straightforward terms, Justice Engoron punctured Mr. Trump’s bubble of protective falsehoods about the way he conducted his business.

More Interesting Stories to Check Out

NBC News: The FBI is probing whether Egyptian intelligence played a role in Bob Menendez’s alleged bribery scheme.

Molly Jong-Fast at Vanity Fair: Let’s Not Sleepwalk Into Another Trump Presidency.

Amanda Marcotte at Salon: President Drink Bleach says what? Trump now claims he beat George W. Bush and Barack Obama.

CNN: Commander Biden bites another Secret Service agent, the 11th known incident.

The New Republic: The Sick, Racist Message Behind Why Trump Chose That Particular Gun Store.

The Hill: FCC chair proposes reinstating Obama-era net neutrality rules.

The Messenger: Trump Adds Two Attorneys to Criminal Defense Team.

The Daily Beast: UAW Leader Has No Desire at All to Talk to Trump in Michigan.

Have a great Wednesday everyone!!