Trump found to have defrauded insurers

Trump found to have defrauded insurers | Insurance Business Canada

Insurance News

Trump found to have defrauded insurers

Ex-president could face nine-figure fine

Insurance News

By
Matthew Sellers

In a landmark ruling, Judge Arthur Engoron has found that former President Donald Trump and his organization had misled financial institutions, including insurance companies, by greatly inflating asset values. This manipulation of asset worth, as discovered in a lawsuit initiated by New York’s attorney general, could have manipulated his insurance premiums.

“In defendants’ world… a disclaimer by one party casting responsibility on another party exonerates the other party’s lies,” opined Engoron in a detailed 35-page decision, highlighting the stark disconnect between the claims made and reality. As Engoron established, this misrepresentation not only violated the law but possibly impacted the insurance calculations.

Notably, Trump’s counterargument hinged on a disclaimer present in the financial statements he provided banks and insurers. He argued that this disclaimer absolved him from the reliability of the information within. Judge Engoron gave this argument short shrift, noting that such blanket disclaimers shouldn’t be allowed to shield inaccurate statements, especially when they have real-world ramifications, such as in the insurance industry.

Attorney General Letitia James pinpointed several instances where Trump’s claims of asset values appeared dubious. For instance, the former president’s valuation of his Manhattan Trump Tower apartment was nearly triple its presumed actual worth. Similarly, his Mar-a-Lago property was valued at an astronomical figure, largely based on a hypothetical residential development use, which is restricted by deed terms.

Trump faces an uphill legal battle. While criminal charges were not pursued in this particular case, the ruling poses significant implications for Trump’s future business ventures in New York.

Trump’s impending non-jury trial in early October will further determine the ramifications of these findings. Attorney General James seeks a staggering $250 million in penalties, based on the benefits procured from the alleged deceit.