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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Judge to allow testimony from Mar-a-Lago experts

Judge Engoron denied two motions by the New York attorney general that would have precluded testimony from two experts on the value of Donald Trump's Mar-a-Lago property.

In his pretrial ruling, Engoron decided that Trump inflated the value of the oceanfront property by 2,300% by listing its value at least $426 million, despite a tax appraiser determining its value at $27.6 million.

Trump and his lawyers have repeatedly criticized Engoron's finding, arguing that he misunderstood the purpose of a tax appraisal, and they planned to call two experts to support Trump's value of the property: John Shubin to testify about the deed that the state says limits the estate's value because it restricts the use of the property to a club, and Lawrence Moens, one of the top real estate brokers in Palm Beach.

State attorney Kevin Wallace argued that Shubin would offer impermissible legal opinions, and Moens could not offer a traceable process for evaluating the property.

"He is extremely different than a doctor [explaining] how he might conduct a surgery. He is providing evaluation advice," Wallace said about Moens' testimony.

Engoron denied the state's motions, allowing them both to testify -- but said he would enforce objections if they overstep their areas of expertise.


Bank and judge agreed on Trump's net worth, expert points out

Defense expert Robert Unell testified that both Judge Engoron and Deutsche Bank reached similar conclusions about Donald Trump's actual net worth -- but that Deutsche Bank officials weren't bothered by their determination.

In his partial summary judgment ruling before the trial, Engoron found that the New York attorney general provided "conclusive evidence" that Trump inflated his assets between $812 million and $2.2 billion.

"Even in the world of high finance, this Court cannot endorse a proposition that finds a misstatement of at least $812 million dollars to be 'immaterial,'" Engoron wrote.

Similarly, Deutsche Bank's valuation services group undercut Trump's net worth estimate by roughly than $2.4 billion when they evaluated his 2013 statement of financial condition. Despite that, the bank still loaned Trump millions for three of his properties.

"It would not be unusual," Unell said about the discrepancy identified by the bank.

Engoron cut him off before he could answer whether the discrepancy was within the "adjustment within the range that the court determined."

"I can do the math," Engoron said.


Trump easily qualified for private banking loans, expert says

The defense's commercial real estate expert pushed back on the state's contention that Donald Trump used fraudulent means to gain access to favorable loan rates through Deutsche Bank's private wealth management division.

Defense expert Robert Unell testified that Trump "clearly qualified" for commercial loans through the bank's private wealth group.

State attorney Kevin Wallace had argued that Trump "lied to the private wealth group to get these loans," which would support an increased fine in the case.

Unell, however, said, "I have not seen or heard any evidence that President Trump did not qualify for the private wealth management group."

Deutsche Bank managing director Dave Williams, whose testimony Unell reviewed before taking the stand, said earlier that Trump easily met the bank's $100 million net-worth requirement for high-net-worth individuals.

Wallace, however, appeared to argue that Trump would have been disqualified from the private wealth division based on the act of submitting an allegedly false financial statement, rather than an inability to meet a net-worth requirement.


Judge backs argument that Trump fraudulently got better loan terms

State attorney Kevin Wallace, challenging the testimony of an expert witness for the defense, angrily argued that Trump used fraudulent means to gain access to favorable loan rates through Deutsche Bank's private wealth management division.

The exchange came during Wallace's cross-examination of defense expert Robert Unell, who disputed the state's claim that Trump's alleged misstatements cost lenders $168 million in lost interest because, Unell said, the loan rates the state used in their calculation were higher than the rates Trump was entitled to when he used a personal guarantee as a private wealth client.

"Once you are in the private bank, you are in this sort of rarified air, and you get access to these rates ... it is a flawed premise to say you have to compare it to the outside air," argued Trump attorney Chris Kise after Judge Arthur Engoron removed Unell from the courtroom so the attorneys could hash out the permissibility of Wallace's argument.

Shouting at Kise for repeatedly making lengthy objections, Wallace argued that Trump would have not qualified for the private bank rates had he not fraudulently overstated his assets.

"The court has found that Mr. Trump committed fraud," Wallace said. "To get into the private wealth group, he committed fraud."

"He lied to the private wealth group to get these loans. Therefore, we are looking at what the interest rate would have been had he not had access to the group he lied to," Wallace said of the state's calculation.

Overruling Kise's objection, Engoron said that he supported Wallace's theory.

"I think his explanation is correct," Engoron said.


Trump's closing argument in doubt after heated email exchange

Former President Donald Trump's plan to deliver part of his closing argument Thursday, as reported yesterday by ABC News, is now in doubt after he failed to meet a deadline to agree to limitations imposed by Judge Arthur Engoron.

According an email exchange between Engonon and defense counsel that was posted to the public docket Wednesday, Engoron said that Trump would have to follow the case's limited gag order, and that he would not be allowed to "impugn" the New York attorney general or her staff -- limitations that Trump attorney Chris Kise rejected, calling them "untenable."

"The limitations I am imposing, in my absolute discretion, are not subject to further debate. Take it or leave it," Engoron replied on Jan. 9, according to the email thread.

When Trump's lawyers missed the first deadline set by Engoron, the judge determined that Trump could not testify. Kise then responded that he did not see the deadline and requested that the closing arguments be postponed because of the death of Melania Trump's mother on Tuesday.

"I am sad to advise the Court that Mrs. Trump's mother passed away this evening. Because of the challenges presented by this deeply personal family matter, President Trump has asked that I request the Court postpone the date for closing argument," Kise wrote yesterday.

Engoron promptly denied the request and said the closings would continue as planned.

"On balance, going forward makes the most sense. Please tell Mr. Trump that I am sorry," Engoron wrote.

Kise informed Engoron that Trump still planned to attend the closings and speak.

"Despite the fact that his Mother-in Law, who he was very close to, passed away late last night, President Trump will be speaking tomorrow," Kise said in an email this morning.

When Engoron asked for assurance that Trump agreed to his rules, Kise pushed back, writing, "You are not allowing President Trump, who has been wrongfully demeaned and belittled by an out of control, politically motivated Attorney General, to speak about the things that must be spoken about."

"I won't debate this yet again. Take it or leave it. Now or never. You have until noon, seven minutes from now. I WILL NOT GRANT ANY FURTHER EXTENSIONS," Engoron replied at 11:54 a.m.

After Kise failed to respond, Engoron emailed him at 12:12 p.m. that he assumed Trump would not be speaking and that their email exchange would be posted to the court's public docket.

Responding to the development, Trump's legal spokesperson, Alina Habba, said in a statement to ABC News: "Is anyone surprised anymore?"