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
Ex-Trump CFO Allen Weisselberg returns to the stand
Former Trump Organization CFO Allen Weisselberg has returned to the stand, nine months after he was sentenced to five months in prison for evading more than $1.7 million in taxes on unreported income in the form of company-provided perks.
One day before his sentencing in January, Weisselberg signed a severance agreement with his former employer saying that if he complied with all the conditions of the agreement, he would receive $2 million spread out over two years, according to court records.
One of those conditions, state attorney Louis Solomon highlighted in court, prevented Weisselberg from voluntarily cooperating with an investigation of his former company or boss.
"I didn't give it a lot of thought, to be honest," Weisselberg said when asked about the section of the agreement preventing him from cooperating with investigators.
"Is it just a coincidence that under this severance agreement, you are being paid $2 million, which is coincidentally the exact amount you were ordered to pay under your guilty plea?" Solomon asked.
"Coincidence," Weisselberg replied.
Bank's loans to Trump were 'good credit decision,' says exec
Deutsche Bank's $378 million in loans to the Trump Organization was a "good credit decision," the bank's former risk management executive told the court at the end of more than a day of testimony.
"I think we did a reasonably thorough analysis of the information," former Deutsche Bank executive Nicholas Haigh testified under cross-examination by the defense.
An internal Deutsche Bank group evaluated Trump's financial information, personally visited Trump Organization offices to review bank and brokerage records, and conducted some appraisals of property explicitly used as collateral, according to Haigh.
Though the value that Deutsche Bank determined for the properties often differed by hundreds of millions of dollars compared to the Trump-provided value, the entities continued to have what internal bank documents described as a "long and satisfactory relationship."
"Using a Deutsche Bank-adjusted value for the assets, the net worth still exceeded $2.5 billion," Haigh said, referring to Trump's net worth as it related to a loan covenant.
When Trump decided to run for president and won the election, Deutsche Bank was supportive of the business relationship, though management was careful to monitor their particularly high-profile client, according to internal bank documents presented at trial.
"Note that the relationship continues to be monitored at the highest levels of senior management within the firm and any issues arising from the Guarantor's status as President of the United States are immediately addressed, taken to the appropriate Reputation Risk committee, and discussed with appropriate legal counsel," a credit report said.
When asked directly if the decision to work with Trump was a "good credit decision" by defense attorney Clifford Robert, Haigh responded, "I generally agree with that."
During redirect questioning, state attorney Kevin Wallace stopped short of directly asking Haigh if he would have still done business with Trump had he known about the inflated value of Trump's assets. But he asked Haigh whether Trump's financial information could have been incomplete.
"You have no way of knowing if there was information that wasn't provided to you?" Wallace asked.
"That is correct," Haigh said, marking the end of his questioning.
Trump expected to attend trial next week, say sources
Former President Trump is expected to return to New York next week to attend the ongoing civil trial, sources tell ABC News.
The former president, who is not required to be in court for the civil proceeding, appeared in court last week for the first three days of the trial.
He is expected to take the stand later in the trial.
Sources tell ABC News that Trump could attend multiple days next week beginning Tuesday.
Trump's attendance could bring him face-to-face with his former attorney and one-time loyal aide Michael Cohen, who is expected to take the stand in the case.
Ex-Trump CFO could face conflicting interest on the stand
Former Trump Organization CFO Allen Weisselberg is back at the New York Supreme Court courthouse today to possibly continue his direct examination.
If Deutsche Bank risk management executive Nicholas Haigh concludes his testimony this afternoon, Weisselberg will return to the witness stand to face questions from state attorney Louis Solomon.
Weisselberg's testimony began on Monday but was postponed to accommodate a scheduling conflict.
While he acknowledged that some of Trump's assets -- like his Trump Tower penthouse apartment -- were overvalued in the firm's financial documents, Weisselberg responded to dozens of Solomon's questions by saying that he could not recall or remember.
The longtime CFO was released from New York's Rikers Island jail complex in April after serving more than three months for tax fraud, after he pleaded guilty to 15 felony charges related to his compensation while working for Trump.
During his testimony on Monday, Weisselberg acknowledged that he signed a $2 million severance agreement with the Trump Corporation in January. That agreement, which was entered into evidence, limits Weisselberg's ability to cooperate with investigators unless compelled by the court, or to disparage the Trump Organization.
The agreement also set a payment schedule for Weisselberg to receive the severance money across eight $250,0000 payments. According to the schedule, he has only received $750,000 so far, with the remaining payments spread out over the coming year.
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.