Donald Trump's business empire at risk following fraud ruling
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Donald Trump's business empire faces, quote, "great risk" after a ruling this week. A judge found the former president committed widespread fraud by overvaluing his properties by billions of dollars. If the judgment is upheld, it could end the ability of Trump and his family to do business in New York. NPR's Brian Mann reports from New York City.
BRIAN MANN, BYLINE: The ruling issued by New York State Judge Arthur Engoron found Trump and his associates, including sons Donald Trump Jr. and Eric Trump, inflated the value of properties for years. Luigi Zingales is a professor at the University of Chicago Booth School of Business.
LUIGI ZINGALES: What is pretty remarkable is the level of overvaluation that Trump portrayed in a lot of his businesses.
MANN: The ruling validates a lawsuit filed by New York Attorney General Letitia James claiming Trump inflated his assets by more than $2 billion. Zingales says those actions now put Trump's businesses in peril.
ZINGALES: So I think that the real impact comes if - is taken away the license to operate in the state of New York.
MANN: In his ruling, Judge Engoron did just that - canceling certificates, the state licenses that allow many of Trump's businesses to operate in New York. Experts say this kind of punishment appears unprecedented for an enterprise of this size and complexity, and it's not yet clear how this will play out. Engoron has said he'll give additional guidance on his ruling soon. But experts say Trump could be forced to liquidate prized assets here in New York, including Trump Tower and another iconic building at 40 Wall Street.
JOHN COFFEE: Oh, he's greatly at risk.
MANN: John Coffee, a business law professor at Columbia University, says even if the court allows Trump to keep some of his business licenses, the former president faces a fine of up to $250 million.
COFFEE: He also has the possibility of fines that he wouldn't be able to pay off without selling some of these assets quite independently of the order rescinding the business certificates.
MANN: This week's ruling also granted broad new authority to New York Attorney General James to oversee the Trump family's businesses. Will Thomas is an assistant professor of business law at the University of Michigan.
WILL THOMAS: It's a New York statute that's specifically designed for the attorney general to sort of police bad business behavior in the state of New York. That's a hugely consequential action all by itself.
MANN: Trump has long described Attorney General James, a Democrat, as a political nemesis. On social media this week, Trump blasted this fraud ruling as part of a legal and political witch hunt. Speaking today outside the Trump Building on Wall Street, some people were sympathetic to his claim. Ashley Davis lives here in New York City.
ASHLEY DAVIS: So I believe Donald Trump did intend on being a good businessman, and in the scuffle, it winded up turning into fraud and being a misunderstanding.
MANN: Trump has paid millions of dollars to settle fraud cases in the past linked to his now-defunct charity and Trump University. Last year his businesses were found guilty of 17 criminal charges linked to tax evasion. A woman named Grace, visiting from Massachusetts, declined to give her last name because she said she fears her views could affect her livelihood. She said none of Trump's legal troubles affect her fondness.
GRACE: I believe he's a businessman. I think that he puts America first. I think that there is a bias.
MANN: Trump's attorneys have promised to appeal Judge Engoron's ruling. Legal experts point out many of Trump's arguments, while appealing to some voters, haven't gained traction in courtrooms. In this case, Trump has claimed overvaluing properties is a common practice in New York's real estate industry. Thomas, the business law professor at the University of Michigan, says that's not a strong defense.
THOMAS: Telling a police officer, I know I was speeding but so is everybody else - that doesn't get you off the hook.
MANN: Yesterday Trump lost another appeal designed to delay the next fraud trial scheduled to go forward next week. That trial will examine additional allegations against Trump and his associates. Brian Mann, NPR News, New York. Transcript provided by NPR, Copyright NPR.
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