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.
Top headlines:
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
Judge denies Trump's request for mistrial
Judge Arthur Engoron denied Donald Trump's request for a mistrial, describing the defendants' arguments as "nonsensical," "disingenuous," and "utterly without merit."
Engoron rejected the motion without hearing any arguments from the New York Attorney General, who earlier this week requested that an extended briefing be scheduled.
"I cannot sign a proposed order to show cause that is utterly without merit, and upon which subsequent briefing would therefore be futile," Engoron wrote in his ruling.
Across a four-page order, Engoron sharply disagreed with the allegations from the defendants that he was engaging in "co-judging" with his law clerk.
"As I have made clear over the course of this trial, my rulings are mine, and mine alone. There is absolutely no 'co-judging' at play," Engoron said.
Addressing his principal law clerk's political donations, which the judge said she has largely made in order to purchase tickets to functions while pursuing elected judicial office, Engoron called out the defendants for failing to acknowledge the "applicable unambiguous ethical guidelines" that permit such donations. He similarly dismissed the idea that his clerk attending events sponsored by political organizations implies that she supports any position taken by those groups.
"Such arguments are nonsensical; and in any event, they are a red herring, as my Principal Law Clerk does not make rulings or issue orders -- I do," Engoron said in his ruling.
Court was subsequently adjourned for the day.
Defense expert questions insurance company's due diligence
The due diligence conducted by the Trump Organization's insurance company amounted to nothing more than "airballs and witchcraft," according to the defense's underwriting expert Gary Giulietti.
Giulietti's testimony appeared to cast doubt on the extent to which the Zurich Insurance Group scrutinized Trump's financial documents that are at the center of the case.
In a deposition that was played earlier in court, Zurich insurance underwriter Claudia Mouradian said she relied on assurances that the Trump Organization's $6 billion in assets were supported by appraisals.
"They should have asked if they wanted it," Giulietti testified, adding that Zurich's approach of relying on media reports about Trump's net worth was "inconsistent" with industry standards.
Giulietti acknowledged that he had an ongoing business relationship with Trump, including making $1.2 million in commissions from the company in 2022. A personal friend of Trump, Giulietti confidently defended his business record on the stand.
"You're sort of insulting me aren't you?" he said after state attorney Andrew Amer, on cross-examination, questioned his qualifications as an expert witness. "There's no one like me in the industry."
He later said he was sorry for his response.
"I would like to apologize to the counsel. Not my style," he told Amer.
Defense expert appears to contradict his own findings
The cross examination of the defense's real estate expert, which was expected to last at least two hours, ended abruptly after he appeared to contradict his own findings in the expert report he had compiled.
Steven Laposa testified yesterday that he believed the attorney general's report was "flawed" because it was based on the market value of Trump's assets, rather than their investment value, which could be much higher.
Minutes into his cross-examination, state attorney Louis Solomon requested that Laposa read the second sentence of the notes section of Donald Trump's statement of financial condition.
"Assets are stated at their estimated current values," the note said, referring to the properties' market value.
"First time I've seen this," Laposa responded after reading the note, which supported the attorney general's contention that the valuations were indeed based on market values.
"You wrote a report accusing the attorney general of bias" by using market values, Solomon lectured Laposa, prompting a sustained objection from the defense.
Solomon's cross-examination of Laposa concluded after the exchange.
Judge limits testimony about 'trophy properties'
The defense's real estate expert Steven Laposa resumed his testimony this morning by testifying about Donald Trump's "trophy properties."
Under questioning from the defense, Laposa explained that certain unique and iconic properties could be classified as trophy properties, which are generally purchased by a smaller pool of real estate investors. Trump's lawyers have claimed that the former president's assets include multiple trophy properties that were undervalued in his financial statements.
When Laposa attempted to describe how trophy properties are generally valued differently compared to normal buildings, state attorney Louis Solomon objected to the line of questioning, calling it a "waste of time."
Judge Arthur Engoron sustained the objection.
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.