Donald J. Trump’s civil fraud trial over accusations that he inflated the value of his properties by billions of dollars will likely begin Monday after a New York appeals court rejected the former president’s attempt to delay it.
The appeals court, in a terse two-page order Thursday, effectively turned aside for now a lawsuit that Mr. Trump had filed against the trial judge, Arthur F. Engoron. The lawsuit had sought to delay the trial and ultimately throw out many accusations against the former president.
The case was brought last year by New York’s attorney general, Letitia James, who says Mr. Trump exaggerated his net worth in some years by as much as $2.2 billion to obtain favorable loan terms from banks. On Tuesday, in a surprising pretrial ruling, Justice Engoron struck Mr. Trump a heavy blow, finding him liable for fraudulently overvaluing his assets and stripping him of control over his New York properties.
That decision validated the heart of Ms. James’s case, but Mr. Trump is not without options. He could still challenge Justice Engoron’s ruling and seek an emergency pause of the trial, although it is unclear whether the appeals court would consider doing so.
With Mr. Trump’s liability for fraud largely resolved, the trial — which would be decided by Justice Engoron himself rather than a jury — would resolve other aspects of the case, most notably whether Mr. Trump and his company will face a financial penalty. Ms. James is seeking to recover $250 million in ill-gotten gains.
The appeals court’s Thursday decision to allow the trial to proceed punctuated a week of brutal legal losses for Mr. Trump as he grapples with the consequences of government investigations that, aside from Ms. James’s case, have resulted in four criminal indictments.
Ms. James’s civil case will be the first government action against the former president to reach trial. Her suit seeks to cast a harsh spotlight on Mr. Trump’s braggadocio and bluster, the traits that propelled his business and political careers, but were also the twin engines of a fraudulent scheme to fabricate his net worth.
Now that Justice Engoron has found that Mr. Trump’s actions violated New York law, the question remains: How much will he have to pay?
Mr. Trump’s best hope to derail the trial was the lawsuit against Justice Engoron, which the former president filed two weeks ago. In it, Mr. Trump’s lawyers argued that Justice Engoron had ignored an earlier appeals court decision in June that raised the prospect that some accusations against the former president might be too old to go to trial.
But the appeals court on Thursday appeared unmoved, and did not address those arguments in its order. It is unclear whether the ruling by a panel of five judges completely shut down Mr. Trump’s lawsuit against Justice Engoron. Although the ruling lifted a stay of the trial, it did not technically dismiss the former president’s claims against the judge.
John W. Moscow, a former Manhattan prosecutor who has worked on fraud investigations for decades, said that the appeals court’s denial of a delay just days before the trial is set to begin was simply common sense.
“That they denied it without comment that doesn’t strike me as in any way surprising,” he said. “That’s what you would expect an appellate court to do.”
A lawyer for Mr. Trump, Christopher M. Kise, did not respond to several requests for comment. On Tuesday, he called Justice Engoron’s ruling “outrageous” and “completely disconnected from the facts and governing law.” He said that the judge ignored “basic legal, accounting and business principles.”
Mr. Trump has denied all wrongdoing. A Republican, the former president has accused the judge and the attorney general, both Democrats, of being politically motivated, and has called Justice Engoron “deranged” and Ms. James, who is Black, a racist.
At the center of Ms. James’s case is the accusation that Mr. Trump’s annual financial statements exaggerated his net worth. Mr. Trump, she said, submitted the statements to banks to obtain favorable loan terms.
Mr. Kise, in turn, has argued that Mr. Trump could not have committed fraud because the banks made money off the loans and the former president never missed a payment.
But lawyers from the attorney general’s office have countered that, under the powerful state law allowing them to bring the case, they did not need to show the fraud had resulted in financial harm. Justice Engoron agreed in his Tuesday opinion, and sanctioned each of Mr. Trump’s lawyers $7,500 for continuing to advance arguments they had previously made.
His order also left the future of Mr. Trump’s business in New York hanging in the balance.
While his decision ordered the dissolution of the legal entities Mr. Trump uses to control his New York assets, it has yet to be determined whether the order will force Mr. Trump to sell his properties — including Trump Tower, his golf club in Westchester County and the towering office building at 40 Wall Street in the heart of the Financial District. Instead, the judge might allow an independent monitor to control the properties for some time while Mr. Trump continues to own them.
The contours of the Tuesday order are likely to become clearer after the trial, at which Ms. James’s lawyers will seek further punishment as they attempt to convince Justice Engoron that the former president should pay the $250 million fine and be permanently barred from running a business in New York.