Trump civil fraud case: Judge fines Trump $354M, says frauds 'shock the conscience'

State attorney Louis Solomon focused on the activities of The Donald J. Trump Foundation, Trump's defunct charity organization, during his direct examination of tax lawyer Sheri Dillon.

Dillon, who worked with Trump between 2005 and 2020, testified that she received a letter from the New York attorney general in 2016 regarding a potential violation by Trump's charity, which she discussed with then-Trump Organization CFO Allen Weisselberg.

Solomon's line of questioning prompted an objection from Trump's attorney Chris Kise, who argued that Trump's charity was irrelevant to the state's case. But Judge Engoron overruled the objection.

"To me, this case is not just about financial statements being submitted to insurance companies. It is about whether or not defendants were committing fraud," Engoron said. "If the evidence shows a particular defendant was consistently acting fraudulently, the law says there can be particular forms of equitable relief."

Dillon testified that she could not recall if Trump Organization executives notified potential insurers about the violation.

Then-New York Attorney General Barbara Underwood sued the Trump Foundation in 2019 for using money set aside for charitable purposes to settle business disputes and cover political expenses. Trump was eventually ordered to pay $2 million to various charities as part of a settlement.

Judge Engoron is upholding Donald Trump's $10,000 fine for violating the case's limited gag order yesterday.

During a break, Engoron said he reviewed the video of Trump's hallway statement and reached the same conclusion as yesterday: that Trump was referring to Engoron's law clerk when he told reporters that the judge has a "person who is very partisan sitting alongside of him." The gag order prohibits public comments about the judge's staff.

Trump's lawyer Chris Kise had argued that a later portion of Trump's statement supported that he was referring to Michael Cohen, rather than the judge's law clerk.

But Engoron disagreed, saying, "That was a clear transition from one person to another, and I think the person he originally referred to is very clear."

Defense attorney Chris Kise requested that Judge Engoron again reconsider his decision to fine Donald Trump $10,000 for violating the case's limited gag order yesterday, offering a broader criticism of the gag order based on First Amendment grounds.

"This is open, public, and the defendant has a First Amendment right to comment on what he sees and perceives as a potential source of bias," Kise said.

Like yesterday, Kise maintained that Trump was referring to Michael Cohen, rather than the judge's law clerk, during his hallway statement in which he said the judge has a "person who is very partisan sitting alongside of him." Trump attested to this on the stand yesterday, though Engoron found that Trump was "not credible."

"The review of the statement does not support the sanction," Kise said.

Even if Trump was referring to the clerk, Kise made a broader argument that the gag order itself was "constitutionally infirm," considering Trump is the "leading candidate" for the presidency.

"I don't think that the order survives constitutional scrutiny," Kise said.

State attorney Andrew Amer argued in support of the gag order, which he said was narrowly limited to withstand constitutional scrutiny.

"A federal judge in D.C. has issued a similar order to protect herself," Amer added, referring to a ruling in Trump's election interference case.

Judge Engoron said he would reconsider the fine but stood by his gag order.

An underwriter who worked on a Trump Organization insurance policy to cover legal expenses incurred by the firm's executives is scheduled to testify this morning.

Michael Holl, an underwriter at Tokio Marine HCC, worked on the Trump Organization's Directors and Officers insurance policy in 2016 and 2017, according to the New York attorney general.

With Donald Trump about to be inaugurated president at the time, the Trump Organization attempted to increase their policy's limit to $50,000,000, which was ten times higher than their previous limit, according to the attorney general.

"In response to specific questioning from the underwriters, the Trump Organization personnel represented that there was no material litigation or inquiry from anyone that could potentially lead to a claim under the D&O coverage," the state alleged in their complaint.

However, four months before that representation was made, Trump Organization executives learned about an ongoing investigation by the attorney general into the Trump Foundation as well as Trump family members, according to the complaint.