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
Controller testifies he relied on outside accountants
With an overwhelming number of entities to track in addition to numerous other responsibilities, the Trump Organization's longtime controller Jeffrey McConney said he relied on outside accountants to put together Trump's statements of financial condition.
While the statement took up a portion of his time between July and October each year, McConney testified that he otherwise spent "very little time" on the financial statements that underpin the attorney general's case.
The descriptions of each entity in the statements, and the disclaimers, largely remained the same year after year, according to McConney.
"A lot of this was Gerald Rosenblum's writing," he said about the section describing Trump Tower, referring to a former outside accountant.
"Whose words are those?" defense attorney Jesus Suarez said about a disclaimer that said that the value of "Donald J. Trump's worldwide reputation" was not considered in the statement.
"Mazars," McConney responded.
He added that Trump would make any change that Mazars recommended and largely followed the lead of then-Mazars accountant Donald Bender when modifying the statement.
"If [Bender] had items that he needed on the statement to change, we made the change," McConney said.
Controller denies keeping documents from outside accountants
Longtime Trump Organization controller Jeffrey McConney, a defendant in the attorney general's case, denied withholding any documents from the company's outside accountants -- appearing to contradict testimony from Mazars USA accountant Donald Bender.
"We provided him everything he needed," McConney said, adding that Bender could request any document he wanted from the Trump Organization.
McConney, testifying for the defense, added that Bender also could directly communicate with individuals in the Trump Organization to directly ask questions during the process of organizing Trump's financial statements that are at the center of the case.
"Bender would come in and talk to anyone he wanted," McConney said.
When Bender testified last month during the state's case, he said that he directly asked McConney if the company had more appraisals, to which McConney responded, "That's all we have."
"They were not giving us all the documents that we needed, potentially, to compile the compilation," Bender testified.
Asked about the allegation on the witness stand, McConney denied he withheld anything from Bender.
"Did you ever hide anything from Donald Bender?" defense attorney Jesus Suarez asked.
"No," McConney responded.
Co-defendant Jeffrey McConney returns to stand
Forty-five days after he began his testimony as the third witness in the state's case, former Trump Organization controller and co-defendant Jeffrey McConney has returned to the witness stand for the defense.
When he testified last month, McConney -- who was the primary person responsible for the valuations in Trump's statement of financial statements between 2011 and 2017 -- struggled to recall specific details about the preparation of the financial documents, though he acknowledged he took direction from Eric Trump about the value of a Westchester golf course.
This afternoon, after asking some preliminary questions about McConney's biography, defense attorney Jesus Suarez began asking McConney pointed questions about Mazars USA accountant Donald Bender, another witness in the state's case.
"Whatever he asked for, we would do," McConney said about Bender's role in the process of compiling Trump's financial statement.
Defense expert gave inconsistent testimony, state attorney claims
State attorney Andrew Amer began his cross-examination of defense expert David Miller by highlighting that his testimony appeared to contradict Miller's own expert report.
During his direct examination, Miller was asked if he has ever seen any insurance underwriters rely on media outlets when reviewing their surety programs.
"Prior to this, no," Miller responded, referencing how underwriters at Zurich cited articles from Forbes and USA Today in their 2021 annual review of Trump's policies.
However, Miller's own report acknowledged that "some underwriters do not require financials and instead use their experience and other means (such as Forbes and USA Today) to satisfy their underwriting needs."
When Amer suggested that the finding in Miller's report appeared to directly contradict his testimony, the defense objected.
"It seems completely inconsistent. What am I missing?" Judge Arthur Engoron responded.
Miller clarified that he has seen underwriters cite external sources like media reports; however, the Zurich document was the first time he specifically saw Forbes and USA Today cited as sources.
1st witness eyes Trump's decade-old financial statements
Testifying about the preparation of the Trump Organization's statements of financial condition in 2011, former Mazars USA accountant Donald Bender said Trump executives largely provided the input data for statements, in addition to dictating the standards by which the work was completed.
"We would cut and paste that information into a new worksheet," Bender said about the approach taken by Mazar after receiving new data from co-defendant Jeffrey McConney of the Trump Organization.
When asked about the compliance with the Generally Accepted Accounting Principles -- which Bender testified are the standards for accounting in the United States -- Bender repeatedly placed responsibility in the lap of the Trump organization.
"That was the Trump Organization's responsibility," Bender testified about GAAP compliance.
Bender acknowledged that he rarely questioned the inputs from the Trump Organization, and when he did, he largely dealt with McConney and executives other than Trump and his adult sons.
Repeatedly asked by the state attorney if Mazars would have issued the statements if they had known the Trump Organization included material misrepresentations in their data, Bender reiterated that Mazars would not have issued the statements.
When Judge Engoron remarked at the end of the trial day that the state would still need to present further evidence to prove that the 2011 statement was within the statute of limitations, Trump seized the statement as a partial victory.
"The last five minutes was outstanding, because the judge actually conceded that the statute of limitations … is in effect," Trump told reporters as he was leaving court.
Engoron, however, did not completely rule out the 2011 evidence during trial, instead appearing to remind counsel that they need to show the 2011 statement represents an ongoing concern that falls within the statute of limitations.
Testimony is scheduled to resume on Tuesday at 10 a.m. ET.