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


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Trump warned lenders statements may be unreliable, expert says

Donald Trump disclosed that 95% of the assets listed in his 2014 statement of financial condition departed from generally accepted accounting principles -- known in the industry as GAAP -- according to the defense's expert witness Jason Flemmons.

The testimony from the defense's accounting expert bolsters Trump's argument that the departures from GAAP in his statements were adequately disclosed to lenders, making the lenders themselves responsible for drawing their own conclusions about the valuations listed in the documents.

It also supports the defense's position that Trump's statements fell within the regulations on personal financial statements, thus shielding him from allegations of fraud.


Judge delays ruling on mistrial after Trump claims bias

Judge Arthur Engoron did not issue a ruling on the defense's motion for a mistrial in court, opting to give the New York attorney general time to determine if the state wants to respond to the request.

"I would ask if we could have until tomorrow to determine if we want to put in anything," state attorney Kevin Wallace said after Engoron's asked if the state plans to file a response.

The testimony of expert witness Jason Flemmons is now resuming.


Motion accuses judge of 'predetermining' trial's outcome

In their motion for a mistrial, lawyers for Donald Trump and his adult sons argue that Judge Engoron has "predetermined the outcome of this proceeding and is merely going through the motions before it ultimately doles out punishment."

Writing that the actions of both Engoron and his clerk create an appearance of impropriety that has resulted in "biased rulings," Trump's lawyers warn of wide-reaching implications.

"Left unchecked, the introduction of such demonstrable pro-Attorney General and anti-Trump/big real estate bias into a case of worldwide interest involving the front-runner for the Presidency of the United States impugns the integrity of the entire system," they write.

Their three-pronged motion argues that the extrajudicial conduct of Engoron, the political activity of his clerk, and their rulings -- including their gag order and fines -- are each irreparable harms that can only be remedied by scrapping the entire trial.

"Only the grant of a mistrial can salvage what is left of the rule of law," they write.


Trump is 'trying to dismiss the truth,' NY AG spokesperson says

A spokesperson for New York Attorney General Letitia James described Donald Trump's motion for a mistrial as an effort "to dismiss the truth and the facts."

"Donald Trump is now being held accountable for the years of fraud he committed," the spokesperson said. "He can keep trying to distract from his fraud, but the truth always comes out."

Trump's motion for a mistrial takes aim at Judge Engoron as well as his law clerk, who frequently collaborates with the judge before he rules on objections, the admissibility of evidence, and other legal matters.

The judge imposed a limited gag order prohibiting statements about his staff after Trump posted about the clerk on social media.


Rebuttal witness assails Trump's disclosures

State attorney Kevin Wallace concluded his direct examination of the New York attorney general's second and final rebuttal witness amid frequent objections by defense lawyers.

Lewis attempted to explain how Donald Trump's statements of financial condition failed to disclose that he did not conduct a discounted cash flow analysis, contributing to the over-valuation of some of his assets.

"There is no mention of discounting or future value in the disclosure," Lewis said, disagreeing with testimony from defense expert Jason Flemmons -- as well as former Mazars USA accountant Donald Bender, who testified as a state witness.

“Are you impeaching your own witness?” Engoron asked state attorneys regarding whether Bender’s testimony should no longer be considered credible.

"We didn't feel the need to," Wallace responded.

Lewis also suggested that Trump's external accountants at Mazars had less of an obligation to highlight issues that Flemmons suggested, since they were only conducting a compilation report rather than a more intensive audit. While Mazars had an obligation to flag obvious issues, they were not responsible for ensuring Trump's statements were compliant with generally accepted accounting principles, he testified.

"If while doing the compilation ... something comes to the attention of the accounts that could be a GAAP departure, they have a responsibility to bring that issue to the client," Lewis said regarding generally accepted accounting principles.

During the hour-long direct examination, defense lawyers objected at least 14 times, successfully interrupting the line of questions.

"I am lost," Engoron asked at one point. "Can you put this together?"

The parade of objections visibly irritating Wallace, who voiced his displeasure.

"Petulant outbursts don't really play well in the courtroom," quipped Trump lawyer Chris Kise in response.