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.


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


0

Exec's testimony shows 'illicit agreement or scheme,' state argues

State attorney Eric Haren has filed a letter with the court arguing that Trump Organization executive Patrick Birney's testimony yesterday about Trump's net worth should be admissible.

During his testimony, Birney claimed that CFO Allen Weisselberg told him that "Mr. Trump wanted his net worth on the statement of financial condition to go up." Trump lawyer Chris Kise immediately objected to the statement as hearsay.

Judge Engoron then asked both parties to submit two-page memos by today, regarding whether the statements from Birney are hearsay.

"Regardless of its truth, Mr. Weisselberg's statement tends to show the existence of an illicit agreement or scheme," Haren wrote in his letter to the judge.

Haren argued that since Weisselberg is alleged to be a co-conspirator who carried out his "illicit objectives" through Birney, the statement should be considered admissible.


'Cohen didn't have the guts,' to testify, Trump says

While exiting court for a break, former President Trump took a swipe at his former lawyer Michael Cohen, who delayed his testimony in the ongoing trial.

Cohen was scheduled to testify on Tuesday, but postponed his testimony due to a medical issue.

"Cohen didn't have the guts," Trump told reporters in the hallway outside the courtroom.

Trump also continued his criticism of the law used by New York Attorney General Letitia James to bring the case, which he said "doesn't give me any rights whatsoever."

"I'm the victim here," Trump said.


Trump financials cite phone calls that witness says didn't occur

Doug Larson's name appears across five years of Donald Trump's financial documents, according to records entered into evidence.

A longtime professional appraiser with the real estate firm Cushman & Wakefield, Larson was cited in Trump Organization documents as an expert at valuing properties like 40 Wall Street, Trump Tower, and an adjoining retail space called "Niketown." Spreadsheets entered as evidence explicitly reference multiple phone calls with Larson between 2013 and 2017.

When asked about these phone calls in court, Larson testified that no such conversations occurred.

"Is it fair to say that Mr. Trump valued Trump Tower at $526 million in conjunction with you?" state attorney Mark Ladov asked Larson.

"No, that is incorrect," Larson said.

"Were you aware that Mr. McConney was citing you as a valuation source in his work papers?" Ladov asked.

"No, I was not," replied Larson, who said he did not assist Trump Organization executives in valuing Trump Tower, Niketown, or 40 Wall Street, despite Trump's paperwork referencing him as a source.

Evidence presented by the state instead suggested that the valuations were determined using cherry-picked metrics from a generic email Larson sent clients.

"It's a way to get your name out to clients for potential work," Larson said about one such "email blast" that was used in a Trump Tower valuation.

Larson added that the valuations Trump Organization executives determined based on "consultation" with him used flawed methodologies, such as using capitalization rates related to office buildings to appraise the retail Niketown building.

"It doesn't make sense," Larson said about Niketown's $287 million valuation.

"It's inappropriate and inaccurate," Larson said about the Trump Organization relying on his name to support their valuations. "I should have been told, and appraisals should have been ordered."


CFO wanted fees omitted from ledger, exec says

With former President Trump looking on silently from his seat at the defense table, his civil fraud trial turned to the allegedly fraudulent valuation of his 40 Wall Street property.

The Trump Organization's assistant controller, Donna Kidder, testified that around 2012, the company's then-chief financial officer, Allen Weisselberg, instructed her to omit from a financial ledger some of the fees the company charged to manage the building.

Kidder said Weisselberg described it as money that moved within the Trump Organization from "one pocket to another."

The ledger documents, which were provided to the real estate investment firm Ladder Capital, were related to the refinancing of 40 Wall Street.

"Allen Weisselberg said that since they were affiliated entities, management fees could be omitted," Kidder said.

Lowering expenses would make the building's net operating income higher and, thereby, make the building more valuable, state attorneys said. The move helped the Trump Organization claim 40 Wall Street was worth $540 million when its true appraised value was $260 million, said the state.

Kidder also testified about the value of a penthouse apartment in Trump Park Avenue that was rented by Ivanka Trump and Jared Kushner in 2011. The attorney general's office has alleged the apartment was reported at a value several times higher than the agreed selling price.

Kidder testified that Ivanka Trump had been given an option to buy the unit, Penthouse 28, for $8.5 million. However, on statements of financial condition, the Trump Organization valued the apartment significantly higher, at $20.8 million in 2012 and $25 million in 2013.


House Republicans call for probe of Cohen after his testimony

House Intelligence Committee Chair Rep. Michael Turner and House GOP Conference Chair Rep. Elise Stefanik have requested that the Department of Justice investigate Michael Cohen for perjury following his testimony in the trial last month.

During his trial testimony, Cohen said that he lied to the House Permanent Select Committee on Intelligence in 2019 when he said that Donald Trump and Allen Weisselberg did not ask him to inflate Trump's personal statement.

"So, you lied under oath in February of 2019? Is that your testimony?" defense attorney Alina Habba asked in court.

"Yes," Cohen responded.

Shown his 2019 testimony in court, Cohen subsequently reversed himself and said that his 2019 testimony was truthful, explaining the contradiction by clarifying that Trump speaks like a "mob boss" and that he indirectly asked for his statement to be inflated.

In a letter to Attorney General Merrick Garland sent today, Stefanik and Turner requested that the Department of Justice open an investigation into Cohen potentially committing perjury.

"That Mr. Cohen was willing to openly and brazenly state at trial that he lied to Congress on this specific issue is startling," they wrote. "His willingness to make such a statement alone should necessitate an investigation."

Last week, Stefanik sent a separate judicial complaint to the New York State Commission on Judicial Conduct related to the conduct of the judge overseeing Trump's trial. In a statement to ABC News, a court representative said in response that the judge's actions "speak for themselves."