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Attorney General Tish James’ civil suit against former President Donald Trump has been making headlines, but its potential consequences for New York’s economy are deeply concerning. While the lawsuit may serve to bolster James’ career, it poses a significant risk to businesses operating in the state. It serves as a warning to anyone conducting business in New York: a headline-seeking prosecutor can take you to a courtroom with a biased judge and exploit New York’s laws to potentially dismantle your company.
Although Donald Trump’s local business reputation has always been a subject of mixed opinions, it’s clear that he is now facing a difficult legal battle. Justice Arthur Enrogon recently ruled that Trump’s financial documents provided to banks and insurance companies contained “fraudulent valuations” of his real estate assets. As a result, Enrogon canceled business certificates that allowed some of Trump’s companies to operate. Attorney General James is seeking a staggering $250 million penalty, and the court has the authority to dissolve Trump’s businesses entirely.
However, the absence of actual victims in this case is glaringly evident. Even Justice Enrogon himself admits that “the record is devoid of any evidence of default, breach, late payment, or any complaint of harm.” Yet he dismisses this absence of evidence as “irrelevant.” This is the same judge who previously blocked a real estate project simply because he disliked the “huge towers,” which was later reversed.
Attorney General James made it clear that she intended to prosecute Trump as part of her campaign to become Attorney General. Even though her allegations lack substantial evidence, she pursued the case, likely pleasing fellow Democrats. It is important to note that prosecutors in Manhattan chose not to file charges against Trump, primarily because the claims of him inflating his holdings’ value for loan and insurance purposes were weak at best.
It’s perplexing to think that banks and insurance companies’ financial experts were unaware of Trump’s reputation for creative business practices and hyperbole. Trump even included a disclaimer warning that his valuations should not be relied upon, but the judge and AG maintain that he can still be found guilty of fraud.
The case underscores New York’s potential for arbitrary application of a “corporate death penalty,” which can have a chilling effect on businesses. Cancelling business certificates under such circumstances can create a situation where zealous AGs can exploit open-ended laws and capricious judges are willing to disregard the protections in place for businesses.
While Donald Trump may not be the most sympathetic defendant due to his penchant for embellishment and outright lies, his treatment in this case is unjust. If Attorney General James prevails, the consequences for New York’s economy could be long-lasting and detrimental to the state’s business climate. The ability to prosecute and potentially dismantle a business based on weak claims and a political agenda raises serious questions about the fairness and reliability of New York’s legal system.
