In a major victory for New York Attorney General Letitia James, a judge on Thursday approved the appointment of a special monitor to oversee the Trump Organization’s financial statements and reports.
The ruling by Manhattan Supreme Court Justice Arthur Engoron also barred the company from transferring any non-cash assets without notifying the court and James’ office in advance.
James has battled for a monitor, arguing that Trump is likely already siphoning off assets in the wake of her lawsuit filed in September accusing Trump, his company and his three eldest children of $250 million in fraud.
The suit accuses the Trumps and the Trump Organization of “staggering” fraud by a scheme of vastly overvaluing assets to hoodwink banks and obtain loans.
The day James filed the case, the Trump Organization created another company, called Trump Organization II, incorporated in Delaware, according to James’ office, which argued it was an attempt to shield assets.
Engoron’s written order said the appointment of an independent monitor was justified given the “persistent misrepresentations throughout every one of Mr. Trump’s [Statements of Financial Condition] between 2011 and 2021.”
The monitor would “ensure there is no further fraud or illegality that violates” the state law, Engoron wrote.
He said in his ruling that evidence of fraudulent valuations by Trump and his businesses was “more than sufficient” to indicate that James is likely to prevail in her lawsuit, which is seeking strict limits on the Trump businesses’ activities and a ban on the Trumps from serving as officers of any New York corporation.
Engoron’s ruling came a day after Trump filed his own lawsuit, peppered with attacks and mangled sentences, in Florida against James, accusing her of “trespassing” on his “right to privacy” and launching a “crusade” to seize his “empire.”
“As a private company, nobody knew very much about the great business that then-businessman Donald Trump had built but now it is being revealed by James and much to her chagrin,” the lawsuit states.
“The continuing witch hunt … continues,” the lawsuit argued.
Trump’s suit claims a “trust” behind the Trump Organization is “governed by Florida law” and untouchable by James.
James appeared to play the suit to her advantage, reportedly alerting Engoron in a letter Thursday that it was another indication the former president was “attempting to shield key documents governing the structure of his business conglomerate, and ownership of his business assets from review,” The New York Times reported.
A number of Trump’s longtime legal advisers staged a failed “intervention” in a bid to block his “tirade” lawsuit from being filed, according to the Times.
Advisers warned the Florida attorneys that the suit was “frivolous” and doomed to fail, sources told the Times. The general counsel of the Trump Organization even warned that they could be charged with malpractice for filing the suit, the newspaper reported.
A spokesperson for James dismissed Trump’s lawsuit in a statement noting that “multiple judges have dismissed Donald Trump’s baseless attempts to evade justice, and no number of lawsuits will deter us from pursuing this fraud. We sued Donald Trump because he committed extensive financial fraud. That fact hasn’t changed.”
As for Engoron’s ruling, James said in a tweet: “No matter how powerful you are, everyone has to play by the same set of rules.”