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.


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


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Trump wants trial paused while he appeals judge's ruling

As expected, Trump's lawyers have filed an application for an immediate pause of the ongoing trial, pending their appeal of Judge Engoron's ruling granting partial summary judgment in the case last week.

Engoron, in last week's ruling, ordered the cancellation of Trump's business licenses in New York after finding that he had committed fraud in his business dealings.

In their application for a stay, Trump's lawyers argue that Engoron's order was "unprecedented," incorrectly decided, and unfairly punitive.

Warning that the consequences of Engoron's order would do "severe and irreparable harm" to not only defendant but also "innocent nonparties and employees who depend on the affected entities for their livelihoods," the lawyers asked for an immediate pause of the trial.

"It is respectfully submitted that an immediate stay of enforcement of Supreme Court's decision and order is necessary to prevent irreparable harm pending resolution of Appellants' application to correct a grave miscarriage of justice," the application says.


Trump withdraws lawsuit against judge

A week after an appeals court denied Trump's request to halt the ongoing trial, the former president is withdrawing a suit he filed against Judge Arthur Engoron and New York Attorney General Letitia James.

Trump originally undertook the legal move to force the judge to either issue a ruling limiting the case against him or delay the trial.

The suit was discontinued without prejudice, according to a filing.

However, Trump's legal team has told the court that it plans to file a new request for a stay of the trial, pending appeal, sometime today.


Trump Organization controller to resume testimony

Former Trump Organization controller Jeffrey McConney, a defendant in the case, is scheduled to return to the witness stand this morning for a half-day session of court.

State attorneys are expected to continue to probe the Trump Organization's internal procedures that resulted in the inflated values on Trump's financial statements, including how the former president's own Trump Tower penthouse grew in listed value from $80 million in 2011 to $327 million in 2016.

Judge Arthur Engoron already ruled last week that Trump overvalued the apartment by over $200 million based on the "false and misleading" claim that the residence was 30,000 square feet, rather than its actual size of 10,996 square feet.

When McConney asked Kathy Kaye, a Trump International Realty executive, for assistance valuing the residence in 2013, Kaye cited the penthouse's ties to "celebrity" and its uniqueness as partial reasons to add $20 million to the apartment's listed value, according to an email that was entered into evidence.

"I don't see how one would list below 8K per sq foot at this point, which brings us to 240,000M ... 200,000M is a safe estimate," Kaye wrote in the email.

McConney also appeared to struggled to explain why he used asking prices, rather than the accepted practice of using sale prices, when valuing the penthouse.

The exchange prompted New York AG special counsel Andrew Amer to confront McConney with his testimony during a previous investigative interview, in which McConney said asking prices were a poor measure of value since "you can ask anything you want to."


Trump Organization controller grilled about assets

Testifying about his responsibilities as the Trump Organization's longtime controller, co-defendant Jeffrey McConney was grilled on the stand by special counsel Andrew Amer of the New York attorney general's office.

Amer pressed McConney about alleged issues with Trump's financial documents.

Asked about why he listed assets from Vornado Trust -- which Trump did not control -- as being under Trump's control, McConney suggested it came down to accounting convenience.

"We couldn't keep adding columns for every bank or brokerage account," McConney said, later adding that the money was held in a Capital One account like the other assets, even if Trump could not access that account.

McConney testified that the individuals who accessed the spreadsheet would understand who controlled that money.

"People can make assumptions in any way they want to. The users looking at this spreadsheet would know it's not one bank account," McConney said.

McConney appeared to struggle to answer questions about the value of Trump's triplex apartment in Trump Tower, which, according to the Trump Organization, ballooned in value from $80 million in 2011 to $327 million in 2016.

The controller testified that he relied on data from the StreetEasy website, adopted cost-per-square-foot estimates from newer properties, and took other Trump Organization executives' claims about the apartment at face value.

McConney is scheduled to continue his testimony tomorrow as the day's only witness.


Deutsche Bank courted Trump for more business, referrals

Deutsche Bank executives courted Donald Trump to attract more business and referrals, viewing the former president as an opportunity to sell services to his family members and other high-net-worth individuals, according to the testimony of former Deutsche Bank managing director Rosemary Vrablic.

"Given the circles this family travels in, we expect to be introduced to the wealthiest people on the planet," Vrablic wrote to colleagues while courting Trump in the early 2010s, according to materials entered into evidence.

Recruiting Trump stemmed from a 2007 effort in the bank to develop a broader commercial real estate financing division for their high-net-worth individuals.

"He would have fit the category of the entrepreneur and investor with a successful track record," Vrablic testified on the stand regarding Trump's profile.

After being introduced to Donald Trump Jr. through Ivanka Trump's now-husband Jared Kushner, Vrablic began pursuing Donald Trump's business.

"We are whale hunting ... Haven't seen him yet. Also maybe Dad will convert like Ivanka did," Vrablic wrote in a 2011 email to a colleague.

"It is a term used when there is a very high-net-worth individual who is a prospect," Vrablic said in explaining why she referred to Trump as a "whale."

Once Trump was on board, leadership from the bank personally courted Trump to do more business with the bank and to connect them to other potential clients. The former CEO of the bank personally met with Trump with the express goal of gaining more deposits from Trump and leveraging Trump's relationships.

CEO Anshu Jain "thought that if Mr. Trump wanted to, there could be additional leverage provided among his world," Vrablic testified.

The effort appeared to work, as the bank made over $3 million in revenue from Trump in 2013, up from only $13,000 in 2011.