THE TRUMP ORGANIZATION IS PARTIALLY RELIEVED FROM LETITIA JAMES’S CORRUPT CIVIL ACTION, BUT REAL JUSTICE AWAITS A FURTHER APPEAL
INTRODUCTION AND ANALYSIS
It appears that a few Justices of the Appellate Division, First Department, an intermediate appellate court within the New York legal structure, may have read my blog on these issues from September 2024. Not likely; however, my reasoning was tracked by all of the Justices on the applicability of the Eighth Amendment’s Excessive Fines Clause and some of the Justices on the improper use of New York’s Executive Law 63(12), as well as the fact that the action itself was time-barred by the applicable statutes of limitation. In my opinion, the Justices who supported Judge Engoron’s biased and politically infected decision-making went out of their way to protect him and split the baby in a manner that cannot be sustained. The disgorgement penalty of in excess of 450 million dollars, with accruing interest, was vacated in its entirety, but the injunctive relief of placing the Trump Organization under a monitor and other “public interest” relief is in place. The New York Court of Appeals needs to review this and vacate this shame in its entirety on the following issues:
- Judge Engoron granted summary judgement without a trial on key issues such as intent and materiality even after enormous evidence from Trump’s team that there was no reliance by sophisticated banks and no intent to deceive given the broad disclaimers issued with the applications and the subjective nature of appraisals.
- The Executive Law at issue is a consumer fraud law not intended to cover these types of transactions wherein each party has the means to protect themselves.
- The action was statute barred and, in the whole, infected by Letitia James’ vitriolic statements vowing to “get” Trump.
ALL OF THE JUSTICES AGREED THAT THE DISGORGEMENT FINE WAS ARBITRARY AND EXCESSIVE—IT SHOULD HAVE BEEN A MIRROR OF ALL OF JUDGE ENGORON’S FLAWED ANALYSIS
The Court found a lack of foundation for a fine and penalty that was, in my view, designed to destroy Trump’s political viability and cripple the Organization as well as his individual finances. It is tantamount to saying, “Well, Judge Engoron paid no attention to the law in many aspects of the case, but we don’t mind.” Here is their reasoning on the Eighth Amendment:
“The remaining question is whether the disgorgement levied against the defendants in this case is an excessive fine barred by the Eighth Amendment. We believe that it is. A fine is excessive when it is grossly disproportional to the gravity of the defendant’s offense. Defendants’ attempt to deny the gravity of their actions with blithe claims that none of the counterparties were harmed ignores a core reality: a bank making a loan seeks not only repayment but also compensation for the possibility of default. However, while harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half-billion-dollar award to the State. It is a virtue of the statute that the Attorney General may act, as she did in this case, before a potential catastrophe occurs, to deter further fraudulent business behavior by defendants specifically and to police market behavior generally. However, having achieved these goals, the State is not entitled to compound its victory with a massive punitive fine.”
Two of the Justices felt that Judge Engoron improperly and hastily granted summary judgment without a trial to the Attorney General and that the Executive Law at issue was never designed for this purpose.
“The Attorney General may be absolutely correct that the SFCs contained a multitude of false statements certified as accurate, but presenting them, together with such a broad disclaimer, to a sophisticated party with the means and inclination to test their accuracy at least raises issues of fact about whether the SFCs were attempts to conceal falsity in an effort to commit fraud and whether the reasonable commercial lender or insurer would have been misled by the SFCs’ content. Cases holding that a disclaimer may not be a defense where the overall impression of the representations is misleading generally involve the consuming public, precisely the persons who are not presumed to stop to analyze but are governed by appearances and general impressions. Thus, the particular stature of the parties to the transactions, the particular environment in which these commercial transactions were consummated, the role of the SFCs and disclaimers in these transactions, and the motivations of the parties to the transactions, militate against a finding of actionable Executive Law § 63(12) fraud as a matter of law.”
