Trump civil fraud case: Judge fines Trump $354 million, says frauds 'shock the conscience'
The former president was found to have defrauded lenders.
Former President Donald Trump has been fined $354.8 million plus approximately $100 million in interest in a civil fraud lawsuit that could alter the personal fortune and real estate empire that helped propel him to the White House. In the decision, Judge Arthur Engoron excoriated Trump, saying the president's credibility was "severely compromised," that the frauds "shock the conscience" and that Trump and his co-defendants showed a "complete lack of contrition and remorse" that he said "borders on pathological."
Engoron also hit Donald Trump Jr. and Eric Trump with $4 million fines and barred all three from helming New York companies for years. New York Attorney General Letitia James accused Trump and his adult sons of engaging in a decade-long scheme in which they used "numerous acts of fraud and misrepresentation" to inflate Trump's net worth in order get more favorable loan terms. The former president has denied all wrongdoing and has said he will appeal.
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Summary of penalties
Donald Trump and his adult sons were hit with millions in fines in the civil fraud trial and barred for years from being officers in New York companies. The judge said the frauds "shock the conscience."
Donald Trump: $354 million fine + approx. $100 million in interest
+ barred for 3 years from serving as officer of NY company
Donald Trump Jr.: $4 million fine
+ barred for 2 years from serving as officer of NY company
Eric Trump: $4 million fine
+ barred for 2 years from serving as officer of NY company
Former Trump Organization CFO Allen Weisselberg: $1 million fine
+ barred for 3 years from serving as officer of NY company
+ barred for life from financial management role in NY company
Former Trump Organization controller Jeffrey McConney:
+ barred for 3 years from serving as officer of NY company
+ barred for life from financial management role in NY company
Eric Trump, leaving court, criticizes case against his family
Standing in the courthouse hallway where his father earlier railed against his civil trial, Eric Trump echoed his father's attacks on the New York attorney general and the case levied against his family, following the adjournment of court for the day.
"We have an unbelievable company. We have some of the best assets anywhere in the world. We've never had a default. We've never missed a payment," Eric Trump said of the Trump Organization.
Like his father, he described the case as politically motivated and decried the involvement of his family.
"They've dragged Don and I and Ivanka into it as collateral damage," he said.
Later, addressing reporters on the courthouse steps, he said that the state's efforts should be focused elsewhere.
"Let's get the murderers off the street. Let's take care of the crime. Let's rebuild our infrastructure. Everywhere you drive in New York, you hit a pothole and your car gets destroyed," he said.
Court adjourned for the day, with Trump on deck for Monday
Judge Engoron adjourned court until Monday, when the state plans to call former President Trump to the stand.
"We will reconvene on Monday at 10 a.m., and the first witness will be...?" Engoron asked state attorney Andrew Amer.
"The only witness will be Donald J. Trump," Amer said.
Eric Trump pressed on Mar-a-Lago valuation
Eric Trump has stepped down from the witness stand after facing an hour of questions from state attorney Andrew Amer.
Amer concluded his questioning by directly asking Eric Trump about the $2 million severance agreement between the Trump Organization and its former CFO, Allen Weisselberg.
"Did you participate in the business agreement to enter into this business decision with Mr. Weisselberg?" Amer asked.
"Yes," Eric Trump said.
"Did your father direct you to enter into this agreement with Mr. Weisselberg?" Amer asked.
"No, he did not," Eric Trump replied. He reiterated, "I did this agreement with Mr. Weisselberg."
Pressed on the value of Trump's Mar-A-Lago property, Eric Trump denied knowing that the club was valued for tax purposes as a commercial property used as a social club.
"It is very clear that Mar-a-Lago is not a club, it is a private residence. I don't see anything wrong with that. 100 percent," Eric Trump said.
Previous testimony and documents in evidence demonstrated that despite the property being restricted by deed to club usage, Donald Trump continued to overvalue the property as if it could be sold as a private residence. Judge Engoron already found that the club was overvalued by 2,300%.
"Mar-a-Lago is a residence that could be sold to a private individual," Eric Trump insisted.
Eric Trump testifies that he signed financial certifications
Eric Trump said that he signed three financial certifications to lenders that relied on his father's statements of financial condition, which are at the heart of the attorney general's case.
"I certified something I believed was accurate. My lawyers told me was accurate, and our financial people told me was accurate," Eric Trump said.
While Eric Trump did not certify his father's financial statements themselves, like his brother Donald Trump Jr., the attorney general has alleged that these certifications to lenders are similarly fraudulent.
Eric Trump said that he did not personally review the methodologies or supporting data for the financial statements themselves, instead relying on lawyers and accountants to verify the documents for him.
"I wouldn't sign something that I thought was inaccurate," he said multiple times.
Defense expert tells AG lawyer, 'You ought to be ashamed of yourself'
Donald Trump's accounting expert snapped at a lawyer for the New York attorney general after the lawyer suggested his opinion was bought by the defense team.
As accounting expert Eli Bartov was testifying about Trump's use of disclaimers in his financial statements, state attorney Kevin Wallace interjected, saying, "This is pure speculation from someone they hired to say whatever it is they want."
Still in the witness box, Bartov began yelling at Wallace about the comment as Trump sat watching a few feet away.
"You make up allegations that never existed," Bartov shouted. "I am here to tell the truth. You ought to be ashamed of yourself for talking like that."
Bartov, in his testimony, said that Trump's use of disclaimers functioned "just like the warning from the surgeon general on a box of cigarettes."
The accounting expert said that Trump's disclaimers clearly flagged to his lenders that they should conduct their own due diligence regarding the figures, rather than rely on them at face value. Witnesses from Deutsche Bank -- Trump's primary lender during the 2010s -- previously testified that they conducted due diligence and significantly undercut the valuations Trump provided in his financial statement when deciding to offer him loans.
"I never saw anything that is clearer than that," Bartov said about the language in Trump's disclaimer clause. "Even my nine-year-old granddaughter Emma would understand this language."
In his pretrial summary judgment ruling, Judge Engoron dismissed Trump's argument that disclaimer clauses protect him from allegations of fraud. While multiple defense witnesses have attempted to rebut Engoron's opinion about Trump's use of disclaimer clauses, the judge has signaled he stands by his opinion.
"My summary judgment is the law of the case on the legal effect of this paragraph or these sentences," Engoron said in response to Bartov's testimony, adding that the clauses "would not insulate the client."
Nevertheless, Trump attorney Chris Kise requested that Engoron reconsider his finding.
"I am fairly liberal in reconsidering my opinions," Engoron said before Bartov resumed his testimony.