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
Deutsche Bank executives to testify for defense
A day after Trump lawyer Chris Kise asserted that the only person who believes the former president committed fraud in his business transactions is New York Attorney General Letitia James, that claim will face a key test over the next two days as Trump's lawyers call four executives from Deutsche Bank, Trump's primary lender at the time of the alleged conduct.
Trump's lawyers claim that the executives will prove that the bank would have still done business with Trump despite his inflated claims about his assets.
"They're skipping over the part where they have to establish that the gains are ill-gotten, meaning that the loans would not have been issued in the first place or that the terms would have been different," Kise said in November during an argument for a directed verdict.
James, however, says that the banks lost millions in potential interest based on Trump's inflated valuations.
Trump Organization VP returns to witness stand
Trump Organization Vice President Patrick Birney returned to the witness stand to describe his role preparing Trump's statement of financial condition between 2016 and 2021.
"Every new year, I would just copy and paste the spreadsheet from the year before," Birney said, testifying this time for the defense.
Birney largely testified about the spreadsheets of supporting data he prepared, as well as the supporting data he cited from year to year.
Court was adjourned for the day following Birney's testimony. He is set to return to the witness stand later this week after the court hears from witnesses from Deutsche Bank.
Trump exec disputes independent monitor's findings
Trump Hotels chief operating officer Mark Hawthorn disputed an August 2023 report from the Trump Organization's independent monitor that said the company continued to provide incomplete information to lenders.
Hawthorn had earlier testified that the monitor never communicated that they "uncovered fraud or any irregularities."
State attorney Andrew Amer confronted Hawthorn with the letter from the Trump Organization's independent monitor Barbara Jones flagging inconsistencies.
"Were you aware that Judge Jones had identified such inconsistencies?" Amer asked.
"Yes," Hawthorn answered -- but said that he stood by his initial statement that the monitor never uncovered fraud, claiming that the flagged issues were consistent with accounting practices.
"Did the monitor accuse the Trump Organization of disseminating false and misleading information?" defense attorney Clifford Robert asked on redirect examination.
"No," Hawthorne said.
Trump defense attorney Chris Kise used the disagreement about the monitor's findings to renew his request to question Jones, which Judge Engoron denied earlier in the afternoon.
"What the monitor thinks is clearly and squarely at issue," Kise said, describing the Trump Organization's issues as "minor accounting discrepancies which happen in a large corporation all the time."
"Every time you talk, there's a campaign speech," Engoron quipped following Kise's lengthy argument.
Engoron ultimately stood by his initial ruling, but said he would allow Kise to present cases, if they exist, supporting the defense's right to call the monitor.
"I will decide what reports mean and what implications there are," Engoron said about the monitor's findings.
Donald Trump to return to witness stand in December
Defense lawyers plan to call Donald Trump as their final witnesses in the former president's civil fraud trial.
Asked to confirm the final witnesses for the defense's case, defense attorney Chris Kise said that Trump is likely to testify on Dec. 11.
"I think we can make that work," Kise said, adding that Trump's exact schedule might change.
Eric Trump will also return to the witness stand on Dec. 6, according to Kise.
Those dates might change if Judge Engoron limits testimony from any of the remaining witnesses.
State attorney Kevin Wallace said that the New York attorney general may present a "minimal" rebuttal case.
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.