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
Weisselberg denies discussing financial statements with Trump
After initially evading the state's question, ex-Trump CFO Allen Weisselberg denied that he ever met with Trump to discuss his financial statements.
"Did you ever meet with Donald Trump or Michael Cohen where there was discussion of the statement of financial condition before it was finalized?" state attorney Louis Solomon asked.
Weisselberg initially responded that he did not recall such a meeting happening, before answering more definitively.
"No. I don't believe it happened," Weisselberg said.
Judge Engoron, appearing skeptical of the answer, asked Weisselberg to confirm.
"Could it have happened, and you just don't remember?" Engoron asked.
"I am saying it did not happen," Weisselberg responded.
The attorney general's opening statement for the case included a portion of the deposition of former Trump attorney Michael Cohen, who claimed that Trump met with him and Weisselberg to direct them to increase his net worth, in order "to be higher on the Forbes list" of billionaires.
"Allen and I were tasked with taking the assets, increasing each of those asset classes in order to accommodate that eight-billion-dollar number [Trump requested]," Cohen said in the deposition.
Weisselberg concedes Trump's triplex is smaller than valuation
Former Trump Organization CFO Allen Weisselberg testified that Trump's triplex apartment in Trump Tower is 10,996 square feet -- which is a third the size that Trump claimed on financial documents.
In October 1994, Trump signed a document that certified his penthouse triplex is 10,996 square feet, but his statements of financial condition for several years beginning in 2012 listed the apartment as 30,000 square feet.
An attorney with the New York attorney general's office showed the page with Trump's signature to Weisselberg, who appeared to struggle to explain the discrepancy.
"It was always in my mind a de minimis asset on the statement of financial condition," Weisselberg said. "I never even thought about the apartment."
Louis Solomon of the attorney general's office confronted Weisselberg with emails from Forbes magazine seeking clarity about the apartment's size, as well as a letter signed by Weisselberg certifying the 30,000 square foot figure to the Trump Organization's then-accountant, Mazars USA.
Weisselberg offered a lengthy take on the discrepancy, prompting Judge Arthur Engoron to intercede.
"Your role is to answer the questions, not to give speeches. Please just answer the questions," Engoron said.
"Forbes was right, the triplex was actually only 10,996, right?" Solomon asked.
"Right," Weisselberg finally conceded.
"I've been through quite a bit the last two years," Weisselberg said at one point during the morning's questioning. The former CFO moved to Florida following three months in jail after he pleaded guilty last year to criminal fraud charges and subsequently testified against the Trump Organization.
Weisselberg to be questioned about valuations
Ex-Trump CFO Allen Weisselberg is expected to face questions this morning about his work valuing properties like Trump's triplex apartment in Trump Tower and Trump's 40 Wall Street building, as well as the Trump Organization's efforts to secure loans from banks and Weisselberg's direct conversations with the former president.
Weisselberg is the second named defendant to testify in the ongoing civil trial.
Trump Organization controller and co-defendant Jeffrey McConney, who concluded his testimony on Friday, was deemed a hostile witness by Judge Arthur Engoron, giving the state more latitude in their questions.
Ex-CFO Weisselberg last year pleaded guilty to tax fraud
Ex-Trump Organization CFO Allen Weisselberg's expected testimony this morning comes six months after he was released from New York City's Rikers Island jail complex after pleading guilty last year to 15 felony charges related to a long-running scheme to avoid $1.7 million in taxes while working for the Trump Organization.
As a condition of his plea deal, Weisselberg testified last year in the Manhattan district attorney's criminal trial of the Trump Organization itself.
"Are you embarrassed about what you did?" Trump Organization attorney Alan Futerfas asked Weisselberg during the criminal trial last November.
"More than you can imagine," replied Weisselberg, who testified that Trump himself was unaware of his tax evasion scheme.
The Trump Organization was convicted and later paid a $1.6 million fine imposed by the judge overseeing the case.
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.