Donald Trump committed fraud "repeatedly" for years by misrepresenting his wealth to banks and insurers, a New York judge has ruled.
Judge Arthur Engoron found that the former US president overvalued assets and exaggerated his net worth on paperwork used to secure financing while building the real estate empire which led to his fame.
The judge wrote: "The documents here clearly contain fraudulent valuations that defendants used in business."
His net worth had been inflated by as much as $2.23billion (£1.83billion) and as much as $3.6billion (£2.96billion) on annual financial statements given to banks and insurers, the court heard.
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A trial to resolve the claims is scheduled to begin on Monday.
Attorney General Letitia James sued Trump last September, accusing him and the Trump Organization of lying about his net worth and asset values between 2011 and 2021.
The judge ruled that Trump, his company, and key bosses lied about his wealth on annual financial statements.
James claimed the fraud was committed in order to get better terms on bank loans and pay less tax.
Donald Trump is facing multiple criminal chargesREUTERS
In his 35-page ruling, Judge Engoron said Trump's legal arguments defending the statements are based in "a fantasy world, not the real world."
The ruling also highlighted that Trump had exaggerated the size of his New York apartment to pump up its value, repeatedly claiming it was over 30,000 feet when it was a third of that size.
"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," he wrote.
The judge found Trump, his sons Don Jr and Eric, and their companies liable for fraud.
Trump dismissed the charges and likened the case to a witch hunt
Trump has previously rejected the case in New York as another political "witch hunt" brought by a prosecutor against him.
The judge added: "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.