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.


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


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Trump Organization monitor flags financial misstatements

A report issued Friday by the former judge appointed to serve as the Trump Organization's independent monitor by Judge Arthur Engoron found that the company has been cooperative, implemented some changes, and issued necessary corrections to financial statements; however, the report also outlined multiple errors and misstatements observed by the monitor over her 14 months in the role.

The report, by independent monitor Barbara Jones, was issued at the request of Judge Engoron ahead of his expected ruling in Trump's civil fraud trial.

"It is important to note that the Trump Organization acknowledged the disclosure issues described after I brought them to its attention and has been open to recommendations to improve accuracy and transparency," Jones wrote in her report.

However, Jones wrote, "Absent steps to address the items above, my observations suggest misstatements and errors may continue to occur, which could result in incorrect or inaccurate reporting of financial information to third parties."


Trump lawyer calls NY AG's 'Pharma Bro' comparison 'irresponsible'

A day after New York Attorney General Letitia James cited a ruling involving "Pharma Bro" Martin Shkreli to support a lifetime real estate ban for Donald Trump, a defense lawyer responded in a letter to the court calling the comparison "misplaced and irresponsible."

The New York AG said Tuesday that a federal appeals court decision upholding a lifetime industry ban for Shkreli should convince Judge Arthur Engoron to impose a lifetime real estate ban on Trump.

Defense attorney Clifford Robert, in response, wrote Wednesday that "the absurdity of the Attorney General's latest effort would be almost comical but for the sobering future consequences of her shameless abuse of power."

Robert argued that Trump's fraud case lacks witnesses, complaints, and victims compared to Shkreli's case.

In a statement to ABC News, Trump attorney Chris Kise said the ruling in Trump's case could have far-reaching implications for the New York business community.

"This is not just about President Trump. Every major bank CEO and every Wall Street participant should speak out now before the Attorney General's shocking and tyrannical interference in the capital markets places all New York business transactions at risk," Kise said.


NY AG cites 'Pharma Bro' ruling in seeking lifetime ban for Trump

The New York attorney general's office says a federal appeals court decision upholding a lifetime industry ban for disgraced "Pharma Bro" Martin Shkreli should convince Judge Arthur Engoron to impose a lifetime real estate ban on Donald Trump.

In a letter to Judge Engoron, state attorney Colleen Faherty cited Tuesday's decision in the Shkreli case to justify the NY AG's request to ban the former president from the New York real estate industry for life.

According to Faherty, New York State Executive Law 63(12) -- which was used in the NY AG's lawsuits against both Trump and Shkreli -- gives the court the ability to "issue a permanent and plenary ban in a particular industry."

"63(12) is the Swiss Army knife of the AG's Office," said Tristan Snell, a former lawyer with the New York attorney General's office who used the law to sue Trump over the now-defunct real estate seminar called Trump University. "If you don't have laws like this in place, that you basically allow lies and misrepresentations to be endemic."

A final decision in Trump's civil fraud case is expected later this month.


James releases video of Trump's April 2023 deposition

New York Attorney General Letitia James on Friday released video of former President Trump's April 2023 deposition in the case.

Video of the deposition, the transcript of which was released by the attorney general in August 2023, was released as part of a public records request.

As ABC News reported in August, Trump in the deposition called his real estate portfolio "the Mona Lisa of properties" and suggested his assets were worth far more than what appeared in his statements of financial condition that are at the center of the New York AG's case.

The videotaped deposition proved to be a preview of Trump's testimony at trial earlier this month, in which he bragged about his finances and declared himself "an innocent man."


Statements appear to ignore appraisals of undeveloped lots

Cushman & Wakefield executive David McArdle, who was hired to appraise the value of 71 undeveloped residential units at the Trump National Golf Club in Westchester County, New York, testified that he also conducted multiple appraisals for conservation easements at the property in 2014 and 2015.

Signing a conservation easement would allow the Trump Organization to give up their development rights and treat the difference in property value as a charitable donation, according to the New York attorney general.

By giving up the right to develop the 71 residential units, McArdle found that the donation was worth $43 million, according to an April 2014 appraisal. A later appraisal McArdle conducted in 2015 landed on a similar valuation of $45.2 million.

But Trump's financial statements from those years appear to ignore the appraisals, valuing the land from the undeveloped units at $101 million, according to documents entered into evidence.

"Based on the supporting data, the only source for the increase in the number of units and profit per unit were telephone conversations with Eric Trump," the New York attorney general alleged in her complaint.

McArdle also testified that he was consulted to appraise Seven Springs, a New York estate Trump purchased for $7.5 million in 1995.

To value the property, which could be subdivided into 24 to 26 residential lots, McArdle testified that he toured the site, consulted a local expert, and spoke with Eric Trump on multiple occasions.

"He had a very high opinion of the property, which didn't surprise me," McArdle said.

His appraisal ultimately determined the total value for the lots in 2014 was $30-$50 million, McArdle said.

But the New York attorney general alleges that appraisal was ignored in Trump's 2014 financial statement, in favor of a "false and misleading" value of $161 million for a portion of the undeveloped lots.