Status: 30.09.2023, 04:45 a.m.
By: Tadhg Nagel
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Donald Trump is appealing his conviction for fraud. Is his real estate empire still lost?
NEW YORK – Although former US President Donald Trump has denied allegations that he and his company defrauded banks and insurers, the court's verdict was damning.
Judge Arthur Engoron ruled on Sept. 26 that Trump and his family business, The Trump Organization LLC, can be held liable for fraud. The cancellation of the company's business certificates was also ordered. The main trial, scheduled for 2 October, is therefore likely to be essentially limited to determining the level of punishment.
However, this decision that the former president's business fortune is built on rampant fraud and blatant lies could have even more far-reaching consequences. Michael Cohen, former lawyer and middleman of the ex-president, already sees Trump in New York de facto "out of business". The judge had "already determined that it was fraud," Cohen told CNN. In the same breath, he welcomed the pre-trial decision.
Is the end of the "fantasy world" imminent? Trump's favorite golf course could also be affected
Meanwhile, Trump's lawyers announced that they would appeal against the revocation of the licenses and the appointment of the bankruptcy trustees. They also want to challenge Judge Engoron's testimony that Trump and the executives live in a "fantasy world" in which they repeatedly and unlawfully overvalued real estate values and his personal assets in order to obtain favorable credit conditions and reduced insurance premiums. If the appeal is unsuccessful, the business empire on which the former reality TV host built his reputation as a successful business tycoon could soon collapse.
Donald Trump's real estate empire could soon collapse. (Archive photo) © IMAGO/Lamkey Rod/CNP/ABACA
The implosion could begin with the sale of the most prestigious properties, including Trump Tower in New York, as well as numerous golf courses and resorts in the United States. Trump's favorite club, Mar-a-Lago in Florida, could also be affected, as long as it is classified as a business operation and not as a primary residence. Trump had rejected on Wednesday the court's statement that the plant was worth $18 million. It is "worth 100 times more".
When dominoes fall, nothing can stop them - Devastating verdict against Trump
No matter how much the golf course actually costs, Trump's days as a real estate mogul may be numbered. "When the dominoes begin to fall in finance, it is basically impossible to save it," William Black told the British newspaper The Guardian. Black is a white-collar criminologist, corporate fraud investigator, and conducts research on financial regulation issues at the University of Minnesota. He helped expose the misconduct of the U.S. Congress in the Lincoln Savings and Loans scandal in the 1980s. At the time, financier Charles Keating had inflated the value of his company in order to defraud taxpayers of billions.
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These properties are even more damaged today because it has been possible to prove their massive overvaluation. If you find an honest broker or bankruptcy trustee, he will most likely sell the properties at a loss. And if you have a whole bunch of properties, you just have to do something urgent about the first one, and that's the one that gets discounted the most.
William Black to The Guardian
Black called Engoron's verdict "devastating" and believes insiders have an incentive to reveal more information once Trump loses wealth and influence. The Savings and Loan debacle has shown that it is enough to hire an honest manager. The employees would then come out with clues on their own. Trump was "greedy in a monumental and stupid way." He does not pay for the legal needs of his confidants, who are themselves on the verge of financial collapse. However, it is precisely these people who could let the ex-president go down.
"Not ingenuity, but audacity" is the key - Can Trump still stop the disintegration?
The key to this kind of fraud is "not ingenuity, but audacity," but Trump has always been too lazy to take action himself. "And now he has no control over the people who actually have to do the business. So now they are forced into thousands of discussions, first with this judge, now with this insolvency administrator," he said, "that can't work." As soon as action is taken against Trump's real estate, the liquidity with which Trump boasts is gone. This will result in a "domino effect on loan defaults and insolvencies".
David Cay Johnston, author of the Trump book The Big Cheat, also sees clear signs of this. On the website of the non-governmental organization DCReport, which he founded, he writes: "Donald Trump is no longer in business." Unless there is a "highly unlikely overturn by an appeals court," Trump's business assets are likely to be liquidated. Without business licenses, he could not continue to operate his company. "The various plots are likely to be sold at clearance prices and certainly not for the maximum price when the liquidation begins, probably after all legal remedies have been exhausted," Johnston said. (tpn)