One year ago, on Sept. 21, 2022, New York Attorney General Letitia James announced that her office had filed a $250 million lawsuit against Donald Trump, accusing the former president of fraudulent business practices.
Turning the title of Trump's bestselling business book on its head, James told reporters at a New York City press conference, "Claiming you have money you do not have does not amount to the Art of the Deal. It's the Art of the Steal."
Though Trump has denied all wrongdoing, a New York judge on Tuesday effectively decided the central allegation against Trump, ruling just days before the scheduled start of the trial that the former president committed fraud by repeatedly inflating the value of some of his signature properties. Trump attorney Alina Habba immediately said that Trump planned to appeal the decision.
The judge also canceled the Trump Organization's business certificates in New York, severely restricting Trump's ability to conduct business in the state moving forward -- a move that Habba called "nonsensical" and "outrageously overreaching."
Yet the ruling still left multiple matters unresolved -- including what additional penalties Trump might face and what might happen with the multiple causes of action included in the attorney general's suit -- which are due to be argued at the civil trial that starts on Monday.
"Don't take this the wrong way, but what in the court's mind does this trial now look like?" Trump attorney Chris Kise asked Judge Arthur Engoron during a pretrial conference on Wednesday, regarding the uncertainties that lie ahead.
Here are five takeaways as the parties prepare for Monday's scheduled trial.
Trump and his co-defendants face a bench trial, meaning that the sole arbiter of the case is Engoron instead of a jury. In his scathing order Tuesday, Engoron sharply criticized Trump's business practices as belonging in a "fantasy world."
"In defendants' world: rent regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate into thin air; a disclaimer by one party casting responsibility on another party exonerates the other party's lies..." Engoron wrote, citing multiple arguments made by defense to justify the allegedly inflated valuations of Trump's assets. "That is a fantasy world, not the real world."
Engoron also appeared unconvinced by the depositions Trump has given in the case. The judge seemed to use the former president's words against him, citing transcribed comments Trump made about the inclusion of so-called "worthless clause" disclaimers included in his financial statements, which the defense has argued insulate the defendants from liability.
"However, defendants' reliance on these 'worthless' disclaimers is worthless," Engoron wrote.
Engoron similarly disagreed with the defense's argument that Trump's property values were "subjective" and therefore could not be fraudulent.
"The defenses Donald Trump attempts to articulate in his sworn deposition are wholly without basis in law or fact," Engoron wrote, adding that the documents presented to the court "clearly contain fraudulent valuations that defendants used in business."
While Trump's public comments indicate he's been unfazed by the four criminal cases and additional civil lawsuits he faces, Tuesday's ruling appears to strike at the core of Trump's identity as a successful negotiator who propelled himself to the presidency on the strength of his business record.
In previous arguments, Kise described Trump as a "master of finding value where others do not" while arguing that Trump's alleged inflated valuations were a product of his business skill.
"This is why billionaires are billionaires," Kise said about Trump's business acumen.
However, Engoron's ruling methodically tore into Trump's business transactions, saying that the only way to explain the allegedly inflated valuations was fraud. Finding that Trump inflated the value of his triplex at Trump Tower by between $114 and $207 million, Engoron called out Trump for describing the property as three times its actual size to support his valuation.
"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," Engoron said in his order.
"This has significant consequences for the business of Donald Trump here in New York," said ABC News chief legal analyst Dan Abrams. "If this holds up on appeal, this could mean he loses buildings, it means he loses properties."
While Trump is not required to attend the trial, the attorney general plans to call the former president as a fact witness, according to a witness list provided to the court.
When Trump was initially deposed by the attorney general's office in August 2022, before the case was brought, Trump invoked his Fifth Amendment right against self-incrimination over 400 times -- but he took a more talkative approach during an April 2023 deposition, providing lengthy responses to questions posed by the government.
It remains unclear which approach Trump would adopt if he is called to the stand during the trial.
Before Tuesday's surprise ruling, Engoron estimated that the trial could take three months and end by Dec. 22. While his ruling is likely to limit the amount of evidence and testimony, the trial will still include lengthy direct and cross examination of dozens of witnesses.
The government's witness list, which was updated after Engoron's ruling, includes 27 people who would appear in the courtroom in person.
While the defense is unlikely to call all their witnesses, their list includes 127 people, in addition to anyone on the government's witness list.
The New York attorney general is seeking a $250 million ruling against Trump and his co-defendants -- and that penalty might only be the start of Trump's financial woes stemming from the trial.
James has also asked the court to bar Trump from entering into commercial real estate transactions in New York, to prevent him from applying for loans, and to disqualify him from serving as an officer of a New York corporation.
With his order to cancel Trump's New York business licenses, Engoron has directed Trump to begin the process of dissolving the companies held in his name, which could imperil the future of the Trump Organization and similar entities.
"This, you could argue, is more immediately perilous to some degree than some of the criminal cases to Donald Trump," Abrams said about the risk to Trump's checkbook.
