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 begins cross-examination of Cohen
Following the conclusion of the state's direct examination of Michael Cohen, Trump attorney Alina Habba has begun what is expected to be a lengthy cross-examination.
“You understand what 'under oath' means?” Habba asked Cohen at the start of her cross-examination.
“Yes,” Cohen said, after which Habba began to describe Cohen’s previous criminal conduct.
Trump claimed $8B net worth when bidding for Buffalo Bills
When Donald Trump attempted to bid for the Buffalo Bills football team in 2014, he claimed that his net worth was "in excess of eight billion dollars," according to a document entered evidence during Michael Cohen's testimony.
To support the bid, Trump's frequent lender Deutsche Bank sent a letter to Morgan Stanley to demonstrate that Trump had the "financial wherewithal" to support his bid, according to Cohen.
The New York attorney general alleges that Trump used his inflated financial statement to convince Deutsche Bank to support Trump's financial strength.
The line of questioning prompted strong objections from Trump lawyer Chris Kise, who argued that the bid for the Buffalo Bills is not related to any of the attorney general's causes of action.
"I think this is arguably false, particularly the eight billion dollars ... and this shows a pattern of practice of fraud," Judge Engoron said when overruling the objection.
Cohen testifies how Trump's inflated statements were used
Donald Trump used his inflated financial statements to convince journalists about his net worth, to lower his insurance premiums, and even to support his bid to purchase the Buffalo Bills football team, according to Michael Cohen.
Cohen described how the Trump Organization would grant external parties only limited access to the documents themselves, often presenting them during video calls -- rather than handing out the document for external parties to keep -- in the process of demonstrating Trump's net worth.
For example, Cohen described using the documents in a meeting with a journalist from real estate news site "The Real Deal" to "create the story about how much Trump was actually worth," Cohen said.
According to Cohen, Trump Organization executives used Trump's financial statements in meetings with insurance companies to obtain lower premiums, and Trump would occasionally attend these meetings to help move the process along.
"About three quarters of the way through the meeting, Mr. Trump would then come in, and there would be an extended conversion about his net worth, and that he was richer than the insurance companies," Cohen testified, adding that Trump's drop-in to the meeting was pre-planned.
Trump's financial statement also proved vital when Trump attempted to get a line of credit for a 2014 bid to purchase the Buffalo Bills, according to Cohen.
"We can all agree that Mr. Trump never owned the Buffalo Bills," Judge Engoron remarked.
Trump following Cohen's testimony closely
Sitting at the witness stand in a white dress shirt and sport coat, Cohen swapped his reading glasses on and off as he studied financial statements presented to him.
Feet away at the counsel table, Trump leaned forward to study the real-time transcript of Cohen's testimony while actively whispering and passing notes between his lawyers Alina Habba and Chris Kise.
Often leaning to speak with his lawyers on either side of him, Trump appeared actively engaged throughout Cohen's testimony since the mid-day break.
While Cohen testified steadily and confidently for most of his early-afternoon testimony, he at times spoke vaguely and struggled to offer specific firsthand knowledge. When asked about Trump's adult children, Ivanka, Don Jr. and Eric, he initially described them as involved in the process of inflating specific assets before walking back his testimony.
"I did not observe them specifically engaging in conversation," about that, Cohen acknowledged.
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.