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
Defense assails judge after he tells them to speed up questioning
Only 15 minutes into what is expected to be a three-hour cross-examination, Judge Arthur Engoron snapped at defense lawyer Jesus Suarez for asking redundant questions.
"I see why this is going to take two or three hours. Some questions become three or four more questions," Engoron said, interrupting the cross-examination to request that Suarez shorten his questions.
That prompted Trump lawyer Chris Kise to criticize Engoron for placing an unfair standard on the defense team.
"You never give them speeches. You never limit their questions," Kise said about Engoron's approach to the attorney general's legal team. "I think it's unfair."
Kise stressed that the cross-examination of the state's sole expert witness is particularly important since his testimony is likely to play into the judge's calculation of Trump's potential fine.
"This witness is the only witness they have that even hints ... about ill-gotten gains," Kise said.
Engoron, however, refused to back down.
"I stand by my rulings and statements," the judge said.
Expert agrees that high-net-worth borrowers get low rates
Defense attorney Jesus Suarez began what is expected to be a marathon cross examination of the state's expert witness, Michiel McCarty, by attempting to use his words against him.
"Historically banks have been willing to lend to high-net-worth individuals at low rates because they get repaid?" Suarez said, citing McCarty's direct examination.
"That is correct," McCarty said.
Suarez then reminded McCarty that Trump's loans were paid on time -- a point that the former president has reiterated during his appearance in court and on social media.
Suarez then asked if McCarty had charged the attorney general's office $950 per hour for his expert analysis.
"That's my standard rate, yes," said McCarty, who estimated that his total bill for his analysis was $350,000.
Trump's misrepresentations cost banks $168M, expert testifies
The state's expert witness, Michiel McCarty, calculated that Donald Trump's lenders lost $168 million in potential interest between 2014 and 2023, according to a report he presented in court.
McCarty's testimony appeared to reinforce a central tenet of New York Attorney General Letitia James' case: that Trump's misrepresentations in his financial statements cost banks potential earnings from interest, even if the banks made money on the loans.
State attorney Kevin Wallace directed McCarty to a footnote in Judge Engoron's earlier summary judgment order about the concept of lost interest, in which Engoron said, "The subject loans made the banks lots of money; but the fraudulent SFCs [Statements of Financial Condition] cost the banks lots of money. The less collateral for a loan, the riskier it is, and a first principle of loan accounting is that as risk rises, so do interest rates. Thus, accurate SFCs would have allowed the lenders to make even more money than they did."
McCarty, who said he agreed with this assessment, ultimately found that banks lost a total of $168,040,168 in potential interest from loans related to four of Trump's properties in Miami, New York, Chicago, and Washington, D.C.
Trump attorney Chris Kise fiercely objected, arguing that McCarty was testifying about facts not established during the trial. During questioning, state attorneys declined to ask a Deutsche Bank executive if the bank would have still done business with Trump had they known his financial statements were inflated.
"They are not ill-gotten gains if the bank does not testify it would have done it differently," Kise said.
"I decided these were ill-gotten," the Judge Engoron replied.
Following Wallace's direct examination of McCarty, defense attorney Jesus Suarez began his cross-examination.
State's expert witness takes the stand
Listing companies like Marriott, Fannie Mae and AT&T, the New York attorney general's lone expert witness, Michiel McCarty, began his testimony by outlining some of the deals he worked on during his nearly 50-year career.
McCarty said that he has worked as an expert witness on "dozens of cases" and testified at 15 trials. But he acknowledged that he had limited experience with the compilation of statements of financial condition, prompting an objection from Trump's lawyer Chris Kise.
"It appears that he does not have the specific experience relevant to the purpose he is here," Kise argued.
Deemed an expert by Judge Engoron, McCarty went on to explain the report he wrote after reviewing Trump's finances.
'I wasn't involved' preparing financial statements, Trump Jr. says
Before stepping down from the witness stand at the end of the afternoon, Donald Trump Jr. was asked repeatedly about his involvement in the Trump Organization's statements of financial condition -- the allegedly fraudulent documents that underpin the attorney general's case.
Trump Jr., who signed and certified the accuracy of the statements while his father was president between 2016 and 2021, said that he was not involved in preparing the filings.
"I wasn't involved in the compilation of this statement of financial condition," Trump Jr. said, placing the responsibility on his accountants.
"Did you work on the statement of financial condition for June 30, 2017?" state attorney Colleen Faherty asked.
"I did not. The accountants worked on it. That's what we paid them to do," Trump Jr. said.
Throughout the afternoon, the tone of the proceedings alternated rapidly between lighthearted and heated, varying from playful interactions between Trump Jr. and Judge Engoron, to bitter spats between some of the lawyers.
"I know you don't like it when good evidence comes in," Faherty told the defense lawyers during one particularly heated exchange.
"There's no reason to raise your voice," Donald Trump Jr.'s lawyer, Clifford Robert, responded.
Trump Jr. is scheduled to return to the stand tomorrow morning.