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 plans to call Trump Organization's independent monitor
Donald Trump's lawyers plan to call former federal Judge Barbara Jones -- who has served as the Trump Organization's independent monitor since 2022 -- as a witness for the defense case, according to defense attorney Clifford Robert.
Jones was installed as the firm's independent monitor last November at the request of New York Attorney General Letitia James.
Though Jones was not originally included in the defense's witness list, Robert flagged the change to the court near the end of the direct examination of Trump Hotels chief operating officer Mark Hawthorn.
Hawthorn testified that he has regularly met with Jones since her appointment, and that the two have a transparent and cooperative relationship.
"We believe everything they deemed as an objection we have responded to diligently and very accurately," Hawthorn said. "No one from that team has ever communicated to us that they have uncovered fraud or any irregularities."
Jones, however, wrote in an August 2023 report that the Trump Organization provided "incomplete" information and did not consistently provide necessary certifications to lenders, prompting Judge Engoron to chastise the defendants in his summary judgment order.
"Even with a preliminary injunction in place, and with an independent monitor overseeing their compliance, defendants have continued to disseminate false and misleading information while conducting business," Engoron wrote.
Robert did not provide a timeline for when Jones might testify, and state attorney Andrew Amer reserved a right to object to the defense team calling Jones as a witness.
Threats against clerk are 'just part of the game,' said Trump lawyer
In their filing this morning arguing against the trial's limited gag order, Trump attorneys Clifford Robert, Chris Kise, and Alina Habba downplayed Trump's connection to the threats against Judge Engoron and his clerk, and argued that they do not justify the gag order's limit on Trump's constitutional right to free speech.
The arguments appeared to be foreshadowed by remarks made to reporters earlier this month by Habba, who has been a forceful voice for the former president both in and out of court.
"The president has never threatened her safety," Habba said of Engoron's clerk. "This is a high profile case, and unfortunately, this is what comes with it. There is not a day that I don't get a threat. It's just part of the game."
"If she had a real threat, she should get off the bench and stop having her photograph taken, but she hasn't done that," Habba added.
Trump's lawyers disavow threats against judge, clerk
Donald Trump's lawyers, in a court filing this morning, doubled down on their criticism of the trial's limited gag order while distancing Trump and his co-defendants from what they called the "vile and reprehensible" threats against Judge Arthur Engoron and his principal law clerk.
In a filing arguing against the limited gag order, defense lawyer Clifford Robert said that the attacks -- which he said Trump neither condoned nor directed -- do not justify the gag order's unconstitutional restraint on Trump's free speech.
"Respondents' sole cognizable justification for the Gag Orders is that an unknown third party may react in a hostile or offensive manner to Petitioners' speech," Robert wrote.
While Robert characterized the threats as "disturbing, derogatory, and indefensible," he argued that it could not be proven that Trump's Truth Social post on Oct. 3 -- which prompted the limited gag order prohibiting statements about the judge's staff -- led to an increase in threats. Trump and his lawyers have never called for violence, condoned the attacks, or encouraged threatening behavior, Robert said.
The threatening behavior "merits appropriate security measures," Robert wrote. "However, it does not justify the wholesale abrogation of Petitioners' First Amendment rights in a proceeding of immense stakes to Petitioners," which Robert argued has been "compromised by the introduction of partisan bias on the bench."
Eric Trump asked hotel exec to revamp firm's outdated bookkeeping
Eric Trump needed help with the Trump Organization's finances after the company's chief financial officer Allen Weisselberg was removed from his role following his indictment in 2021, according to Trump Hotels executive Mark Hawthorn.
According to Hawthorn's testimony, the company relied on an outdated and inefficient approach to bookkeeping, including authorizing only three individuals -- Weisselberg, Donald Trump Jr. and Eric Trump -- to write checks for the Trump Organization until as late as 2021.
Weisselberg signed most of the company's disbursements, leaving Eric and Don Jr. in uncharted waters once Weisselberg was removed, Hawthorn said.
"He had a stack of checks [on his desk] to sign that was very high," Hawthorn recalled regarding a summer 2021 meeting during which he said Eric Trump requested Hawthorn's help applying his experience running Trump's hotel division.
"Mark, how do you do this in the hotel division?" Eric asked, according to Hawthorn.
"We don't do it like this," Hawthorn said he replied.
The meeting, according to Hawthorn, prompted him to begin an effort to revise the Trump's Organization's bookkeeping policies to replicate his work in Trump's hotel division, which he ran as its chief operating officer. Following Eric Trump's request, he imposed a standardized paperless approach to bookkeeping, so entities could be compared on an "apples to apples basis," Hawthorn testified.
Judge appears dubious of defense's latest argument
Court was adjourned for the day following an afternoon in which Judge Engoron appeared to shoot down one of the defense's main remaining arguments following defense attorneys' request for a directed verdict.
Defense lawyer Chris Kise argued that the state failed to prove that Trump's lenders would have acted differently had they known about the fraud alleged by the New York attorney general -- but Engoron said "the mere fact that the lenders were happy doesn't mean the statute wasn't violated."
Earlier this month, during testimony from the defense's first expert witness Steven Witkoff, Trump's lawyers attempted to argue that Trump had undervalued some of his properties, which balanced out the alleged inflated properties in his statement of financial condition. Engoron, however, declined to allow testimony related to that argument, saying, "The reader of the financial statement has the right to know whether each particular number was accurate."
That same day, Trump's lawyers also presented testimony from expert witness Jason Flemmons that Trump disclosed that the values of nearly 95% of the assets in his financial statements departed from generally accepted accounting practices.
"It's effectively saying, 'User beware,'" Flemmons said.
But Engoron said Flemmons only addressed the methods used in the statements, rather than the numbers themselves, which could have been incorrect.
Defense attorneys are scheduled to call additional witnesses over the next week before Eric Trump and Donald Trump return to the stand as the defense wraps up its case in the next two weeks.