New York — Donald Trump may have his real estate enterprise “dissolved” for repeatedly misrepresenting financial statements to lenders in violation of New York's formidable anti-fraud legislation.
Trump's case stands unusual in an Associated Press examination of nearly 70 years of comparable cases: It's the first significant corporation threatened with a shutdown without visible victims and substantial losses.
Legal experts warn that if the New York judge imposes such a punishment in a final verdict in a few weeks, courts may find it easier to wipe out firms in the future. “This sets a horrible precedent,” said Adam Leitman Bailey, a New York real estate lawyer who sued a Trump apartment complex.
Executive Law 63(12) of New York does not need that misrepresentations or outright falsehoods deceive or cost money to prove fraud. However, AP's study of over 150 court database cases indicated that victims and damages were crucial in the dozen "dissolution" instances.
A 12-year-old breast cancer organization was shut down for wasting nearly all its $9 million in contributions to pay for director salaries, bonuses, and other costs instead of free screenings, research, and survivor support,
After defrauding hundreds of investors, a private equity business was shut down. A mental health center was closed for stealing $4 million from public funding and neglecting patients. A bogus psychologist who offered questionable treatments, a fake lawyer who claimed he could get kids into law school, and businesspeople who promoted financial advice but stole house titles were also shut down.
More firms may have dissolved than AP identified. Legal experts warn that some 63(12) instances are negotiated, dismissed, or not recorded, so they are not in databases.
One modest company that wrote term papers for college students was liquidated under the anti-fraud statute in 1972, but the AP discovered no victims or losses. In such case, the attorney general claimed the victim was “integrity of the educational process
Trump sent Deutsche Bank and others 11 years of allegedly exaggerated net worth assessments, which New York Supreme Court Judge Arthur Engoron found fraudulent last year. Letitia James, the New York attorney general who sued, claimed that lowered the ex-president's interest rates.
STAY TURNED FOR DEVELOPMENT