Trump Committed Fraud by Overstating Asset Value: Judge

Donald Trump and his sons Eric and Don Jr. committed fraud by inflating the value of the Trump Organization's real estate and financial assets over the years, New York Judge Arthur Engoron ruled Tuesday. The decision is a setback for the former president ahead of a civil trial set to begin Monday.

New York State Attorney General Letitia James

has accused Trump and his two eldest sons of business fraud, alleging they submitted "grossly inflated" figures to banks and insurers. The lawsuit alleges they lied to tax preparers, creditors and insurers for years, using a scheme that regularly misrepresented the value of the organization's assets to enrich themselves.

Trump's attorneys

asked the judge to dismiss the case before trial, providing what is called a summary judgment in his favor. James also asked for a summary judgment finding Trump liable before the trial began, and the judge sided with the attorney general.

James demands

paying $250 million in fines and removing Trump and his sons from running the family real estate company, the Trump Organization.

James alleges that Trump and his associates submitted "grossly inflated" figures to banks and insurers every year from 2011 through 2021 "to obtain and maintain loans and insurance on more favorable terms." They are alleged to have fraudulently inflated Trump's net worth by billions of dollars, resulting in "hundreds of millions of dollars in illegally obtained savings and profits." James claims Trump's overstatement of assets ranged from $1.9 billion to $3.6 billion a year.

Trump, the front-runner for the Republican nomination for the 2024 presidential election, dismisses the case as a "witch hunt," calling James, who is a Democrat and African-American, a "racist." In January, the Trump Organization was fined $1.6 million by a New York judge in a tax and financial fraud case. Trump, 77, who has been impeached twice, also faces federal criminal charges related to mishandling classified documents and a plot to try to overturn the 2020 election results. He also faces state charges related to alleged hush money payments in New York and pressuring state officials to overturn Joe Biden's victory in Georgia's presidential election. Trump was also found liable in a civil lawsuit in May for sexually assaulting a magazine columnist in 1996 and defaming her last year.