Nonetheless, Judge Engoron needed to have this finding made quickly, denying the Trump Organization a trial on the key issues of intent and materiality, so he could injure Trump’s electability. His myriad misapplications of the law should have led to a complete vacatur of the entire proceedings’ findings and, at best, a new trial, which will never happen. Justice Friedman went the courageous route, hitting James on her abuses of discretion and misuse of the law for an improper purpose. Here are some of his findings:
“This action essentially turns section 63(12) on its head. The leniency with which the courts have construed the requirements for pleading and proving fraud … has been extended for the purpose of facilitating the use of the provision to prevent the exploitation of unsophisticated consumers, investors and small businesses—is here being used by Attorney General Letitia James to apply section 63(12) to a scenario to which that provision has never before been applied, or even thought to apply. Specifically, the Attorney General in this case has utilized the flexibility afforded her under section 63(12) to unwind complex financial transactions that were negotiated, face-to-face and at arm’s length, between a privately held real estate organization—that of defendant Donald J. Trump, the former president and current president—and ultra-sophisticated banks, insurance companies and government entities, which were advised by equally sophisticated lawyers, accountants, and other business professionals. The Attorney General complains, and Supreme Court found, that the statements of financial condition (SFCs) that President Trump provided to the counterparties in connection with the transactions at issue overvalued certain of his assets. However, each of the SFCs included written disclaimers advising, in no uncertain terms, that President Trump’s valuations of his various properties were estimates that had not been audited and were not beyond dispute. Each counterparty was further warned that it should do its own due diligence and draw its own conclusions about President Trump’s net worth, which each counterparty actually did, as it was obligated to do for its own protection as a matter of New York law. Moreover, President Trump paid all the principal, interest, and premiums he owed, and no counterparty ever registered any complaint about the deals before the Attorney General began publicly accusing President Trump of issuing fraudulent SFCs. Had any counterparty been dissatisfied with its transaction, it would have had the incentive and resources to seek redress for violation of its rights through private litigation—litigation that, according to the Attorney General, would have yielded scores of millions of dollars of damages in some cases. No such lawsuit was ever filed.”
He went on to further demolish James’ corrupt motives:
“I am not surprised that no precedent for the use of section 63(12) being made in this action can be found, as I doubt that the legislature, in adopting section 63(12), did so with the purpose of protecting the J.P. Morgans and John D. Rockefellers of the world from being taken advantage of by other business titans. Yet, this is essentially what this action does. As the amici have pointed out, this inherently selective use of section 63(12) to attack financial disclosures in private commercial transactions between sophisticated parties will discourage investors and businesses from doing business and making investments in New York and may prompt real estate investors to abandon the New York market. In view of these considerations, and given the constitutional concerns raised by a reading of the statute that invests the Attorney General with essentially limitless power to prosecute her political enemies based on transactions that did not threaten the public interest in any way, I would not construe section 63(12) to permit entry of judgment in favor of the Attorney General under these circumstances. In any event, given the commercial context of the transactions at issue and the sophistication of the parties involved, the Attorney General has fallen far short of proving conduct by defendants that had the capacity or tendency to deceive or create an atmosphere conducive to fraud.
Plainly, her ultimate goal was not “market hygiene,” as posited by Justice Moulton, but political hygiene, ending with the derailment of President Trump’s political career and the destruction of his real estate business. The voters have obviously rendered a verdict on his political career. This bench today unanimously derails the effort to destroy his business.”
CONCLUSION
Persons of reasonable sensibility know exactly what occurred in this case. Such transactions and the subjective nature of appraisals and market value occur on a daily basis in the financial and real estate markets. A trial-level judge in New York, who is, in actuality, a political hack, sought to derail the Trump candidacy and carry Letitia James’ water. It will not be lost on the New York Court of Appeals that she engaged in mortgage fraud and made many statements that establish that this was a tainted proceeding. She will fail, and she will fall.
Mike Imprevento
August 24th, 2025
