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
'Cash crunch' drove Trump to fraud, state alleges
The competing obligations between the costs of Donald Trump's 2016 presidential campaign and his business obligations created a "cash crunch" at the Trump Organization that motivated the former president to commit fraud, state attorney Kevin Wallace argued during his summation.
Wallace's theory about the motivation for the alleged fraud, which he articulated for the first time, attempted to explain Trump's motive for the alleged conduct as well as justify levying a fine against Trump in order to regulate the marketplace.
According to Wallace, the hundreds of millions of dollars saved by the Trump Organization through fraud allowed the company to "stay afloat" during a major "cash crunch" during the 2010s.
During the first half of the decade, the Trump Organization spent roughly $775 million to renovate properties including its Doral and Turnberry golf courses, as well as the Old Post Office building in Washington, D.C., Wallace said. The idea that the company could have funded these expenses with cash alone was a "fantasy," according to Wallace.
"By the time you get to 2017, Mr. Trump was becoming president, and the company was getting low on cash," Wallace said. Faced with the chance of a negative cash flow, the company opted to embrace fraud, according to Wallace.
"They didn't have to choose between their priorities," Wallace said about the company's business expenses and Trump's presidential campaign.
Trump attorney Chris Kise objected to the argument, suggesting the theory was nothing more than conjecture -- which prompted a heated exchange with Wallace.
"Chris. Stop. We didn't interrupt the defendants' presentation at all," Wallace shouted while facing Kise.
"I think I agree with Mr. Kise," Judge Engoron responded, but he allowed the presentation to continue.
State attorney says defense provided 'no new facts'
"We're back to hearing the same arguments," Kevin Wallace, an attorney with the New York state AG's office, began his closing statement following closing arguments from Trump's defense team.
"Donald Trump is rich, banks like rich people," Wallace said. "What we have not heard from defendants is any new facts."
Wallace said the defense failed to assert that any of the alleged fraud was a mistake, other than the overvaluation of the Trump Tower penthouse, and that the defense did not argue the numbers Trump used on his statements of financial condition were accurate.
"If you look at it across time, it becomes clear that fraud was central to the operation of the Trump Organization's business," Wallace said.
Wallace took aim at the testimony of defense expert witnesses, calling them a "murderer's row of experts" who Trump collectively paid at least $2.5 million.
"None of the experts actually presented evidence that is helpful to the court as a fact-finder," Wallace claimed.
Defense attorney Chris Kise stood up to interject, calling Wallace's murderer's row reference "outrageous." Wallace joked he was referring to the 1927 Yankees.
Trump, outside court, says 'it's been a pretty successful trial'
Moments after delivering his closing statement, Donald Trump exited the courtroom to criticize the trial as politically motivated.
"This is a political witch hunt the likes of which nobody's ever seen before. They owe me damages for what they've done," Trump said, repeating his claim that the case against him would scare businesses away from New York.
Nevertheless, the former president appeared pleased with his defense.
"It's been a pretty successful trial," said. "I don't know that we're going get a fair ruling. But everybody knows what I just said -- this is a sham and it's a shame," Trump said.
With the defense team's closings concluded, the state's closing is scheduled to begin following a break.
'Not how this should have been done,' judge says of Trump statement
Judge Engoron mostly kept his head down for the duration of Donald Trump's closing summation, which Trump delivered from his seat at the defense counsel table.
"This is not how this should have been done," Engoron said seconds before Trump launched into his statement, which contained several accusations that Engonron had tried to prohibit Trump from making.
Calling the state attorneys "disgraceful" and the statute used against him "vicious," Trump repeated many of his lawyer's claims before arguing that he is the only victim of fraud in the case.
Trump also criticized Engoron himself, claiming that the judge would not listen to him.
"You can't listen for one minute," Trump said.
"Mr. Kise please control your client," Engoron said while attempting to reign in Trump. But Trump continued.
"I did nothing wrong. They should pay me for what we had to go through," Trump said. "She sued me to try to get publicity," he said of New York Attorney General Letitia James.
Engoron then held up his phone screen to signal to Trump that he had run out of time for his remarks, then the judge called for a break.
AG requests forensic review of Trump Organization data
New York Attorney General Letitia James is requesting a forensic review of Trump Organization electronic data after identifying a missing set of emails between former CFO Allen Weisselberg and a real estate executive.
"The failure to produce these later emails indicates a breakdown somewhere in the process of preserving, collecting, reviewing and producing documents," state attorney Kevin Wallace wrote in a letter to Judge Arthur Engoron.
The request follows an accusation from Forbes Magazine, reported in a story last week, that Weisselberg committed perjury on the stand, based on "old emails and notes, some of which the attorney general's office does not possess." Despite Weisselberg testifying that he "never focused on the apartment," the Forbes story said that he "played a key role in trying to convince Forbes over the course of several years that it was worth more than it really was."
The letter from the attorney general appears to focus on an email exchange related to the value of Trump's golf courses, rather than the value of his Trump Tower penthouse at the center of the Forbes accusations.
"We would therefore propose that the Monitor undertake a forensic examination of electronic data held by the Trump Organization for the very brief period August to September of 2016 to determine if all responsive information has been produced," Wallace wrote.
While Weisselberg's testimony concluded last Thursday, both parties have reserved the right to call the former Trump Organization CFO back to the stand.