A Manhattan judge said on Thursday he would appoint an independent supervisor “to make sure there is no further fraud” at former President Donald Trump’s company, limiting his ability to freely conduct transactions. change, sell assets and change the company structure.
Judge Arthur Engoron ordered an outside watchdog as he presided over a lawsuit in which the New York attorney general accused Trump and the Trump Organization of misleading banks and others about the value of money. of prized properties, including golf courses and hotels named after him.
Attorney General Letitia James said the company is continuing to engage in fraud and has taken steps to evade potential penalties from her lawsuit, such as incorporating a new entity that similar name – Trump Organization LLC – in September, just before the lawsuit was filed.
Engoron wrote in an 11-page order that Trump and the Trump Organization “have demonstrated a propensity to engage in persistent fraud” and designate an outside supervisor “as the most prudent and narrowly adjusted to ensure there is no further fraud or illegality” in the settlement of the case.
James, a Democrat, is seeking $250 million and a permanent ban on Trump, a Republican, from doing business in the state.
Trump, who called James’ investigation into him a “political witch hunt,” released a statement Thursday cutting Engoron as her “puppet judge.” He urged the courts to “do the right thing and stop this investigation.”
Engoron, in agreeing to appoint a custodian, prohibited the Trump Organization from selling or transferring any non-cash assets without 14-day notice to the court and James’s office. Named Supervisor will be responsible for ensuring compliance of the company and will immediately report any violations to the courts and attorneys of both parties.
The Trump Organization must also provide custodians with access to financial statements, asset valuations, and other disclosures, must provide a complete and accurate description of the company’s structure, and must notify notify the custodian at least 30 days of any possible restructuring, refinancing or asset sale, Engoron said.
It’s just the latest ruling Engoron has made against Trump or Trump-related interests.
While presiding over subpoena disputes brought in during James’ investigation, the judge, a Democrat, scorned Trump and fined him $110,000 after he was late to file documents. material, and forced him to sit to be deposed. In that testimony, Trump invoked Fifth Amendment protections against self-incrimination more than 400 times.
“Today’s decision sets a dangerous precedent for government interference in private business and is clearly an attempt to influence the outcome of the upcoming election,” the Trump Organization said. in a statement, calling the move “more political persecution by Letitia James.”
Trump Organization attorney Christopher Kise said Engoron’s order “effectively took control” of the company’s financial affairs and sent a message that “free enterprise is simply not welcome here.” New York”.
James’s senior enforcement adviser, Kevin Wallace, said at a hearing before Engoron’s decision that it was seeking “limited” oversight and did not want the supervisor involved in complexities. , such as how many rounds of golf or hotel rooms they booked in a given year.
“Our goal in doing this is not to affect the day-to-day operations of the Trump Organization,” Wallace said.
“The Trump Organization has a persistent record of not complying with existing court orders,” Wallace said. “The incumbent in court or the attorney general should not spend the next year watching over them, making sure assets are not sold or restructuring the company.”
Trump sued James in Florida on Wednesday, seeking to prevent her from having any oversight over the family trust that controls his company. Trump’s 35-page complaint reiterates some of the claims from his previously dismissed lawsuit against James in federal court in New York.
Wallace said at Thursday’s hearing that James’ office was looking to stop “the fraudulent activities taking place at the Trump Organization” and wanted safeguards so the company could not sell off assets. properties, such as Trump Tower and an office building at 40 Wall Street, could eventually be used to pay a potential lawsuit judgment.
Kise replied that the company “has no intention” of divesting those properties, which he conservatively believes is worth at least $250 million. “Trump entities are not going anywhere,” he added.
Kise argued that James’ lawsuit focused heavily on general, good-faith disagreements in the real estate industry. If banks that loaned Trump money feel he or the company has acted improperly, they will speak up, Kise said.
“No problem. There is no case here,” said Kise. “It is sad that we will have a recipient inserting himself into these complicated transactions instead of the owner of the property. this.”
Engoron questioned at least one aspect of Kise’s reasoning, asking him if there was really a “goodwill disagreement” when Trump claimed that his Trump Tower penthouse was twice as big. three times its actual size and worth more than $200 million.
As for the new Trump entity that drew interest from James’ office, Kise said the company – listed in New York company filings as Trump Organization II – had nothing to do with dodging penalties. potential from James’ lawsuit, but rather “consolidating issues that have arisen in other contexts. “
Kise did not provide further details. The Trump Organization’s payroll practices were among the issues being raised at the company’s Manhattan fraud trial, which was halted on Tuesday and is expected to resume on Tuesday. Monday after a witness tested positive for COVID-19.
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