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
'We can all read,' judge chides defense attorney
Defense attorney Jesus Suarez spent the first hour of court walking former Deutsche Bank executive Nicholas Haigh through a year-by-year review of the bank's credit reports about Trump's loans.
Under questioning, Haigh has acknowledged that Deutsche Bank's analysis supported approving Trump's loans.
At the same time, Suarez' approach is testing Judge Arthur Engoron's patience.
"We can all read, so I don't know why we are spending so much time on this," Engoron said at one point, describing the testimony as "redundant" and "obvious."
Engoron also criticized Suarez for appearing to highlight the fact that Trump never defaulted on the loans themselves -- an issue that is uncontested by both sides in the case.
New York AG not in attendance for 2nd day
As the trial's eighth eighth day gets underway, New York Attorney General Letitia James is absent from court for a second day.
While James attended the first six days of the trial, she did not appear at the proceedings yesterday.
Roughly a dozen lawyers and staff from the New York attorney general's office have been attending the trial each day.
Defense to scrutinize Deutsche Bank's due diligence
Trump attorney Jesus Suarez will continue his cross examination of former Deutsche Bank risk management executive Nicholas Haigh when Trump's civil trial resumes this morning.
Deutsche Bank was the Trump Organization's largest single lender between 2011 and 2022, loaning the former president upwards of $300 million through the bank's private wealth management division.
Describing himself as an "ultimate decider" of the loans' riskiness, Haigh testified Wednesday that his decision-making process relied on Trump's financial statements -- documents that the New York attorney general alleges were fraudulent.
"I assumed that the representations of the assets and liabilities were broadly accurate," Haigh said yesterday.
Earlier witnesses have testified about how Trump's financial documents were drafted, finalized, and sent to banks -- but Haigh is the first witness to testify from the perspective of the banks, which the attorney general says were allegedly deceived by Trump's inflated financial statements.
Suarez, during his first hour cross examining Haigh on Wednesday, said Deutsche Bank was a sophisticated company that profited from the loans.
Haigh also acknowledged that the bank failed to conduct its own independent appraisals of Trump's top properties, and did not rigorously examine his financial information.
Trump's business drew little scrutiny from bank, defense says
Deutsche Bank was a serious company in business with Donald Trump to make money, defense attorney Jesus Suarez said during his cross examination of former Deutsche Bank executive Nicholas Haigh.
At the height of its relationship with the Trump Organization the company loaned Trump over $378 million, and failed to commission independent appraisals of Trump's properties, Haigh acknowledged. While the bank listed lower estimates for the value of Trump's assets year after year, it continued to do business with Trump and his company.
"We ... the bank hadn't done all the due diligence one would do in the sense of the opinion of value you see in an appraisal," Haigh said, at one point agreeing with the defense's characterization that the bank's internal value services group conducted "sanity checks'' on the numbers.
The direct examination of Haigh by state attorney Kevin Wallace also left a central question about Deutsche Bank's activity unanswered.
In a letter to the court and in previous arguments, lawyers for the attorney general suggested that Haigh might have turned away Trump's business if he had known that Trump's assets were inflated in value.
"As this Court noted during summary judgment arguments, Mr. Haigh testified during OAG's investigation that he may not have authorized lending to the borrower if he had at that time been aware of the inflated asset values contained in Mr. Trump's SFCs [statements of financial condition]," a lawyer for the attorney general wrote to the court in a letter last week.
Wallace never directly posed the hypothetical to Haigh during his direct examination, leaving the question unresolved.
Court subsequently adjourned for the day, with Suarez telling the court he plans to continue his cross examination of Haigh through Thursday afternoon.
Judge fines Trump $354 million
Former President Donald Trump must pay $354 million for fraudulent business practices, Judge Arthur Engoron has ruled.
Trump's sons Donald Trump Jr. and Eric Trump have been fined $4 million apiece, and former Trump Organization CFO Allen Weisselberg has been fined $1 million.
The decision bars Trump barred from serving as an officer of a New York company for three years, and bars his sons for two years apiece.
Regarding the dissolution of Trump's companies, the decision says, "This Court hereby modifies its September 26, 2023, Decision and Order solely to the extent of removing the language ordering the LLCs cancellation en masse. The restructuring and potential dissolution of any LLCs shall be subject to individual review by the Court appointed Independent Director of Compliance in consultation with Judge Jones."
In his decision, Engoron wrote that "Defendants' refusal to admit error -- indeed, to continue it, according to the Independent Monitor -- constrains this Court to conclude that they will engage in it going forward unless judicially restrained."
"Overall, Donald Trump rarely responded to the questions asked, and he frequently interjected long, irrelevant speeches on issues far beyond the scope of the trial," the judge wrote. "His refusal to answer the questions directly, or in some cases, at all, severely compromised his credibility."
"The accountants created these 'compilations' based on data submitted by the Trump entities," the decision said. "In order to borrow more and at lower rates, defendants submitted blatantly false financial data to the accountants, resulting in fraudulent financial statements. When confronted at trial with the statements, defendants' fact and expert witnesses simply denied reality, and defendants failed to accept responsibility or to impose internal controls to prevent future recurrences."
Of Donald Trump Jr., Engoron wrote, "Despite disclaiming responsibility for or knowledge of the Statements of Financial Conditions' contents, Trump, Jr. still insisted that the Statements of Financial Condition were 'materially accurate.'"
Engoron's decision follows an 11-week civil trial in New York, where Trump and three of his adult children testified.
New York Attorney General Letitia James sued Trump, his two adult sons, and Trump Organization executives in September 2022 for issuing fraudulent financial statements -- including over 200 false and misleading asset values between 2011 and 2021 -- to get better loan terms and business deals.