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
Trump attorney jokes about football coach
In a moment of levity during a break between witnesses, Judge Arthur Engoron noted that Trump attorney Chris Kise has not yet led the questioning of any witnesses.
"How come you don't get the pleasure of questioning people?" Engoron asked.
"There's still time left," Kise responded, saying that he prefers to coach his team from the sideline like famed New England Patriots coach Bill Belichick or Jimbo Fisher.
Fisher received a record buyout after being fired as coach of Texas A&M this week.
"I'd like to be fired from my job and collecting $77 million," Kise quipped.
"I'll see if I can arrange that," Engoron joked.
GSA flagged issues with Trump's financial statements
Steven Collins, an expert in contract procurement, testified that the federal government's General Services Administration -- which reviewed Donald Trump's proposal to renovate the Old Post Office in Washington, D.C. -- identified issues in Donald Trump's statement of financial condition.
"Financial statements provided by Mr. Trump was qualified by his accountants as not complying with GAAP" or generally accepted accounting principles, a GSA document entered into evidence said about a "notable weakness" of Trump's proposal.
However, said Collins, Trump's financial capability as reflected in the statements comprised no more than 15% of the evaluation factors considered by the GSA, which more heavily weighed Trump's site plan and financial offer in ultimately deciding to award Trump the contract.
Collins testified for roughly an hour for the defense and faced no questions during cross-examination.
Lawyer suggests Trump trying to throw 'accountants under the bus'
State attorney Kevin Wallace, in his redirect examination of the defense's expert witness Jason Flemmons, asked the accounting expert a single question.
"When you were at the Securities and Exchange Commission, did you ever encounter issuers facing allegations of fraud [try] to throw their accountants under the bus?" Wallace asked, in an apparent jab at the defense's contention that the responsibility for Donald Trump's financial statements lies with his accountants.
Trump's lawyers quickly objected to the question. Judge Engoron, visibly smirking, sustained the objection.
Earlier, when asked by Judge Engoron about his compensation for serving as an expert witness, Flemmons said he was unable to estimate the total amount but that his hourly rate was $925 per hour. Michiel McCarty, who testified as an expert witness for the state, testified earlier this month that he charged a similar rate.
Valuing properties 'not an exact science,' says expert
The defense's accounting expert, Jason Flemmons, testified that the process of determining the estimated value of a property could result in a range of values "no one of which is the right or wrong answer."
The assertion from Flemmons supports the defense's long-standing argument that performing valuations such as the ones listed on Donald Trump's statements of financial condition is more akin to an art than a science.
"Estimated current value is not an exact science. There is not one single correct value that comes of this exercise," Flemmons said.
Flemmons testified that insofar as Trump used an approved method to determine value, and disclosed that method, the value would be appropriate.
"You are communicating that to the user and allowing that user to be in a position to agree or disagree," Flemmons said.
State attorney Kevin Wallace has concluded his cross-examination of Flemmons, allowing defense lawyer Jesus Suarez to begin his redirect examination of the accounting expert.
Insurance underwriter to testify
An underwriter who worked on a Trump Organization insurance policy to cover legal expenses incurred by the firm's executives is scheduled to testify this morning.
Michael Holl, an underwriter at Tokio Marine HCC, worked on the Trump Organization's Directors and Officers insurance policy in 2016 and 2017, according to the New York attorney general.
With Donald Trump about to be inaugurated president at the time, the Trump Organization attempted to increase their policy's limit to $50,000,000, which was ten times higher than their previous limit, according to the attorney general.
"In response to specific questioning from the underwriters, the Trump Organization personnel represented that there was no material litigation or inquiry from anyone that could potentially lead to a claim under the D&O coverage," the state alleged in their complaint.
However, four months before that representation was made, Trump Organization executives learned about an ongoing investigation by the attorney general into the Trump Foundation as well as Trump family members, according to the complaint.