A New York state judge set a hearing for later this month to decide whether to grant New York Attorney General Letitia James’ request to block the Trump Organization from engaging in certain activities.
The hearing, which is scheduled for October 31, will be the first court appearance since New York filed a $250 million lawsuit against former President Donald Trump, his three eldest children and the Trump Organization alleging they engaged in a sweeping decade-long fraud.
The judge also ordered Trump and the Trump Organization to respond to the state’s motion for a preliminary injunction by October 24.
On Thursday, James filed a motion for a preliminary injunction telling the judge, “In short, there is every reason to believe that the Defendants will continue to engage in similar fraudulent conduct right up to trial unless checked by order of this Court.”
James has alleged the Trump family has used fraudulent financial statements to obtain favorable rates of insurance and loans and tax benefits. The Trumps say the investigation is politically motivated and called Thursday’s legal filing “another stunt” to aid James’ re-election campaign for attorney general.
The attorney general’s office asked Judge Arthur Engoron to block the Trump Organization from submitting financial statements to lenders, insurers and others without providing additional information about the techniques it used to value assets. In addition, the state wants a judge to impose an independent monitor to oversee the financial statements.
“The requested targeted relief is designed to mitigate further fraud and illegality during the pendency of this action because the company has present and continuing obligations under existing loan agreements to prepare and disclose Mr. Trump’s Statement of Financial Condition as of June 30, 2022 and may also seek additional financing from lenders and renewal of insurance programs on the basis of that Statement,” the state attorneys wrote.
The attorney’s general’s office also wants to block the Trump Organization from transferring assets to any entities without court approval. The state says the same day that it announced its $250 million lawsuit against the former President and his company, the Trump Organization incorporated a new entity in Delaware, Trump Organization II LLC. The state says the Trump Organization has not provided any assurances that it will not move assets out of New York to avoid potential liability.
Trump has sought to move the case from the current judge assigned in the case, Engoron, and to the commercial division. The attorney general’s office has opposed the move.
“The OAG’s filing is nothing more than a thinly-veiled attempt to keep this case with Justice Engoron rather than have it transferred to the Commercial Division where it belongs. We have repeatedly provided assurance, in writing, that the Trump Organization has no intention of doing anything improper. This is simply another stunt which Ms. James hopes will aid her failing political campaign,” said Alina Habba, an attorney for Trump.
The state also is asking permission to serve Trump and Eric Trump electronically, noting that both individuals and their attorneys have refused to accept service of the lawsuit for nearly one month.
In a bid to bolster their position that they will succeed on the merits of their lawsuit, state attorneys cited a number of examples that they said weigh in their favor, including Trump asserting his Fifth Amendment right against self-incrimination and refusing to answer questions during his deposition this summer. In a civil case the jury can be instructed to apply an adverse inference against a defendant who doesn’t answer questions.
In addition, they note that during his sworn testimony, Donald Trump Jr., a top executive of the Trump Organization, “incredibly disclaimed all responsibility for the Statements and their contents” noting that Trump Jr. testified that he was not familiar with generally accepted accounting principles and was not involved in preparing the financial statements.
CORRECTION: This story has been updated to reflect that the deadline for Trump and the Trump Organization to respond to the state’s motion for a preliminary injunction is October 24. It has also been updated with additional details.