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 warned lenders statements may be unreliable, expert says

Donald Trump disclosed that 95% of the assets listed in his 2014 statement of financial condition departed from generally accepted accounting principles -- known in the industry as GAAP -- according to the defense's expert witness Jason Flemmons.

The testimony from the defense's accounting expert bolsters Trump's argument that the departures from GAAP in his statements were adequately disclosed to lenders, making the lenders themselves responsible for drawing their own conclusions about the valuations listed in the documents.

It also supports the defense's position that Trump's statements fell within the regulations on personal financial statements, thus shielding him from allegations of fraud.


Judge delays ruling on mistrial after Trump claims bias

Judge Arthur Engoron did not issue a ruling on the defense's motion for a mistrial in court, opting to give the New York attorney general time to determine if the state wants to respond to the request.

"I would ask if we could have until tomorrow to determine if we want to put in anything," state attorney Kevin Wallace said after Engoron's asked if the state plans to file a response.

The testimony of expert witness Jason Flemmons is now resuming.


Motion accuses judge of 'predetermining' trial's outcome

In their motion for a mistrial, lawyers for Donald Trump and his adult sons argue that Judge Engoron has "predetermined the outcome of this proceeding and is merely going through the motions before it ultimately doles out punishment."

Writing that the actions of both Engoron and his clerk create an appearance of impropriety that has resulted in "biased rulings," Trump's lawyers warn of wide-reaching implications.

"Left unchecked, the introduction of such demonstrable pro-Attorney General and anti-Trump/big real estate bias into a case of worldwide interest involving the front-runner for the Presidency of the United States impugns the integrity of the entire system," they write.

Their three-pronged motion argues that the extrajudicial conduct of Engoron, the political activity of his clerk, and their rulings -- including their gag order and fines -- are each irreparable harms that can only be remedied by scrapping the entire trial.

"Only the grant of a mistrial can salvage what is left of the rule of law," they write.


Trump is 'trying to dismiss the truth,' NY AG spokesperson says

A spokesperson for New York Attorney General Letitia James described Donald Trump's motion for a mistrial as an effort "to dismiss the truth and the facts."

"Donald Trump is now being held accountable for the years of fraud he committed," the spokesperson said. "He can keep trying to distract from his fraud, but the truth always comes out."

Trump's motion for a mistrial takes aim at Judge Engoron as well as his law clerk, who frequently collaborates with the judge before he rules on objections, the admissibility of evidence, and other legal matters.

The judge imposed a limited gag order prohibiting statements about his staff after Trump posted about the clerk on social media.


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.