Donald Trump ordered by judge to face New York fraud lawsuit

Credit: REUTERS/CARLO ALLEGRI

By Jonathan Stempel

NEW YORK, Jan 6 (Reuters) - A New York judge on Friday said former U.S. President Donald Trump must face a lawsuit by the state's attorney general accusing him of fraudulently overvaluing his namesake real estate company's assets and his own net worth.

Attorney General Letitia James had suedTrump, his adult children Donald Jr., Eric and Ivanka and the Trump Organization last September over an alleged scheme to inflate Trump's assets by billions of dollars through a decade of lies to banks and insurers, in what she called a "staggering" fraud.

Justice Arthur Engoron of the state Supreme Court in Manhattan rejected defense claims that James waited too long to sue, fell short of establishing fraud, and should have better justified the $250 million of damages she is seeking.

He also said Ivanka Trump could be sued despite her claims she had not falsified valuations and not worked for the Trump Organization since 2017, saying she could be liable for participating in "continuing wrongs."

"Sophisticated defense counsel should have known better," Engoron wrote nonetheless.

In a statement, James said Trump "engaged in years of extensive financial fraud to enrich himself and cheat the system," and must defend himself in court.

She also wants to stop the Trumps from running businesses in New York, and ban Trump and his company from acquiring real estate there for five years. An Oct. 2 trial is scheduled..

The lawsuit is one of many legal woes affecting Trump, who is seeking another term as president in 2024.

They include criminal investigations related to the FBI's seizure of government documents from his Florida home, and his role in efforts to overturn or interfere with 2020 presidential election results.

The Manhattan district attorney's office is also conducting a criminal probe relating to James' civil case, and the Trump Organization faces a Jan. 13 sentencing after being convicted of tax fraud in another New York case.

(Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot and David Gregorio)

((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters Messaging: jon.stempel.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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