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Legal experts: Judge ordered special monitor to “babysit” Trump after “Trump Organization II” scheme

Salon 11/4/2022 Igor Derysh

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Former President Donald Trump gets ready to speak during a Save America rally on October 1, 2022 in Warren, Michigan. Emily Elconin/Getty Images

A New York judge on Thursday agreed to appoint an independent monitor to oversee the Trump Organization after prosecutors warned that the company may be trying to skirt accountability by transferring financial assets out of the state.

New York Supreme Court Justice Arthur Engoron, who has repeatedly been accused of being "unfair" by former President Donald Trump for ruling against him and finding him in contempt of court, said he would appoint a special monitor in response to a request from New York Attorney General Letitia James.

"This court finds that the appointment of an independent monitor is the most prudent and narrowly tailored mechanism to ensure there is no further fraud or illegality … pending the final disposition of this action," Engoron wrote, adding that the defendants will have to pay for the cost of the independent monitor. "If the monitor reasonably determines that defendants have violated this order, the monitor shall immediately report that matter to [Office of the Attorney General], defendants, and this Court," the judge warned.

Engoron also banned the Trump Organization from transferring any non-cash assets without providing two weeks' notice to the court and James' office.

Trump's decision to invoke his Fifth Amendment right during his court-ordered deposition earlier this year appeared to come back to bite him in Thursday's ruling.

"Although not dispositive on any single issue, this Court is permitted, and is here persuaded, to draw a negative inference from Mr. Trump's invocation of his Fifth Amendment right … more than 400 times in response to questions posed to him during his deposition," Engoron wrote.

The independent monitor will "essentially babysit" the Trump Organization while the legal battle continues, wrote MSNBC legal analyst Lisa Rubin.

"That figures to drive Trump and his kids berserk," tweeted former U.S. Attorney Harry Litman. "Wonder who wants the job?"

Richard Signorelli, a former federal prosecutor in the Southern District of New York, predicted that the monitor is "going to be blown away by what he sees going on at the company."

The order came after James' office learned that the Trump Organization formed a new entity called "Trump Organization II LLC" on the same day that she filed a $250 million fraud lawsuit against him and his three eldest children. James also alleged that the company has "continued using practices they knew to be improper or fraudulent."

"Beyond just the continuation of its prior fraud, the Trump Organization now appears to be taking steps to restructure its business to avoid existing responsibilities under New York law," prosecutors told the court in a filing last month, asking for a special monitor to be appointed. The lawsuit, which alleges more than 200 acts of fraud over a decade, seeks to bar Trump and his three eldest children from running any company in the state and other penalties.

"Time and time again, the courts have ruled that Donald Trump cannot evade the law for personal gain," James said in a statement on Thursday. "Today's decision will ensure that Donald Trump and his companies cannot continue the extensive fraud that we uncovered and will require the appointment of an independent monitor to oversee compliance at the Trump Organization."

Trump lashed out over the ruling in a statement published on Truth Social.

"A puppet judge of the New York Attorney General and other sworn enemies of President Trump and the Republican Party has just issued a ruling never before seen anywhere in America. It is Communism come to our shores," the former president said.

"Businesses will be fleeing New York, which they already are, for other states and countries," he continued. "Today's ridiculous ruling by a politically-motivated, hand-picked judge makes it even more vital for courts in both New York and Florida to do the right thing and stop this inquisition."

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Trump earlier this week filed a bizarre lawsuit against James in Florida, accusing her of trespassing on his right to privacy in Florida and seeking to halt her civil case against him and his company. Numerous Trump lawyers warned him that the suit is "frivolous and would fail" but he went ahead with it anyway, according to The New York Times, even as the Trump Organization's counsel worried that the lawyers filing the claim "might be committing malpractice."

Former U.S. Attorney Joyce White Vance dismissed Trump's complaint that the ruling would drive businesses out of the state.

"Actually, the judge's ruling makes the business environment in NY safer and more secure for businesses, by rooting out wrongdoers who benefit from fraudulent behavior and skew the markets for insurance, among other things," she wrote on Twitter.

Rubin also disputed Trump's claim about "Communism," noting that the ruling "doesn't hand over anything Trump owns to the government."

"None of this would be possible but for the AG's having demonstrated a pattern of persistent, ongoing financial fraud that was anomalistic even in the bizarro, magic mirror world of commercial real estate. Some of [the] valuations here were so outlandish as to be farcical," Rubin wrote.

In the end, what Trump calls "communism looks to others of us like justice," she added. "The AG is not redistributing his wealth; she's preventing Trump from faking it--and now from transferring it--without accountability."

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