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.
Trump Jr. pressed about departure of ex-CFO
Donald Trump Jr. struggled to answer questions when pressed about why former Trump Organization CFO Allen Weisselberg departed the family's firm.
"Because some legal issues he got himself into," Trump Jr. said, declining to offer specifics about Weisselberg's guilty plea on tax evasion charges last year.
Previously giving lengthy answers to questions about his background and even smiling with the judge, Trump Jr. appeared tense on the witness stand as he answered questions about Weisselberg.
"The specific event was he was indicted," Trump Jr. said.
He added that when began working for the Trump Organization as an executive vice president in the 2010s, Weisselberg outranked him. Trump Jr. would seek Weisselberg's approval for certain business decisions such as refinancing loans.
"Who is above you in your role as an executive vice president in the Trump Organization?" state attorney Colleen Faherty asked.
"Obviously I would have reported to my father in that period of time … people like Allen Weisselberg would have still been senior to me," Trump Jr. said of that time period.
Trump Jr. said he gained more responsibility in 2016 when his father became president and he was named a trustee of his father's revocable trust. He said that he, Weisselberg and his brother Eric Trump became a kind of triumvirate running the Trump Organization.
"We stopped reporting to my father on decisions involving the business," Trump Jr. said.
That relationship broke down once Weisselberg got himself into "legal issues," Trump Jr. said. He testified that he could not recall the circumstances of Weisselberg's exit, including the multimillion-dollar severance deal that Weisselberg received, which Weisselberg faced questions about during his own testimony earlier this month.
"I have no knowledge of the specifics of how it happened. He is no longer working at the Trump Organization," Trump Jr. said of the former CFO.