Case could cost former president a fortune and end his control of the empire that made him the world’s most famous businessman

“People want to believe that something is the biggest and the greatest and the most spectacular. I call it truthful hyperbole,” Donald Trump wrote 36 years ago in his best-selling book, The Art of the Deal. “It’s an innocent form of exaggeration, and a very effective form of promotion.” This week a New York judge called Trump’s “truthful hyperbole” fraud in a ruling that could cost the former president a fortune and end his control of the business empire that made him the world’s most famous businessman and president of the United States.

Trump is mired in litigation but perhaps no case is more personal to him than the one set to begin on Monday at a Manhattan courthouse near the city’s financial district. The case, brought by New York attorney general Letitia James, comes after a three-year investigation into Trump’s complex and sprawling businesses. James contends Trump consistently overstated the value of his assets to broker deals and obtain financing.

What had looked set to be a months-long affair will probably be much shorter after New York supreme court Justice Arthur Engoron agreed and found Trump guilty of fraud days before the case had even begun.

The ruling struck at the foundations of Trump’s image, ending his ability to run his real estate company in New York state and, unless overturned, could force him to hand over control of his New York properties — including Trump Tower in midtown Manhattan from which he launched his presidential victory — to an independent third party, otherwise known as a receiver.

One essential question remains: how much will he have to pay up?

James is asking for a fine of at least $250m – the minimal amount, the office determined, that Trump’s company gained from fudging financial statements over the course of a decade to bolster the value of its assets. It is a huge sum, even for a man who claims to be as rich as Trump.

The Trump family’s reputation has long been tarnished in New York. Trump himself is now a Florida resident. But perhaps the biggest blow to Trump will be that the ruling effectively ends the legacy of the business his father built and that he inherited in the city.

Nor can he rely on the support of his followers. There will be no jury. Instead Trump’s lawyers must win over Engoron – who Trump has called on social media “deranged”.

This is incredibly serious for him because he’s not in business any more

David Cay Johnston, a long-time Trump critic and author of The Big Cheat, believes the trial will be fatal for Trump’s business interests. “This is incredibly serious for him because he’s not in business any more,” Johnston said. “Money is everything to him.”

“Donald has been a thief and a liar his entire life. But nothing’s happened to him. That’s a really astonishing part because there’s an unbelievably robust record, establishing that Donald has cheated people lied to people,” said Johnston.

Trump has proven adept at wriggling out of trouble in the past. This time the odds seem stacked against him. Engoron delivered a major blow to the Trump family with a pre-trial judgment ruling that Trump and his co-defendants, including sons Donald Trump Jr and Eric Trump, committed financial fraud through faulty financial statements.

Prosecutors honed in on a state law that gives the attorney general’s office the power to go after “persistent and repeated fraud and illegality”, including falsifying business records and using them in business transactions. In his ruling, Engoron said he saw evidence of this fraud in the documents prosecutors submitted as evidence.

“The documents here clearly contain fraudulent valuations that defendants use in business,” Engoron wrote in his ruling. “Defendants’ respond that: the documents do not say what they say; that there is no such thing as ‘objective’ value; and that essentially, the court should not believe its own eyes.”

Engoron said the attorney general’s evidence shows that Trump was operating in a “fantasy world, not a real world”.

“In the 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.

James’ investigation has been exhaustive. Her office said it found fraudulent conduct across 23 different Trump Organization properties and assets.

Specific examples include how Trump claimed that his triplex apartment in Trump Tower was worth $327m, an “absurd” amount to the attorney general’s office, which pointed out that, at the time, “only one apartment in New York City had ever sold for even $100m”. A Wall Street office building was valued by Trump at $530m, more than double what was calculated by independent professional appraisers. Meanwhile, 12-rent stabilized apartments in Trump Park Avenue a Manhattan condo was valued at $750,000 in an outside, bank-ordered appraisal of the property in 2010. A decade later, Trump said the same apartments were worth $50m.

The pre-trial ruling dealt a legally complicated and rare punishment to the Trumps. Trump and his sons will see their New York business certificates revoked, essentially barring them from running their New York real estate properties. Certificates are necessary to run many different types of businesses in the state. Without them a business can not receive loans and government contracts. Experts have likened it to an owner of multiple cars losing their driver’s license.