On Friday, The New York Sun posted an article about the $250 million civil fraud case brought by New York’s attorney general, Letitia James, against President Trump.
The article reports:
On Tuesday, a New York Supreme Court judge, Arthur Engoron, used a Palm Beach County assessor’s appraisal of Mar-a-Lago at $18 million as evidence to rule in a pre-trial judgment that Mr. Trump, his sons, and co-defendants in the Trump Organization committed fraud by inflating the values of their real estate holdings to gain more favorable terms on loans and insurance.
If Judge Engoron’s ruling stands, Mr. Trump could lose control of his New York properties. The stakes are high. The rest of the counts against Mr. Trump in the civil fraud case will be tried starting Monday, after an appeals court denied Mr. Trump’s bid to delay it this week.
Mar-a-Lago, a members’ only club where Mr. Trump also lives, is likely out of reach of New York regulators, but the accusation that Trump overstated its value is central to Judge Engoron’s fraud ruling. So is Mar-a-Lago worth only $18 million? That valuation is certainly raising eyebrows in real estate circles and on social media for being “insanely low.”
Palm Beach is one of the wealthiest towns in the world and the value of a historic, waterfront property there such as Mar-a-Lago can be astronomical. “I spoke with my appraisers,” a Palm Beach real estate broker, Lee Allen Schultz, tells the Sun, “they thought the $18 million was ridiculous.”
The article also notes:
Mr. Trump bought Mar-a-Lago in 1985 for $10 million, but Palm Beach property prices have gone up substantially in recent years. Forbes magazine appraised Mar-a-Lago at $160 million in 2018. The property boasts 128 rooms, a 20,000-square-foot ballroom, tennis courts, and a waterfront pool.
Mar-a-Lago is deed restricted and cannot be converted to a residential property, which may lower its value. The brokers who spoke with the Sun, though, say the appraised value between $18 and $27.6 million is laughable. They also note that Mar-a-Lago’s property tax assessed value is $33 million, which is also “very low,” though property owners generally like this to be low to save money on taxes.
The article concludes:
The $18 million assessment may be laughable, but the ramifications are serious. Judge Engoron wrote in his decision that Mr. Trump’s $426 to $612 million valuation of Mar-a-Lago to secure loans was “an overvaluation of at least 2,300 percent.”
“A discrepancy of this order of magnitude, by a real estate developer sizing up his own living space of decades, can only be considered fraud,” Judge Engoron wrote. “The documents here clearly contain fraudulent valuations that defendants used in business, satisfying OAG’s burden to establish liability as a matter of law against defendants.”
It should be noted that all loans were paid back, everyone was happy and no one was defrauded. So who is unhappy and why was this lawsuit brought at all? Those are the questions we should be looking at.