Donald Trump is appealing his fraud conviction. Is his real estate empire still lost?
New York – Although former US President Donald Trump has rejected allegations that he and his company defrauded banks and insurers, the court’s verdict was devastating.
Judge Arthur Engoron ruled on September 26 that Trump and his family business, The Trump Organization LLC, could be held liable for fraud. The company’s business certificates were also ordered to be cancelled. The main proceedings scheduled for October 2nd are likely to be essentially limited to determining the sentence.
However, this decision that the former president’s business fortunes were built on rampant fraud and blatant lies could have even broader consequences. Michael Cohen, a former lawyer and intermediary for the ex-president, already sees Trump as effectively “out of business” in New York. The judge had “already determined that it was fraud,” Cohen told the US news channel CNN. In the same breath, he welcomed the pre-trial decision.
Is the “fantasy world” about to end? 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 receivers. They also want to challenge Judge Engoron’s statement that Trump and the executives lived in a “fantasy world” in which they repeatedly and unlawfully overvalued real estate values and his personal assets in order to obtain favorable loan terms and reduced insurance premiums. If the appeal fails, the business empire on which the former reality TV host built his reputation as a successful business tycoon could soon collapse.
The implosion could begin with the sale of the most prestigious properties, including Trump Tower in New York and numerous golf courses and resorts in the USA. Trump’s favorite club, Mar-a-Lago in Florida, could also be affected if it is classified as a business and not a primary residence. Trump on Wednesday rejected the court’s statement that the facility 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 start to fall in finance, it is essentially impossible to save it,” William Black told the British newspaper The Guardian. Black is a business criminologist, corporate fraud investigator and financial regulation researcher at the University of Minnesota. He helped expose U.S. Congressional misconduct in the Lincoln Savings and Loans scandal in the 1980s. At that time, financier Charles Keating inflated the value of his company in order to defraud taxpayers of billions.
These properties are now even more damaged goods because it has been possible to prove that they were massively overvalued. If you find an honest broker or insolvency practitioner, he will most likely sell the properties at a loss. And when you have a whole bunch of properties, you just have to do something urgently on the first one, and that’s the one that gets discounted the most.
Black called Engoron’s ruling “devastating” and believes insiders would have an incentive to reveal more information as Trump loses wealth and influence. The Savings and Loan debacle showed that it was enough to hire an honest manager. The employees would then come forward with information on their own. Trump is “monumentally and stupidly greedy.” He doesn’t pay for the legal needs of his confidants, who themselves are facing financial collapse. However, it is precisely these people who could cause the ex-president’s downfall.
“Not genius, but audacity” is the key – Can Trump still stop the disintegration?
The key to this type of fraud is “not genius, 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 handle the deals. So now they are forced to have thousands of discussions, first with this judge, now with this insolvency administrator, saying that this cannot work. As soon as action is taken against Trump’s real estate, the liquidity that Trump boasts of will disappear. This will result in a “domino effect in loan defaults and bankruptcies”.
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 he founded DCReport he writes: “Donald Trump is no longer in business.” Barring a “highly unlikely appeals court overturn,” Trump’s business assets will likely be liquidated. Without business licenses, he could not continue to operate his business. “The various properties are likely to be sold at fire-sale prices and certainly not for top dollar when liquidation begins, likely after all legal remedies have been exhausted,” Johnston said. (tpn)
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