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
'This witness is out of control,' Trump attorney says of Cohen
Trump attorney Alina Habba began her cross-examination by having Michael Cohen recount the criminal acts related to his 2018 guilty plea.
"Mr. Cohen, what did you respond?" Habba asked while reading a transcript from his 2018 plea proceeding.
"Guilty, your honor," Cohen said aloud in court.
Habba also read from a sentencing memorandum related to Cohen's plea in which prosecutors wrote that Cohen's crimes "were marked by a pattern of deception that permeated his professional life."
When Habba asked if Cohen lied to his wife about evading taxes, Cohen responded by saying "objection" and attempting to cite legal precedent.
"You can't object. It's a yes or no question," Habba said.
"He is a serial liar, and he lied to his wife," defense lawyer Chris Kise told the judge about why the question is relevant. He later added, "This witness is completely out of control."
Defense begins cross-examination of Cohen
Following the conclusion of the state's direct examination of Michael Cohen, Trump attorney Alina Habba has begun what is expected to be a lengthy cross-examination.
“You understand what 'under oath' means?” Habba asked Cohen at the start of her cross-examination.
“Yes,” Cohen said, after which Habba began to describe Cohen’s previous criminal conduct.
Trump claimed $8B net worth when bidding for Buffalo Bills
When Donald Trump attempted to bid for the Buffalo Bills football team in 2014, he claimed that his net worth was "in excess of eight billion dollars," according to a document entered evidence during Michael Cohen's testimony.
To support the bid, Trump's frequent lender Deutsche Bank sent a letter to Morgan Stanley to demonstrate that Trump had the "financial wherewithal" to support his bid, according to Cohen.
The New York attorney general alleges that Trump used his inflated financial statement to convince Deutsche Bank to support Trump's financial strength.
The line of questioning prompted strong objections from Trump lawyer Chris Kise, who argued that the bid for the Buffalo Bills is not related to any of the attorney general's causes of action.
"I think this is arguably false, particularly the eight billion dollars ... and this shows a pattern of practice of fraud," Judge Engoron said when overruling the objection.
Cohen testifies how Trump's inflated statements were used
Donald Trump used his inflated financial statements to convince journalists about his net worth, to lower his insurance premiums, and even to support his bid to purchase the Buffalo Bills football team, according to Michael Cohen.
Cohen described how the Trump Organization would grant external parties only limited access to the documents themselves, often presenting them during video calls -- rather than handing out the document for external parties to keep -- in the process of demonstrating Trump's net worth.
For example, Cohen described using the documents in a meeting with a journalist from real estate news site "The Real Deal" to "create the story about how much Trump was actually worth," Cohen said.
According to Cohen, Trump Organization executives used Trump's financial statements in meetings with insurance companies to obtain lower premiums, and Trump would occasionally attend these meetings to help move the process along.
"About three quarters of the way through the meeting, Mr. Trump would then come in, and there would be an extended conversion about his net worth, and that he was richer than the insurance companies," Cohen testified, adding that Trump's drop-in to the meeting was pre-planned.
Trump's financial statement also proved vital when Trump attempted to get a line of credit for a 2014 bid to purchase the Buffalo Bills, according to Cohen.
"We can all agree that Mr. Trump never owned the Buffalo Bills," Judge Engoron remarked.
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.