A federal judge has thrown cold water on President Donald Trump's $1.776 billion settlement with the Justice Department over the leak of his tax returns. The judge ruled that the whole lawsuit was a charade — there was never a real legal fight, just a coordinated effort to get a judge's stamp of approval on a sweetheart deal.

On Monday, U.S. District Judge Kathleen Williams issued a 56-page ruling that basically said: This case was a sham from the start. Trump and the Justice Department were never truly on opposite sides. They were acting more like co-conspirators than adversaries.

"In sum, the facts before this Court demonstrate there was never adverseness between the Parties; there was never a case or controversy," Williams wrote. She added that the lawsuit was "brought to manipulate the judicial process."

Here's what happened: Trump sued the IRS for $10 billion over the disclosure of his tax returns. Then, the parties reached a settlement tied to a proposed $1.776 billion "anti-weaponization" fund — a pot of money for people who claim the government wronged them. Acting Attorney General Todd Blanche also signed a memo barring future government actions involving Trump's past tax returns, businesses, and family members.

Judge Williams wasn't buying it. She called the lawsuit "brought for an improper purpose—to gain the imprimatur of judicial legitimacy for a 'settlement' that had no viable basis in law or fact."

She sanctioned Trump's attorneys, referred lawyer Alejandro Brito to the Florida Bar for possible disciplinary action, and directed the court clerk to notify bar authorities overseeing Blanche and Associate Attorney General Stanley Woodward.

The Justice Department did not immediately respond to requests for comment.

This isn't the only legal headache for the Trump DOJ on this front. Earlier this month, Senator Elizabeth Warren criticized the administration over a $3.3 million settlement with egg producers accused of price coordination, calling it too lenient. Last month, the administration abandoned the proposed $1.8 billion "anti-weaponization" compensation fund after lawmakers and courts raised concerns about oversight and potential payouts to individuals involved in the January 6 Capitol attack. And retired judges have urged a court to reopen Trump's dismissed IRS lawsuit, citing questions about the settlement process.

So the judge's ruling doesn't just kill this particular deal — it casts a long shadow over the whole idea of using settlements to reward allies or bypass normal legal processes. As Judge Williams made clear, you can't just stage a fake lawsuit to get a judge to bless a political slush fund.