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
Trump loses bid to throw out limited gag orders, fines
Donald Trump has lost his appeal to throw out the limited gag orders and associated fines in his civil fraud trial.
In a decision Thursday, New York's Appellate Division, First Department rejected Trump's request to annul and vacate the limited gag orders imposed by Judge Arthur Engoron that prohibit Trump and attorneys from commenting on the judge's staff.
In November, Trump's lawyers asked the Appellate Division to vacate the gag orders, citing a provision of New York state law to personally sue Judge Engoron. But the court said in today's ruling that the method used to appeal the gag orders was an improper application of the law.
"To the extent there may have been appealable issues with respect to any of the procedures the court implemented in imposing the financial sanctions, the proper method of review would be to move to vacate the Contempt Orders, and then to take an appeal from the denial of those motions," the ruling said, indicating that Trump should use the normal appellate process to pursue the vacating of the gag orders.
The court also determined that the "extraordinary remedy" requested by Trump's lawyers did not match the minimal potential harm from barring statements about Engoron's staff.
"Here, the gravity of potential harm is small, given that the Gag Order is narrow, limited to prohibiting solely statements regarding the court's staff," the decision said.
Trump's lawyers denounce trial as NY AG praises it
Donald Trump's defense attorneys ended where they started, denouncing the former president's civil fraud trial following the conclusion of court today.
"I feel exactly like I did before, three years ago. This case was a joke. We wasted three months," Trump's legal spokesperson Alina Habba told reporters.
Habba, however, acknowledged Trump's unlikely chance of success in the trial while thanking Trump's team of lawyers.
"I think they did an amazing job in a court where we had, frankly, lost before we even got to give any bit of evidence," Habba said, referring in part to Judge Engoron's pretrial partial summary judgment against Trump.
Trump attorney Chris Kise said he is optimistic that Trump will be successful in an eventual appeal.
In a statement, New York Attorney General Letitia James said that the trial "revealed the full extent" of Trump's fraud and that she looks forward to closing arguments.
"While the judge already ruled in our favor and found that Donald Trump engaged in years of significant fraud and unjustly enriched himself and his family, this trial revealed the full extent of that fraud -- and the defendants' inability to disprove it. We look forward to presenting our closing argument on January 11," James said.
State rests its case; closing arguments set for Jan. 11
The evidentiary portion of former President Trump's civil fraud trial concluded with a combative cross-examination of the state's rebuttal expert.
"The People rest," state attorney Kevin Wallace said after testimony had wrapped up.
During the cross-examination of Cornell accounting professor Eric Lewis, defense attorney Jesus Suarez questioning whether he had "any other real world experience" in accounting other than in the classroom or reviewing documents for court cases. Lewis conceded he did not.
Court will adjourn until Jan. 11, when both sides will present closing arguments after submitting written summations.
Defense attorney Christopher Kise also promised to submit a written argument for a directed verdict that will ask Judge Engoron, for a fifth time, to end the case for lack of evidence. Engoron has not promised to even read such a filing, but said that he "probably" would.
After 11 weeks of heated exchanges, Trump attorney Chris Kise ended on a conciliatory note, thanking the court, the court reporters, and others for their work.
Wallace said it may be their first point of agreement.
Judge Engoron wished everyone happy holidays as he ended the day's proceedings.
Rebuttal witness assails Trump's disclosures
State attorney Kevin Wallace concluded his direct examination of the New York attorney general's second and final rebuttal witness amid frequent objections by defense lawyers.
Lewis attempted to explain how Donald Trump's statements of financial condition failed to disclose that he did not conduct a discounted cash flow analysis, contributing to the over-valuation of some of his assets.
"There is no mention of discounting or future value in the disclosure," Lewis said, disagreeing with testimony from defense expert Jason Flemmons -- as well as former Mazars USA accountant Donald Bender, who testified as a state witness.
“Are you impeaching your own witness?” Engoron asked state attorneys regarding whether Bender’s testimony should no longer be considered credible.
"We didn't feel the need to," Wallace responded.
Lewis also suggested that Trump's external accountants at Mazars had less of an obligation to highlight issues that Flemmons suggested, since they were only conducting a compilation report rather than a more intensive audit. While Mazars had an obligation to flag obvious issues, they were not responsible for ensuring Trump's statements were compliant with generally accepted accounting principles, he testified.
"If while doing the compilation ... something comes to the attention of the accounts that could be a GAAP departure, they have a responsibility to bring that issue to the client," Lewis said regarding generally accepted accounting principles.
During the hour-long direct examination, defense lawyers objected at least 14 times, successfully interrupting the line of questions.
"I am lost," Engoron asked at one point. "Can you put this together?"
The parade of objections visibly irritating Wallace, who voiced his displeasure.
"Petulant outbursts don't really play well in the courtroom," quipped Trump lawyer Chris Kise in response.
Defense presses state's expert on his analysis
Defense lawyer Jesus Suarez spent the first hour of his cross-examination working to cast doubt on expert Michiel McCarty's analysis, which found that Trump defrauded lenders out of $168 million in interest.
"Who created the universe of documents for you to review? It was the New York attorney general, right?" Suarez said before launching into a rapid-fire succession of questions regarding which lenders McCarty had spoken to in the course of his analysis.
"Did you ever interview anyone from Deutsche Bank?" Suarez asked.
"No," McCarty said.
"Did you ever interview anyone from Ladder Capital?" Suarez asked.
"No," McCarty repeated.
"Did you ever interview anyone from Mazars," Suarez asked.
"No," McCarty responded.
"Did you ever interview anyone from the Trump Organization?" Suarez asked.
"No," McCarty said again.