A New York judge will allow an independent monitor to oversee Donald Trump’s business interests and has imposed restrictions on the Trump Organization’s assets pending a trial over allegations of widespread fraud.
“Given [the] defendants’ demonstrated propensity to engage in persistent fraud, failure to grant such an injunction could result in extreme prejudice to the people of New York,” Judge Arthur Engoron wrote in an order handed down in a New York state court in Manhattan on Thursday.
The New York attorney-general’s office, which brought a wide-ranging case against the Trump Organization and members of the Trump family in September, had requested the installation of a monitor, telling the court earlier that the Trump companies were attempting to move money out of the state’s jurisdiction.
On the day the case was brought, the Trump Organization created another company called Trump Organization II, incorporated in Delaware, lawyers for New York attorney-general Letitia James told the court, arguing that it was an attempt to move assets beyond the grasp of state officials.
“Today’s decision will ensure that Donald Trump and his companies cannot continue the extensive fraud that we uncovered,” James said after the ruling. “No number of lawsuits, delay tactics, or threats will stop our pursuit of justice.”
Lawyers for Trump had filed suit separately in Florida late on Wednesday, claiming the New York attorney-general’s office was engaged in an “unapologetic crusade” that unlawfully crossed state boundaries.
But James’s office said the move showed Trump was “attempting to shield the key documents governing the structure of his business conglomerate and ownership of his business assets from review”, and argued it made the need for an injunction all the more urgent.
The Trump entities had previously opposed the injunction claiming that James, a Democrat, was engaged in a “politically motivated” attempt to destroy the former president’s businesses and that the move “would effectively allow the NYAG to nationalise the Trump business empire”.
The judge said in his order that the role of a monitor — who must be paid for by the Trump Organization — would be to oversee the submission of accounts and financial disclosures, rather than exert control over the enterprises.
He also banned the Trump entities from “selling, transferring or otherwise disposing of any non-cash asset” listed in Trump’s last financial statement, without alerting the attorney-general’s office or the court.
The attorney-general’s lawsuit alleges that Trump and the Trump businesses had inflated the value of assets — such as Trump Tower apartments and the Mar-a-Lago property in Florida — by billions of dollars over the course of 11 years, in order to attract favourable financing from banks.
If the attorney-general’s case is successful, the court could permanently bar Trump and his children from serving as an officer or director in any New York corporation, and ban the former president from buying property in the state. The Trump businesses could be forced to pay back as much as $250mn.