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
Judge to allow testimony from Mar-a-Lago experts
Judge Engoron denied two motions by the New York attorney general that would have precluded testimony from two experts on the value of Donald Trump's Mar-a-Lago property.
In his pretrial ruling, Engoron decided that Trump inflated the value of the oceanfront property by 2,300% by listing its value at least $426 million, despite a tax appraiser determining its value at $27.6 million.
Trump and his lawyers have repeatedly criticized Engoron's finding, arguing that he misunderstood the purpose of a tax appraisal, and they planned to call two experts to support Trump's value of the property: John Shubin to testify about the deed that the state says limits the estate's value because it restricts the use of the property to a club, and Lawrence Moens, one of the top real estate brokers in Palm Beach.
State attorney Kevin Wallace argued that Shubin would offer impermissible legal opinions, and Moens could not offer a traceable process for evaluating the property.
"He is extremely different than a doctor [explaining] how he might conduct a surgery. He is providing evaluation advice," Wallace said about Moens' testimony.
Engoron denied the state's motions, allowing them both to testify -- but said he would enforce objections if they overstep their areas of expertise.
Bank and judge agreed on Trump's net worth, expert points out
Defense expert Robert Unell testified that both Judge Engoron and Deutsche Bank reached similar conclusions about Donald Trump's actual net worth -- but that Deutsche Bank officials weren't bothered by their determination.
In his partial summary judgment ruling before the trial, Engoron found that the New York attorney general provided "conclusive evidence" that Trump inflated his assets between $812 million and $2.2 billion.
"Even in the world of high finance, this Court cannot endorse a proposition that finds a misstatement of at least $812 million dollars to be 'immaterial,'" Engoron wrote.
Similarly, Deutsche Bank's valuation services group undercut Trump's net worth estimate by roughly than $2.4 billion when they evaluated his 2013 statement of financial condition. Despite that, the bank still loaned Trump millions for three of his properties.
"It would not be unusual," Unell said about the discrepancy identified by the bank.
Engoron cut him off before he could answer whether the discrepancy was within the "adjustment within the range that the court determined."
"I can do the math," Engoron said.
Trump easily qualified for private banking loans, expert says
The defense's commercial real estate expert pushed back on the state's contention that Donald Trump used fraudulent means to gain access to favorable loan rates through Deutsche Bank's private wealth management division.
Defense expert Robert Unell testified that Trump "clearly qualified" for commercial loans through the bank's private wealth group.
State attorney Kevin Wallace had argued that Trump "lied to the private wealth group to get these loans," which would support an increased fine in the case.
Unell, however, said, "I have not seen or heard any evidence that President Trump did not qualify for the private wealth management group."
Deutsche Bank managing director Dave Williams, whose testimony Unell reviewed before taking the stand, said earlier that Trump easily met the bank's $100 million net-worth requirement for high-net-worth individuals.
Wallace, however, appeared to argue that Trump would have been disqualified from the private wealth division based on the act of submitting an allegedly false financial statement, rather than an inability to meet a net-worth requirement.
Judge backs argument that Trump fraudulently got better loan terms
State attorney Kevin Wallace, challenging the testimony of an expert witness for the defense, angrily argued that Trump used fraudulent means to gain access to favorable loan rates through Deutsche Bank's private wealth management division.
The exchange came during Wallace's cross-examination of defense expert Robert Unell, who disputed the state's claim that Trump's alleged misstatements cost lenders $168 million in lost interest because, Unell said, the loan rates the state used in their calculation were higher than the rates Trump was entitled to when he used a personal guarantee as a private wealth client.
"Once you are in the private bank, you are in this sort of rarified air, and you get access to these rates ... it is a flawed premise to say you have to compare it to the outside air," argued Trump attorney Chris Kise after Judge Arthur Engoron removed Unell from the courtroom so the attorneys could hash out the permissibility of Wallace's argument.
Shouting at Kise for repeatedly making lengthy objections, Wallace argued that Trump would have not qualified for the private bank rates had he not fraudulently overstated his assets.
"The court has found that Mr. Trump committed fraud," Wallace said. "To get into the private wealth group, he committed fraud."
"He lied to the private wealth group to get these loans. Therefore, we are looking at what the interest rate would have been had he not had access to the group he lied to," Wallace said of the state's calculation.
Overruling Kise's objection, Engoron said that he supported Wallace's theory.
"I think his explanation is correct," Engoron said.
Michael Cohen 'told the truth': Judge Engoron
On Michael Cohen, Donald Trump's former lawyer and self-described "fixer," Judge Engoron wrote in his ruling that he found the star witness to be a credible witness despite having been convicted of perjury.
"His testimony was significantly compromised by his having pleaded guilty to perjury and by some seeming contradictions in what he said at trial," Engoron wrote. "However, carefully parsed, he testified that although Donald Trump did not expressly direct him to reverse engineer financial statements, he ordered him to do so indirectly, in his 'mob voice.'"
Engoron continued that although the "animosity between the witness and the defendant is palpable, providing Cohen with an incentive to lie, the Court found his testimony credible, based on the relaxed manner in which he testified, the general plausibility of his statements, and, most importantly, the way his testimony was corroborated by other trial evidence."
A "less-forgiving factfinder" might have come to a different conclusion and not believed "a single word of a convicted perjurer," Engoron wrote.
"This factfinder does not believe that pleading guilty to perjury means that you can never tell the truth," he continued. "Michael Cohen told the truth."
Cohen, who pleaded guilty in 2018 to lying to Congress about the Russia probe, addressed the passage on social media, writing on X, "Judge Engoron's determination regarding my veracity at the NYAG Trump civil fraud trial. Michael Cohen told the truth!"