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.
Top headlines:
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
Michael Cohen delays testimony as trial enters Week 3
The civil fraud trial of former President Trump, his adult sons, and Trump Organization executives enters its third week with a notable schedule change.
Trump's former lawyer and so-called "fixer" Michael Cohen, who was initially scheduled to begin his testimony on Tuesday, has delayed his court appearance due to a preexisting medical condition.
"I look forward to testifying and correcting the record as to the multiple misstatements and responses by previous witnesses who stated … 'I don't recall.' Unfortunately for them, I do," Cohen told ABC News on Saturday.
Trump is expected to attend multiple days of the trial beginning on Tuesday, according to sources familiar with his plans.
In the meantime, Trump Organization executive Patrick Birney is expected to conclude his testimony this morning.
Birney is scheduled to be followed on the stand by Mark Hawthorn, the chief accounting officer at Trump Hotels.
Ex-CFO wanted inflated value for Trump Tower, exec says
Trump Organization executive Patrick Birney was once pressured by his former CFO, Allen Weisselberg, to use an unrealistic metric to inflate the value of Trump Tower, Birney testified.
Birney testified that he consulted a generic real estate report to determine a 2.67% capitalization rate to measure the value of Trump Tower -- despite an executive at real estate company Cushman and Wakefield recommending a higher rate, which would have decreased Trump Tower's value.
When Weisselberg and Birney discussed the topic in a Trump Tower restroom, Birney said he encouraged the CFO to use a higher, more realistic capitalization rate that would be more sustainable, in order to maintain the building's value in the future, Birney testified.
"I think he said, just use 2.67%," Birney recalled. "I said I am fine using that capitalization rate, but I am worried that if we are only using 2.67, the building is so old, next year there might not be a cap rate as low as 2.67."
The New York attorney general alleges that Weisselberg "systematically rejected" multiple valuations of Trump Tower in 2019 that would have lowered its value between $161 and $224 million.
Court has adjourned for the day, with Birney scheduled to continue his testimony on Monday morning.
Firm mulled using presidential 'premium' to boost net worth
Trump Organization executives considered adding $144 million to Trump's net worth based on a "premium for presidential property" in 2017, according to testimony of executive Patrick Birney.
The premium, which was applied to draft versions of Trump's financial statements, varied between 15% and 35% for Trump's properties, including his Mar-a-Lago Club, which was described in documents as the "presidential winter residence," according to materials entered into evidence.
The potential adjustment followed a $200 million shortfall between Trump's 2016 and 2017 statements, after a Forbes magazine article prompted executives to revalue the former president's penthouse, state attorneys said.
"Who directed you?" state attorney Eric Haren asked Birney about adding the premium.
"I don't really remember, but probably Allen Weisselberg," Birney said.
Birney testified that the premium was eventually removed from the 2017 statement, according to a document that tracked changes made to the statement. He did not provide additional context about why the premium was removed.
Trump Organization exec to continue testimony
Trump Organization executive Patrick Birney will continue his testimony this morning on Day Nine of the trial.
Roughly 40 years younger than ex-Trump Organization CFO Allen Weisselberg -- his former boss and the previous witness in the trial -- Birney testified yesterday that he largely relied on Weisselberg and controller Jeffrey McConney to put together Trump's annual financial statements.
"I was not the final decision maker," said Birney, who was an assistant VP during that time period.
State attorney Kevin Wallace highlighted Birney's statements during his opening statement as evidence of an alleged conspiracy within the Trump Organization to inflate Trump's net worth.
"He likes to see it go up," Birney said, according to Wallace.
If Birney completes his testimony today, Trump Hotels chief accounting officer Mark Hawthorn is scheduled to testify next.
'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.