The recent ruling by New York Judge Engoron in ex-President Trump's civil fraud trial could result in significant fines and constraints on his family business. This legal battle, driven by a little-known law known as Section 63(12), gives State Attorney General Letitia James the power to go after large corporations like Exxon Mobil, Juul, and Martin Shkreli. In this case, James has accused Trump of inflating his net worth to secure favorable loans, alleging fraud against lenders.
Despite testimony from lenders indicating satisfaction with Trump as a client and a lack of concrete evidence proving Trump's intent to deceive banks, Section 63(12) allows James to establish fraud without needing such specifics. Judge Engoron previously determined that Trump engaged in a pattern of fraud by exaggerating asset values in statements to lenders. The broad scope of the law empowers James to seek penalties even without demonstrating specific harm, allowing her to pursue the forfeiture of fraudulently obtained funds.
James is seeking to recover approximately $370 million from Trump, including $168 million representing the amount he allegedly saved on loans through inflating his net worth. Section 63(12) grants Judge Engoron wide discretion in determining penalties and imposing new restrictions on Trump and his family business. Possible punishments could include a lifetime ban on Trump leading any New York-based company, a five-year prohibition on the Trump Organization obtaining loans from New York banks, and limitations on the involvement of Trump's adult sons in New York businesses.
Additionally, Section 63(12) allows for punitive actions such as canceling business certificates and dissolving operations. Trump has expressed concern about the extensive authority granted to the attorney general's office by this law. This law has played a crucial role in James conducting a thorough investigation for nearly three years leading up to the lawsuit filed in 2022.
As the legal proceedings continue, Section 63(12) will continue to shape the potential penalties and restrictions faced by the former president and his family business.
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