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
Trump attorney says sons made no misrepresentations
An attorney for Donald Trump's adult sons, Eric Trump and Donald Trump Jr., added a brief opening statement of his own, defending his clients from accusations of wrongdoing.
"There was never a material misrepresentation made by Eric Trump or Donald Trump Jr.," said Clifford Robert, the attorney for Trump's adult sons, who help run the Trump Organization.
Robert said he disagrees "with just about everything" the state's prosecutor said in his opening remarks, and took aim at the state's star witness.
"Their major linchpin is Michael Cohen, a guy who lies to everyone," Robert said of the former Trump attorney.
AG's case sets 'dangerous precedent,' defense says
Attorney General Letitia James "is setting a very dangerous precedent for any business in the state of New York," warned Trump attorney Alina Habba in her opening statement.
Habba told the court she hadn't planned to make opening remarks, but that she felt moved to speak after hearing the state present its own opening statement. Habba accused the attorney general of targeting Trump before taking office, claiming the investigation and lawsuit were personal in nature.
"We are attacking a sitting president and two of his children and his employees for a statement of financial condition which is frankly worth less than what they are worth," Habba said.
Habba reiterated many of the points made earlier by co-counsel Christopher Kise, highlighting the fact that "these lenders made money," and arguing that "real estate is malleable -- the values change."
After Habba concluded her remarks, Judge Engeron engaged her in a series of follow-up questions, asking about her claim that the property appraisals at issue were "undervalued" by prosecutors.
Habba replied that "the Trump brand is worth something."
'The attorney general has no case,' defense counsel says
Former President Trump's defense counsel will present a "very different picture of the evidence" than the prosecution alleges, and will demonstrate that "there are many ways to value assets," according to opening remarks from Christopher Kise, Trump's lead attorney.
"We think the evidence is going to establish … President Trump has made billions of dollars building one of the most successful real estate empires in the world," Kise said, reiterating sentiments he conveyed in pretrial motions.
Kise offered a glimpse into the former president's defense, including plans to present testimony from a New York University professor who will explain that "there is no one generally accepted procedure to determine the estimated current value" of a property.
Other defense witnesses, including four Deutsche Bank officers who were involved in approving Trump's loans, will explain how they were able to craft their own independent risk analyses meant to mitigate the claims of fraud that are core to the state's case.
"Anyone committing fraud does not tell the other side, 'Please do your own analysis,'" Kise said regarding Trump's instructions to lenders.
Kise also previewed plans to undermine the state's key witness, former Trump attorney Michael Cohen, who Kise said has "lied to everyone and anyone he has come in contact with."
Kise reiterated the defense's claim that Trump did not commit fraud and that there were no victims of his alleged conduct.
"The attorney general has no case," Kise said.
Defendants were 'lying year after year,' prosecutors say
Prosecutors intend to prove in the coming months that "each defendant engaged in repeated, persistent, illegal acts in conduct of business," according to the opening statement from Kevin Wallace of the attorney general's office.
Referring to Judge Engoron's partial summary judgment last week, Wallace said that "the people have already proven" that former President Trump used "false, misleading" statements that were "repeatedly [and] persistently used in the conduct of business."
But prosecutors will further demonstrate that Trump and his co-defendants knew those statements were false and continued to peddle them anyway in furtherance of their alleged scheme, Wallace told the judge.
"The defendants were lying year after year," he said.
Wallace played clips of video depositions to punctuate his remarks, including testimony from Trump himself, as well as Eric Trump and former Trump attorney Michael Cohen -- whose congressional testimony years ago precipitated the state's investigation and some of the key allegations underpinning their case.
"The goal was to use each of [Trump's] assets and increase its value in order to get to the end result number," Cohen said during his taped deposition. "It was essentially backing in numbers to each of the asset classes in order to attain the number that President Trump wanted."
Trump and his co-defendants "knew that a high net worth was necessary to get and maintain certain financial benefits," Wallace said, pointing to basic principles of accounting and finance.
Throughout Wallace's remarks, the attorney general's office flashed graphics on television screens inside the courtroom showing some of the alleged inflated values of Trump's properties alongside the amounts the properties were appraised at.
Seated in his chair with his arms crossed, Trump visibly shook his head at times during the prosecutor's opening statement. At one point he seemed to mutter something under his breath.
The former president whispered with his attorneys throughout.
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.