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
Court affirms pausing dissolution of Trump Organization
A panel of five appellate judges has affirmed a judge's Oct. 6 decision that paused the dissolution of the Trump Organization.
Judge Peter Moulton issued a ruling during the first week of the trial pausing the immediate cancellation of Donald Trump's business certificates, as ordered by Judge Arthur Engoron in his partial summary judgment ruling on the eve of the trial.
Trump's attorneys argued in favor of the stay of enforcement action until the end of the trial, and the New York attorney general supported their argument.
Today's ruling formally pushes a decision on the fate of the Trump Organization into the new year, when Engoron issues his final ruling in the case.
Trump in attendance for accounting expert's testimony
Donald Trump is back in court as a spectator, marking the first time the former president has attended the proceeding in over a month.
Trump entered the courtroom alongside his legal spokesperson Alina Habba and his son Eric Trump, who canceled his testimony that was initially scheduled for yesterday. Notably absent from the courtroom is New York Attorney General Letitia James.
Previewing today's testimony from New York University accounting professor Eli Bartov, Trump said on his way into the courtroom that he has "one of the greatest experts in the country" taking the stand today.
"We did nothing wrong. There were no victims. The bank loves us," Trump said.
Donald Trump set to attend trial today
Donald Trump is set to return to his civil fraud trial as a spectator today, marking the first time the former president has attended the proceeding in over a month.
Trump has attended eight of the trial's 41 days, including when he testified as the last witness in the state's case on Nov. 6. He is scheduled to return to the stand as the final witness in the defense's case on Monday.
This morning, Trump's lawyers will call New York University professor Eli Bartov as their second-to-last witness.
Trump attorney Chris Kise cited Bartov's testimony in his opening statement as vital to proving that Trump fully complied with all accounting rules and regulations when he submitted his statements of financial condition, which underpin the attorney general's allegations in the case.
"The statements are ... the beginning, not the end, of a highly complex valuation process," Kise said.
Potential for violence justifies gag order, judge's lawyer argues
Judge Arthur Engoron's attorney argues in a new court filing that the willingness of Donald Trump's followers "to engage in violence to show their support" for Trump justifies the limited gag order in the former president's civil fraud trial.
Trump filed an Article 78 proceeding against Engoron earlier this month to remove the gag orders the judge imposed prohibiting him from commenting on the judge's staff, but a panel of judges vacated a temporary stay of the gag orders last week.
"It is undisputed that Mr. Trump has an inordinate ability to draw attention, fervor, and animosity to those he singles out for attention. Whether he seeks it or not, some of Mr. Trump's followers are willing to engage in violence to show their support," said Engoron's attorney Michael Suidzinski, an assistant deputy counsel with the New York State Office of Court Administration.
Engoron's attorney questioned Trump's need to speak about the judge's staff during the trial or his campaign, adding that the gag order still permits him to criticize Engoron, the attorney general, the case itself, witnesses, and the entire judicial process.
"It is unclear, however, how his ability to talk about Justice Engoron's court staff is necessary for his campaign when this country faces a number of issues more worthy of debate," Suidzinski wrote.
"Given the real and demonstrated likelihood of harm that could come to Justice Engoron's court staff if the gag orders were annulled, Justice Engoron's legitimate and justifiable interest in preventing such harm greatly outweighs the de minimis interference to Mr. Trump's rights," Suidzinski wrote.
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.