New York real estate developers slammed the judge who stripped Donald Trump of his business empire for allegedly inflating the prices of his properties — with some predicting the decision will be overturned on appeal.
Justice Arthur Engoron issued a summary judgment last month calling for a receiver and the canceling of the Trump Organization’s business certificates after state Attorney General Letitia James filed a $250 million civil fraud lawsuit against the former president.
His ruling was temporarily paused by an appeals court at the start of trial, which continued this week.
“I don’t think Trump will lose his properties or his business licenses because of one eccentric judge making a decision on his own. I think [the decision] will be reversed on appeal, but I could be wrong,” one major real estate player said.
Top developers interviewed by The Post — including those who love Trump and those who loathe him — admit there has always been a bit of embellishment when dealing with banks about their properties.
“The Real Estate Board of New York’s annual party — the equivalent of Vanity Fair’s Oscar party — is even dubbed ‘The Liar’s Ball,’” one developer noted.
However, the ramifications of possibly losing their properties is no joking matter, and Engoron’s decision — whether it is an overreach or not — has sent a chill through the industry.
“Canceling business certificates is carte blanche to go after anyone for anything,” one concerned developer said. “I’m not defending Trump. But now they have another tool in their toolbox. Where does it end? It’s a little scary.”
Trump’s former lawyer and longtime fixer Michael Cohen spent two days on the stand this week testifying that he “reverse engineered” Trump Organization asset values based on whatever number Trump chose.
The former president’s defense has been, essentially, that every developer lies and that there was no victim because the bank loans were paid back and that everyone made money.
The onus falls on banks to do their due diligence before issuing any loans, one legal expert told The Post.
“No one lost money. No one got hurt. Everyone got paid in full — even overpaid since the assets were inflated,” real estate lawyer Adam Leitman Bailey said.
The argument carried weight with many developers, including one who has clashed with Trump in the past.
“So Trump is a fraud. We all know it. He always has been. He’s the world’s best con man. The question is, if everybody knows you are a fraud, who are you defrauding?” the developer said.
But another legal expert dismissed the notion that Trump committed a victimless crime.
Business litigation attorney David Slarskey said the Trump Organization’s extreme lies and falsifications go way beyond developers’ standard “fudge factor” — what developers themselves call “puffery” and “aggressive interpretation” of truth.
“The victims of the fraud are not the banks but the integrity of the system itself,” Slarskey said.
“It is not a question of whether a bank makes a profit but what role does this organization play in the ecosystem and does that need to be addressed.”
He added that the Trump Organization’s outright lies and falsifications of square footage at Trump’s Fifth Avenue penthouse, for example, are so “grossly out of line with anything anyone could imagine that it becomes a regulatory issue, that this is the kind of organization that shouldn’t be allowed to operate in New York.”
Trump is known to have embellished almost everything about Trump Tower.
He said it was 68 stories tall when it was really 58 stories.
He said his penthouse triplex was 30,000 square feet instead of 10,000.
He hired undocumented Polish works, promised to pay them and then didn’t — until they sued.
He promised to save Art Deco pillars that were on site, part of the former Bonwit Teller building, but he didn’t.
“I remember being in his penthouse decades ago,” one developer said. “Donald was looking for an appraisal and told someone in the room it was 30,000 square feet. Then he looked at me and winked.”