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
New York AG not attending trial today
New York Attorney General Letitia James is absent from the courtroom this morning.
James attended the first six days of the trial, which started last Monday.
Former President Trump and Trump Organization VP Eric Trump both attended the first three days of the trial.
Trump used private banking to secure $300M in loans, per AG
While the Trump Organization's relationship with Deutsche Bank goes back 30 years, the attorney general alleges in her complaint that in 2011, Trump began doing business with the private wealth managers at the bank, rather than bankers who specialized in commercial real estate.
"In essence, rather than obtain credit facilities through the wing of Deutsche Bank with an expertise in commercial real estate, Mr. Trump began to seek funds from a wing of Deutsche Bank focused on servicing ultrawealthy clients," the attorney general's complaint said. "Hence, Mr. Trump's personal guaranty, and his representations regarding his finances that backed up that guaranty, featured prominently in Mr. Trump's loan transactions through the [private wealth management] wing of Deutsche Bank."
During the attorney general's investigation, Deutsche Bank credit risk executive Nicholas Haigh told investigators that he "may not have authorized" Trump's loans if he was aware of the inflated values in Trump's financial statements, according to a letter the state submitted to the court.
Deutsche Bank executive set to take stand
Donald Trump's civil fraud trial is set to resume this morning with the testimony of Nicholas Haigh, a credit risk executive who worked at Deutsche Bank when it issued loans to the former president.
Deutsche Bank was the largest single lender to the Trump Organization between 2011 and 2022, according to the New York attorney general.
Owing approximately $340 million to the bank at one point, the Trump Organization used Deutsche Bank to secure favorable loans related to its purchase of the Old Post Office Hotel in Washington, D.C., the Trump International Hotel and Tower in Chicago, Illinois, and Trump National Doral golf club in Florida, according to the AG's complaint.
Ex-CFO can't say who OK'd statements after Trump became president
Ex-CFO Allen Weisselberg, who testified earlier Tuesday that Trump approved his financial statements before they were finalized during the years between 2011 and 2016, was unable to recall who approved financial statements after Trump was elected president in 2016.
While he recalled discussing some elements of the statements with Trump Organization VP Eric Trump, he declined to say that either Eric or VP Don Jr. had final say regarding the statements.
Court then adjourned for the day.
Court is set to resume Wednesday morning with the testimony of Deutsche Bank risk manager Nicholas Haigh, who is testifying early due to a scheduling conflict.
Weisselberg is scheduled to return to the witness stand later Wednesday.
Estate's valuation included 7 mansions that weren't yet built
When the Trump Organization valued its Seven Springs compound in New York's Westchester County at $261 million, the company included seven mansions, estimated to be worth $23 million each, that had not been built, longtime Trump Organization controller Jeff McConney testified.
In contrast, an appraiser had said Seven Springs was worth $56 million, excluding development rights for the property, which hadn't been awarded.
McConney testified that he did not factor into the valuation when, or whether, the homes would be built.
"You have treated, for the purposes of this valuation, a profit of $23 million per home as if it were realized immediately?" asked Andrew Amer with the New York attorney general's office.
"Correct," McConney said.
Amer said that Trump Organization VP Eric Trump, in a call with McConney the following year, instructed McConney to continue to value the seven mansions the same as he did in 2013.
McConney is testifying as a hostile witness since he is also a named defendant in the case. It gives Amer wider latitude in his examination, though defense attorneys have made several objections about leading questions.
The proceedings were briefly interrupted by the blaring of a horn that was audible in the courtroom, prompting Amer to interrupt his questioning and remark, "Someone is having a celebration."
Judge Engoron, who has displayed a dry wit throughout the trial, responded, "Maybe they're celebrating us."