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
Deutsche Bank supported Trump's loans, presidency, say reports
Deutsche Bank's internal credit reports related to Donald Trump's loans offered a positive -- at times glowing -- assessment of his assets, evidence presented in court showed.
"The general conclusion is that the hotel will become the most elite hospitality establishment in Washington, DC, once stabilized," a report said about the Trump International Hotel in Washington, D.C., for which Deutsche Bank financed over $100 in debt.
That same report suggested that the "highest levels" of Deutsche Bank's management supported the bank's relationship with Trump as he began to campaign for president, defense attorney Jesus Suarez told the court.
"Relationship has been reviewed and supported from a Management Board perspective in connection with the Guarantor's candidacy for president of the United States," Deutsche Bank's 2016 credit report said.
Deutsche Bank executive Nicholas Haigh testified that the bank's "own analysis" supported approving Trump's loans, despite that analysis often suggesting that Trump's reported asset valuations were off by hundreds of millions of dollars.
'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.
McConney says overvaluation of Trump’s penthouse was incorrect
Former Trump Organization controller Jeff McConney, testifying for the defense, said that he overvalued Donald Trump's penthouse apartment by over $100 million because he relied on an incorrect email.
Judge Arthur Engoron determined in his partial summary judgment that the penthouse was overvalued by as much as $200 million because it was falsely listed as being three times larger than its actual size.
To get to that value, McConney said relied on a Trump Organization broker who falsely represented the apartment was 30,000 square feet.
"I would rely on him. I figured he knew the property a lot better than I did," said McConney, who added that he never spent considerable time in the apartment.
The Trump Organization lowered the value of the penthouse by more than $200 million in 2017 after a Forbes magazine article exposed the error.
McConney's testimony came before he broke down on the stand at the end of his direct examination.