Former President Donald Trump is headed to court Monday – with a weakened case in a $250 million lawsuit brought by New York Attorney General Letitia James.
Trump will fly to New York City Sunday evening after an Ottumwa, Iowa campaign event, and will spend the night at the Trump Tower, three sources confirmed to CNN.
"Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and to cheat the system, thereby cheating all of us," James said.
In an early indication of Judge Arthur Ergonon's view on the matter, he ruled that Trump submitted fraudulent valuations in order to obtain better loans and insurance terms.
He also named elder sons Donald Trump Jr., Eric Trump and the Trump Organization as those who inflated the company's net worth.
"This is a pretty catastrophic loss for former President Trump," said former federal prosecutor Andrew Cherkasky.
The ruling sets off a domino effect, immediately canceling all of Trump's business licenses in New York and restricting his ability to conduct business in the state going forward because of his "propensity to engage in persistent fraud."
Cherkasky says the ruling will effectively cause the Trump Organization to be disbanded in New York.
"You can't have these commercial enterprises operating within the state and not have a business entity to be able to engage in that business," Cherkasky said.
The judge listed several properties including Trump's own apartment in New York, 40 Wall Street, Trump Park Avenue, as well as out of state properties like golf courses and the Mar-A-Lago resort, as places where Trump overvalued his assets.
These were not small differences. According to the ruling, the former president claimed Trump Tower was triple the size and inflated its value by between $114 million and $207 million.
In his 35 page order, Ergonon wrote "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," and called Trump's actions one of someone in "a fantasy world, not the real world."
"The real estate that you find within the state of New York, that's going to be the sort of thing that's going to be very difficult for him to retain any control over and it looks like right now, it's going to essentially be liquidated and sold off," Cherkasky said.
Trump's lawyers argued he never committed fraud, and all transactions were profitable.
"That is not a valid legal issue," Cherkasky said. "The legal issue here is whether the business was effectively engaged in fraud in the documents that they were filing. And so it's really without regard for whether there was an injury to the companies that were loaning him money."
Trump's son Eric echoed the argument on social media saying they have run an exceptional company and that the family is being persecuted.
The case Monday will proceed for now onto other smaller issues — and with damages yet to be decided. Meanwhile Trump's lawyers are being penalized for their arguments before the judge. He sanctioned each $7,500, to be paid within the month. Trump's team sued unsuccessfully to get Ergonon off the case.
The former president, his eldest sons, former attorney Michael Cohen and former CFO Allen Weisselberg are all on the witness list.
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