After a New York judge decided that the former president and certain of his businesses committed fraud over several years, Donald Trump may lose control of several significant properties in his extensive portfolio.
On Tuesday, Judge Arthur Engoron issued a judgment in a civil case against the former president, his sons, and the Trump Organization, finding that they had overvalued numerous of Trump’s properties and overstated his net worth to acquire loans and commercial transactions.
He ordered that some of Trump’s New York company licenses be revoked and that the entities that own some of his assets be turned over to independent receivers in what some have described as a “corporate death penalty”—a rarely utilized procedure.
“It means you are no longer a company, and the judge is appointing someone to take over the assets and distribute them as the court sees fit,” John Moscow, a former financial crimes prosecutor for the Manhattan District Attorney’s Office, told Business Insider.
Legal battle looms as Trump’s lawyers vow to appeal and dispute political motivations
He also stated that the order means Trump will continue to own the properties but will no longer be able to sell them or utilize them to acquire loans. If the court decides to sell them, the former president will get any excess funds after all obligations and liabilities are paid.
Trump’s lawyers have vowed to appeal the verdict, and both they and Trump have branded it as politically motivated.
“The decision seeks to nationalize one of the most successful corporate empires in the United States and seize control of private property all while acknowledging there is zero evidence of any default, breach, late payment or any complaint of harm,” Christopher Kise, a Trump attorney, told Newsweek.
It remains to be known if Trump would try to repurchase the properties if an appeal failed to reclaim possession and they were sold. Kise responded, “The full impact of the decision remains unclear.”
5 properties that Donald Trump could lose from fraud suit
1. Florida’s Mar-a-Lago Club
Among the properties named in the 35-page order was Trump’s Florida home and club resort in Palm Beach, where he frequently retreated during his presidency and did some government work.
He noted that while the Palm Beach County assessor had estimated the market value of Mar-a-Lago to be between $18 million and $27.6 million, Trump had priced it in files at between $426.5 million and $612.1 million—”an overvaluation of at least 2,300 percent.”
“A discrepancy of this order of magnitude, by a real estate developer sizing up his own living space of decades, can only be considered fraud,” Engoron said.
Trump and his sons opposed the local appraiser’s comparatively low valuation of the property, citing other, smaller properties in the vicinity that were on the market for more than double what had been stated. Trump Tower Triplex, Manhattan Walls coated in gold and marble, Trump’s 10,996 square foot penthouse apartment in his namesake skyscraper in New York City is where he spent election night in 2016, watching the results come in as he was crowned the 45thU.S.president.
According to the court order, Trump stated that the triplex was 30,000 square feet and that it had been overpriced “by a factor of three” at $327 million. Engoron agreed with New York Attorney Letitia James that the property was overvalued by $114-$2017 million.
“If the area is rounded or oddly shaped, it is possible measurements of square footage could come to slightly differing results due to user error,” he wrote. “Good-faith measurements would vary by as much as 10-20 percent, not 200 percent.”
2. Manhattan’s Trump Park Avenue
The residential structure near Trump Tower and Central Park in New York City was originally designed as a hotel and now houses 120 luxury flats and eight penthouse units. Engoron stated that several of its apartments were subject to rent limits under local law between 2011 and 2021.
The judge wrote that between 2014 and 2021, the Trump Organization treated the six units as if the rent restrictions did not apply to them, “inflating the value of each unit between as much as 700 percent (in 2014) and 64 percent (in 2021).”
3. Manhattan, Wall Street 40
According to the court decision, Trump controls the ground lease at the 72-story 1930s neo-Gothic property in New York City’s financial sector, where he leases luxury apartments right across from the New York Stock Exchange.
Engoron noted that despite various independent evaluations estimating Trump’s holdings there between 2010 and 2012 at $200-$220 million, Trump valued it at between $524.7 million and $527.2 million. The same independent assessor valued 40 Wall Street at $540 million in 2015, yet Trump declared it as worth $735.4 million that year.
4. New York’s Seven Springs Estate
The Seven Springs Estate is 200 acres of contiguous land in the New York towns of Bedford, New Castle, and North Castle, just north of New York City. “Notwithstanding received market values from professional appraisals in 2000, 2006, 2012, and 2014 valuing Seven Springs at or below $30 million, Donald Trump’s 2011 [Statements of Financial Condition] reported the value to be $261 million, and his 2012, 2013 and 2014 SFC’s reported the value to be $291 million,” Engoron said.
5. Scotland’s Aberdeenshire Golf Course
Trump reportedly valued his Aberdeenshire golf club in Scotland at $435 million in 2014. However, prosecutors claimed that this estimate was based on the premise that Trump had the right to develop 2,500 luxury houses on the land, despite only being approved to build less than 1,500 holiday flats and golf villas.
According to Engoron, Trump reduced the valuation by more than £164,000 ($199,000) in 2019 to reflect the lack of undeveloped properties on the property. Trump’s lawyers claimed that he had taken “optimistic views of potential future value,” but the judge dismissed their argument.”A hundred times that amount.”