The Trump Organization’s asset transfers and other operations will be supervised by an independent monitor, a Manhattan judge ruled Thursday, while the judge presides over an upcoming trial in a $250 million lawsuit brought by the New York attorney general that could cripple the company’s operations.
New York Supreme Court Justice Arthur Engoron ruled in favor of a request by Attorney General Letitia James to impose supervisory conditions on former president Donald Trump’s international real estate, golf and hospitality firm, which is based in Trump Tower on Fifth Avenue.
Under Engoron’s ruling, the company and the Trump family are barred from transferring or selling assets without giving two weeks’ notice to the court. The company must also pay for the monitor, whom Engoron will approve, and that person will oversee attempts to transfer assets and will screen any future reports of Trump’s net worth to financial and insurance institutions.
“This court finds that the appointment of an independent monitor is the most prudent and narrowly tailored mechanism to ensure there is no further fraud or illegality … pending the final disposition of this action,” the judge wrote.
Donald Trump, 3 of his children accused of business fraud by New York AG
Trump, as well as three of his adult children who have been executives at the company, were sued by James for their alleged misrepresentation of the value of Trump’s personal wealth. Tactics, according to the lawsuit, included toying with the value of properties and ground leases and presenting them to banks, lenders and insurance companies in annually prepared Statements of Financial Condition.
James said in a recent court filing that since the lawsuit was filed in late September, the company has “continued using practices they knew to be improper or fraudulent.”
Trump lawyer Chris Kise said in a statement that the corporate officials involved in transactions “were fully capable of negotiating complex agreements.”
The court order “effectively seizes control of the financial affairs of a highly successful private corporate empire based on nothing more than gross exaggeration of standard valuation differences common in complex commercial real estate financing transactions,” Kise said.
Attorneys with the attorney general’s office said Trump registered a new corporate entity called Trump Organization II, incorporated in Delaware, on the same day the lawsuit was announced — Sept. 21. Investigators think it was an attempt to skirt possible future restrictions on the Trump Organization’s business activities that the attorney general is seeking as relief in the case.
Criminal trial against Trump Organization begins as jurors are screened
In an Oct. 13 filing, Assistant Attorney General Kevin Wallace argued that the Trump Organization “now appears to be taking steps to restructure its business to avoid existing responsibilities under New York law.”
The monitor must supervise the company’s preparation of any financial condition reports that are used in the future to satisfy requirements with lenders. Many large loans require updated financial reports to maintain the terms of a deal. The Trump Organization owes one to Deutsche Bank for its outstanding Trump International Chicago loan, according to the attorney general.
The Trump Organization is on trial in a separate criminal case in Manhattan over an alleged 15-year tax fraud scheme involving compensation to high-ranking managers such as luxury cars and pricey apartments. In that proceeding, the organization’s longtime comptroller Jeffrey McConney had begun testifying this week but the trial was paused until Monday after McConney tested positive for the coronavirus.
Manhattan District Attorney Alvin Bragg, who is prosecuting the compensation case, is also still investigating whether to bring a criminal case against Trump for the allegedly fraudulent asset valuation practices.
New York Supreme Court Justice Arthur Engoron ruled in favor of a request by Attorney General Letitia James to impose supervisory conditions on former president Donald Trump’s international real estate, golf and hospitality firm, which is based in Trump Tower on Fifth Avenue.
Under Engoron’s ruling, the company and the Trump family are barred from transferring or selling assets without giving two weeks’ notice to the court. The company must also pay for the monitor, whom Engoron will approve, and that person will oversee attempts to transfer assets and will screen any future reports of Trump’s net worth to financial and insurance institutions.
“This court finds that the appointment of an independent monitor is the most prudent and narrowly tailored mechanism to ensure there is no further fraud or illegality … pending the final disposition of this action,” the judge wrote.
Donald Trump, 3 of his children accused of business fraud by New York AG
Trump, as well as three of his adult children who have been executives at the company, were sued by James for their alleged misrepresentation of the value of Trump’s personal wealth. Tactics, according to the lawsuit, included toying with the value of properties and ground leases and presenting them to banks, lenders and insurance companies in annually prepared Statements of Financial Condition.
James said in a recent court filing that since the lawsuit was filed in late September, the company has “continued using practices they knew to be improper or fraudulent.”
Trump lawyer Chris Kise said in a statement that the corporate officials involved in transactions “were fully capable of negotiating complex agreements.”
The court order “effectively seizes control of the financial affairs of a highly successful private corporate empire based on nothing more than gross exaggeration of standard valuation differences common in complex commercial real estate financing transactions,” Kise said.
Attorneys with the attorney general’s office said Trump registered a new corporate entity called Trump Organization II, incorporated in Delaware, on the same day the lawsuit was announced — Sept. 21. Investigators think it was an attempt to skirt possible future restrictions on the Trump Organization’s business activities that the attorney general is seeking as relief in the case.
Criminal trial against Trump Organization begins as jurors are screened
In an Oct. 13 filing, Assistant Attorney General Kevin Wallace argued that the Trump Organization “now appears to be taking steps to restructure its business to avoid existing responsibilities under New York law.”
The monitor must supervise the company’s preparation of any financial condition reports that are used in the future to satisfy requirements with lenders. Many large loans require updated financial reports to maintain the terms of a deal. The Trump Organization owes one to Deutsche Bank for its outstanding Trump International Chicago loan, according to the attorney general.
The Trump Organization is on trial in a separate criminal case in Manhattan over an alleged 15-year tax fraud scheme involving compensation to high-ranking managers such as luxury cars and pricey apartments. In that proceeding, the organization’s longtime comptroller Jeffrey McConney had begun testifying this week but the trial was paused until Monday after McConney tested positive for the coronavirus.
Manhattan District Attorney Alvin Bragg, who is prosecuting the compensation case, is also still investigating whether to bring a criminal case against Trump for the allegedly fraudulent asset valuation practices.
