A New York judge found Donald Trump and his adult sons liable for fraud and canceled the Trump Organization’s business certification, a shocking ruling that poses an existential threat to the former president’s financial empire as he runs for a second term in the White House. Judge Arthur Engoron’s ruling on Monday is a complete rejection of Trump’s arguments that he didn’t inflate the values of his golf courses, hotels, homes at Mar-a-Lago and Seven Springs on financial statements. “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,” the judge wrote. “That is a fantasy world, not the real world,” Engoron said. The ruling came in response to the lawsuit by New York Attorney General Letitia James, who is seeking $250 million in damages, a ban on the Trumps from serving as officers of a business in New York and to stop the company from engaging in business transactions for five years. RELATED: New York AG’s office alleges Trump inflated his net worth by as much as $2.2 billion in 1 year A trial is expected to begin next week on the amount of damages owed, and the full breadth of Engoron’s ruling – or how it will play out – remains unclear. The judge canceled the business certifications of the Trump entities that are defendants in the case, including the Trump Organization – a major blow to the business that has been so synonymous with the former president’s personal brand. A receiver will be put in place to “manage the dissolution” of the corporate entities. There are two New York properties that are part of the lawsuit, the commercial tower at 40 Wall Street and the Trump family compound at Seven Springs. Questions remain as to how the receiver would dissolve the properties, if the ruling would impact properties located outside of New York state, including Mar-a-Lago, and if the Trumps could transfer the New York-based assets into a new company located out of state. “Today, a judge ruled in our favor and found that Donald Trump and the Trump Organization engaged in years of financial fraud,” James, a Democrat, said in a statement Tuesday night. “We look forward to presenting the rest of our case at trial.” Trump condemned the ruling in a statement, accusing Engoron of “doing the bidding” of James. “It is a great company that has been slandered and maligned by this politically motivated Witch Hunt. It is very unfair, and I call for help from the highest Courts in New York State, or the Federal System, to intercede. THIS IS NOT AMERICA!” Trump said. Trump’s attorney Christopher Kise called the ruling “completely disconnected from the facts and governing law.” He added: “While the full impact of the decision remains unclear, what is clear is that President Trump and his family will seek all available appellate remedies to rectify this miscarriage of justice.” Judge calls defendants’ arguments bogus Among other things, Trump is accused of inflating the value of his triplex apartment at Trump Tower by three times its size, resulting in an overvaluation of between $114 million to $207 million, Engoron wrote. “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 wrote. The judge was unsparing in his decision, criticizing the Trumps’ defense arguments. “Exacerbating defendants’ obstreperous conduct is their continued reliance on bogus arguments, in papers and oral argument,” Engoron wrote. The state supreme court judge likened the Trumps’ legal defense of his fraudulent financial statements to a Chico Marx line in the comedy “Duck Soup”: “Well, who ya gonna believe, me or your own eyes?” James has alleged that Trump, three of his children, his companies and his business executives defrauded lenders, insurers and other entities. (An appeals court dismissed Trump’s eldest daughter, Ivanka, as a co-defendant from the case in June.) In the lawsuit, James claims that Trump reaped a “substantial” financial benefit by putting forward faulty information in his financial statements, including $150 million in the form of favorable interest rates he obtained from the banks that the attorney general said his team misled. In the order, the judge rejected Trump’s deposition testimony in which the former president said that the financial statements were not fraudulent because they contained disclaimers. Trump said the statements contained a “worthless clause” in them warning lenders and others that they shouldn’t be relied on. Tuesday, the judge said that “the defendants’ reliance on these ‘worthless’ disclaimers is worthless.” In a statement on X, the platform formerly known as Twitter, Eric Trump said: “Today, I lost all faith in the New York legal system. Never before have I seen such hatred toward one person by a judge - a coordinated effort with the Attorney General to destroy a man’s life, company and accomplishments. We have run an exceptional company - never missing a loan payment, making banks hundreds of millions of dollars, developing some of the most iconic assets in the world. Yet today, the persecution of our family continues…” Trial start date in limbo The ruling means the attorney general’s office won on its first claim and will receive some amount of disgorgement to be determined at trial. The case will still proceed to trial but the attorney general’s office won’t need to prove the financial statements are false as they seek to hold him and his sons liable for insurance fraud and false business records. The trial’s start date remains in limbo. Earlier this month, Trump filed a petition with the state appeals court to force Engoron to implement an appeals court decision in June that said certain claims may be moot because they fell outside of the statute of limitations. The appeals court left it up to Engoron to decide. A judge on the appeals court paused the start of the trial, scheduled for Monday, to allow a larger panel of appellate judges to weigh in. A decision on that issue is expected to come this week. CORRECTION: A previous version of this story misstated the number of claims on which the judge ruled Tuesday. He ruled on one claim from the attorney general’s office. This story has also been updated with additional developments.