A New York judge found Donald Trump and his family business fraudulently inflated the value of his properties and other assets, in a major defeat for the former U.S. president that could severely hamper his ability to do business in the state, writes Reuters.

The scathing decision by Justice Arthur Engoron of New York state court in Manhattan will make it easier for state Attorney General Letitia James to establish damages at a scheduled Oct. 2 trial.

Engoron also ordered the cancellation of certificates that let some of Trump’s businesses, including the Trump Organization, operate in New York, and ordered the appointment of a receiver to manage the businesses" dissolution.

The judge described how Trump, his adult sons Donald Jr. and Eric, the Trump Organization and other defendants made up valuations and inflated Trump"s net worth to suit their business needs.

“That is a fantasy world, not the real world”, - Engoron wrote.

The judge also sanctioned the defendants’ lawyers for making “preposterous” legal arguments and fueling their clients’ “obstreperous” conduct.

Trump and the other defendants have argued that they never committed fraud, and that the challenged transactions were profitable. They plan to appeal Engoron’s decision.

“Today’s outrageous decision is completely disconnected from the facts and governing law|, Christopher Kise, a lawyer for Trump, said in a statement. “President Trump and his family will seek all available appellate remedies to rectify this miscarriage of justice”.