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
Defense calling real estate expert to stand
Donald Trump's lawyers are calling real estate expert Robert Unell as a witness this morning.
Unell is one of several defense experts who submitted reports to the court disputing the New York attorney general's findings that Trump committed fraud in the statements of financial condition he provided to lenders.
"The financial information provided to the lenders was correct in all material respects and contrary to the Plaintiff's allegations, therefore the Defendants did not receive any financial benefits on commercial real estate loans based on the submission of any false, inflated, or misleading valuations," Unell wrote in his expert report.
Unell, in the deposition he gave to the defense, also defended Trump's use of a disclaimer -- which Trump has said is sometimes referred to as a "worthless clause" -- that warned lenders that Trump's statements might contain information that does not comply with standard accounting practices.
"I first read it in President Trump's deposition," Unell said regarding Trump's use of the "worthless clause" phrase. "And it kind of stuck. Because, quite honestly, I had never heard it called that, but it is truly what the meaning of it is."
Trump firm 'in compliance' but under 'enhanced monitoring'
Donald Trump agreed to "enhanced monitoring" of the Trump Organization's finances after the company's independent monitor flagged cash transfers of roughly $40 million over the last 10 months.
Former judge Barbara Jones, the independent monitor requested by the New York attorney general in the case, wrote in a letter to Judge Arthur Engoron that she had identified three separate cash transfers of more than $5 million, totaling approximately $40 million. Jones said the transfers included $29 million in tax payments and roughly $10 million for insurance premiums.
"We have discussed with Defendants why these transactions were not previously disclosed, and I have now clarified (and Defendants have agreed) that all transfers of assets out of the Trust exceeding $5 million must be reported," Jones wrote.
Jones also requested information related to an intercompany loan and flagged the delayed disclosure of tax returns for six of Trump's entities, which defendants acknowledged as their mistake.
"Defendants continue to cooperate with me and are generally in compliance with the Court's orders, and have committed to ensure that all required information, including tax information and cash transfers, are promptly disclosed to the Monitor," Jones wrote.
Addressing a report she issued in August about incomplete financial disclosures by the Trump Organization, Jones added that the Trump Organization took additional steps to remedy and disclose the issue.
"By taking these steps I believe Defendants have resolved the issues identified in the August Report, subject to ongoing monitoring," Jones wrote.
Trump VP walks back testimony suggesting conspiracy
Trump Organization VP Patrick Birney, testifying for the defense, walked back testimony from earlier in the trial about receiving instructions to inflate the value of Trump's assets from the company's former CFO.
"Did Allen Weisselberg ever tell you that Mr. Trump wanted his net worth on the statement of financial condition to go up?" state attorney Eric Haren asked Birney during the state's case.
"Yes," Birney responded, describing that he received the instruction in Weisselberg's office between 2017 and 2019.
During an argument for a directed verdict earlier this month, Donald Trump's attorney Chris Kise cited that as some of the only testimony to support the New York attorney general's allegation that members of the Trump Organization conspired to inflate the former president's net worth.
Returning to the witness stand for the defense's case, Birney suggested that any changes to Trump's financial statement were based on material changes to assets.
"Were you ever directed to increase a number without there being an underlying basis to increase that valuation?" defense attorney Jennifer Hernandez asked.
"No," Birney said.
Judge Arthur Engoron adjourned court for the day after Birney completed his testimony.
"OK, class dismissed," Engoron quipped.
Deutsche Bank expected Trump to value assets fairly, banker says
Former Deutsche Bank managing director Rosemary Vrablic testified on cross-examination by state attorneys that Donald Trump, Ivanka Trump, and Donald Trump Jr. secured private financing using recourse -- meaning they were personally liable for the loan.
"Sorry about the recourse issue -- a dirty word, I know -- but it is a requirement in private banking," Vrablic wrote in a 2011 introductory email to Donald Trump Jr.
Vrablic confirmed that each of the Trumps she worked with -- Donald, Ivanka, and Donald Trump Jr. -- used a personal guaranty to secure better financing terms.
"It gives the flexibility to be creative on some solutions because the person is standing behind it," Vrablic testified.
State attorney Kevin Wallace appeared to focus on the personal guaranty during the cross-examination, with the discussion bringing the focus back on the representation of the value of Trump's assets.
While Vrablic confirmed that she never personally reviewed Donald Trump's statement of financial condition, she said the bank still expected it was accurate.
"You would have had an expectation that a borrower like Mr. Trump would present their financial information fairly?" Wallace asked.
"Yes," Vrablic replied.
Michael Cohen to return to witness stand
Former Trump attorney Michael Cohen is set to face a grueling day of cross examination, as defense lawyers attempt to discredit him after his potentially damaging testimony yesterday.
Calm and confident when answering questions from a state lawyer, Cohen dealt a blow to his former boss early in his testimony yesterday when he said he "reverse engineered" Trump's financial statements to "achieve the number" Trump wanted, inflating the values of assets such as Trump Park Avenue, Trump World Tower, and the Miss Universe Pageant to achieve Trump's desired figure -- though his testimony was notably devoid of notes, communications, or draft financials to support his claims.
Trump's lawyer Alina Habba hammered at Cohen's inconsistencies during the first hour of cross-examination, confronting Cohen with his past guilty pleas and history of false testimony. A disbarred lawyer, Cohen's answers grew combative at times, often responding to questions with "objection" or "asked and answered."
Trump said in a Truth Social post this morning that he plans to attend court for a second day in a row. In a social media post overnight, he described Cohen's testimony yesterday as a "complete and total disaster."
New York Attorney General Letitia James offered a contrasting opinion of Cohen's testimony in a video statement posted to social media.
"Donald Trump lives in a fantasy land. He directed those around him to lie and scheme to make his fantasy a reality," James said.