Trump fraud ruling that cancels his business licenses is a ‘devastating’ blow for ex-president, experts say
A ruling by a New York judge that Donald Trump had committed fraud — leaving the fate of his business empire dangling in uncertainty — was a “devastating” blow for the former president, legal experts said Tuesday night.
If not successfully appealed, the decision will revoke the Trump Organization’s “business certificates,” — the corporate licenses held by Trump, his family, the Trump Organization and the LLCs it has — preventing the 77-year-old from conducting business in the Empire State until the revocation is rescinded.
The ruling amounts to a “corporate death penalty,” experts told Business Insider.
“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,” former financial-crimes prosecutor John Moscow told the outlet.
Manhattan Supreme Court Justice Arthur Engoron ruled that the businessman greatly exaggerated the value of his wealth to secure favorable terms with banks, which ultimately led him to worldwide fame — and into the White House.
Part of the ruling dictates that a receiver must be put in place to manage the process of the LLC’s getting shuttered.
Recommendations for the position must be given to the judge within 10 days.
“The decision today is a final decision that fraud is proven. The judge made this decision on the basis of Trump’s own documents. The evidence is Trump’s own documentation,” Andrew P. Napolitano, a former New Jersey Superior Court judge, told The Post.
“These are indisputable facts — the case is based entirely on the documents his lenders and his insurance companies produced.”
Another former Manhattan financial-crimes prosecutor, Diana Florence, told Insider that while Trump will still own his properties the ruling changes what he can do with them – sort of like owning a car but having a driver’s license revoked.
She also compared it to when someone dies but an executor runs the estate of the deceased person’s assets.
“Without a corporate charter, you can’t operate as a corporation,” Florence told the outlet. “You can’t get loans, you can’t apply for a government contract.”
The 2024 GOP presidential front-runner will likely appeal the ruling, which could cost him upward of $250 million in penalties that New York state Attorney General Letitia James is requesting — a heavy lift for the less-than-liquid Republican.
The penalties will be determined at a trial starting Oct. 3.
The receiver could theoretically continue to run things including collecting rent, paying taxes, bills and salaries until the business assets are sold.
While Trump would be entitled to those assets they will first go toward paying his debts, including any damages he may owe after the trial, Florence said.
“The receiver will be in charge, and they are answerable to the court. Trump can’t tell the receiver what to do,” she said, adding that the whole process could take years to resolve.
Trump could potentially have to sell off his assets in order to pay the lofty legal fees, which could hurt his ego more than his pockets, a source familiar with the former president said.
“He is really f–ked,” said the source, who asked to remain anonymous.
“This really hurts. He cares about the money. This is the beginning of the end for him. These cases are going to really hurt him. He’s been so blasé about this.”
It’s not immediately clear whether the certificate revocation would remain in place as the appeals case makes its way through the circuit, which could take months.
Little is preventing Trump from ignoring the ruling, however — he would be hit with monetary fines for conducting business in the interim, but wouldn’t see any criminal ramifications.
“A regular person would be very concerned about what happened today and they would probably start looking at new shareholders or selling or looking into perhaps transferring certain real estate into various different entities. I don’t think he’s going to be doing any of that,” said Alex Fisher, a corporate lawyer at Fisher and Fisher.
“And given this person’s propensity to challenge civil rulings or civil outcomes in practicality, it might not have as big of an effect as somebody thinks it might.”
If the decision is upheld after the appeals process runs its course, Trump will lose a major way to make money.
“It’s a devastating ruling,” said Bill Black, distinguished scholar in residence for financial regulation at the University of Minnesota Law School.
“If the decision is upheld, they have to liquidate the LLCs which actually hold the enormous bulk of the assets.”
