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
Bank's loans to Trump were 'good credit decision,' says exec
Deutsche Bank's $378 million in loans to the Trump Organization was a "good credit decision," the bank's former risk management executive told the court at the end of more than a day of testimony.
"I think we did a reasonably thorough analysis of the information," former Deutsche Bank executive Nicholas Haigh testified under cross-examination by the defense.
An internal Deutsche Bank group evaluated Trump's financial information, personally visited Trump Organization offices to review bank and brokerage records, and conducted some appraisals of property explicitly used as collateral, according to Haigh.
Though the value that Deutsche Bank determined for the properties often differed by hundreds of millions of dollars compared to the Trump-provided value, the entities continued to have what internal bank documents described as a "long and satisfactory relationship."
"Using a Deutsche Bank-adjusted value for the assets, the net worth still exceeded $2.5 billion," Haigh said, referring to Trump's net worth as it related to a loan covenant.
When Trump decided to run for president and won the election, Deutsche Bank was supportive of the business relationship, though management was careful to monitor their particularly high-profile client, according to internal bank documents presented at trial.
"Note that the relationship continues to be monitored at the highest levels of senior management within the firm and any issues arising from the Guarantor's status as President of the United States are immediately addressed, taken to the appropriate Reputation Risk committee, and discussed with appropriate legal counsel," a credit report said.
When asked directly if the decision to work with Trump was a "good credit decision" by defense attorney Clifford Robert, Haigh responded, "I generally agree with that."
During redirect questioning, state attorney Kevin Wallace stopped short of directly asking Haigh if he would have still done business with Trump had he known about the inflated value of Trump's assets. But he asked Haigh whether Trump's financial information could have been incomplete.
"You have no way of knowing if there was information that wasn't provided to you?" Wallace asked.
"That is correct," Haigh said, marking the end of his questioning.
Trump expected to attend trial next week, say sources
Former President Trump is expected to return to New York next week to attend the ongoing civil trial, sources tell ABC News.
The former president, who is not required to be in court for the civil proceeding, appeared in court last week for the first three days of the trial.
He is expected to take the stand later in the trial.
Sources tell ABC News that Trump could attend multiple days next week beginning Tuesday.
Trump's attendance could bring him face-to-face with his former attorney and one-time loyal aide Michael Cohen, who is expected to take the stand in the case.
Ex-Trump CFO could face conflicting interest on the stand
Former Trump Organization CFO Allen Weisselberg is back at the New York Supreme Court courthouse today to possibly continue his direct examination.
If Deutsche Bank risk management executive Nicholas Haigh concludes his testimony this afternoon, Weisselberg will return to the witness stand to face questions from state attorney Louis Solomon.
Weisselberg's testimony began on Monday but was postponed to accommodate a scheduling conflict.
While he acknowledged that some of Trump's assets -- like his Trump Tower penthouse apartment -- were overvalued in the firm's financial documents, Weisselberg responded to dozens of Solomon's questions by saying that he could not recall or remember.
The longtime CFO was released from New York's Rikers Island jail complex in April after serving more than three months for tax fraud, after he pleaded guilty to 15 felony charges related to his compensation while working for Trump.
During his testimony on Monday, Weisselberg acknowledged that he signed a $2 million severance agreement with the Trump Corporation in January. That agreement, which was entered into evidence, limits Weisselberg's ability to cooperate with investigators unless compelled by the court, or to disparage the Trump Organization.
The agreement also set a payment schedule for Weisselberg to receive the severance money across eight $250,0000 payments. According to the schedule, he has only received $750,000 so far, with the remaining payments spread out over the coming year.
Deutsche Bank supported Trump's loans, presidency, say reports
Deutsche Bank's internal credit reports related to Donald Trump's loans offered a positive -- at times glowing -- assessment of his assets, evidence presented in court showed.
"The general conclusion is that the hotel will become the most elite hospitality establishment in Washington, DC, once stabilized," a report said about the Trump International Hotel in Washington, D.C., for which Deutsche Bank financed over $100 in debt.
That same report suggested that the "highest levels" of Deutsche Bank's management supported the bank's relationship with Trump as he began to campaign for president, defense attorney Jesus Suarez told the court.
"Relationship has been reviewed and supported from a Management Board perspective in connection with the Guarantor's candidacy for president of the United States," Deutsche Bank's 2016 credit report said.
Deutsche Bank executive Nicholas Haigh testified that the bank's "own analysis" supported approving Trump's loans, despite that analysis often suggesting that Trump's reported asset valuations were off by hundreds of millions of dollars.
Ex-CFO suggested 30% 'brand premium' for golf course valuations
Ex-Trump CFO Allen Weisselberg explained the Trump Organization's process for valuing its marquee properties as a complicated, months-long process during which the firm's controller, Jeffrey McConney, would reach out to appraisers and brokers to better determine their value.
"This took months to prepare. It was not a simple task," Weisselberg said, adding that he reviewed McConney's final product at a "30,000-foot level."
But Weisselberg acknowledged that he often intervened in the process to push McConney in a certain direction.
In one example, Weisselberg testified that he suggested McConney add a 30% brand premium for seven of Trump's golf courses -- adding tens of millions of dollars in value without disclosing the reasoning.
"Was the 30% premium you directed Mr. McConney to add to the fixed assets disclosed in the statement of financial condition?" Solomon asked.
"No," Weisselberg said.
During a later portion of his direct examination, Weisselberg testified he sent Trump Organization employee Patrick Birney -- who took over handling Trump's financial statements from McConney -- a newspaper clipping about a nearby Palm Beach property in order to support the valuation of Trump's Mar-a-Lago Club.
"Patrick -- hold for next year DJT f/s, Let's see what it ends up selling for," a handwritten note from Weisselberg on the clipping said.
Weisselberg acknowledged his hesitancy to use that property's asking price to help value Mar-a-Lago.
"Anyone can ask anything for a dollar amount. Doesn't mean it's going to sell," Weisselberg said.