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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Ivanka Trump excused as lawyers debate statue of limitations

Ivanka Trump was removed from the courtroom for ten minutes while attorneys argued over whether the statute of limitations applied to the deals discussed during her testimony.

"These deals ... had requirements for updated financials year, after year, after year," Judge Arthur Engoron said. "To me, they are very much part of this case."

Donald Trump's lawyer argued that Ivanka Trump's conduct between 2011 and 2013 could not impact someone else recertifying the loans years later.

"It's theoretically impossible -- it's beyond implausible that some event that took place in 2016 would have changed the course of events in 2011, 2012, and 2013," Trump attorney Chris Kise said.

Judge Engoron appeared unconvinced by the arguments and allowed the testimony to continue.

"The ship has sailed," Engoron said.


Ivanka Trump says she wasn't 'privy to' father's financial statements

Asked about her involvement in her father's statements of financial condition that the judge has already determined fraudulently overvalued his real estate and inflated his net worth, Ivaka Trump said she had no knowledge of them.

"I would assume he had a personal financial statement," Ivanka Trump said. "Those weren't things that I was privy to."

Regarding a lease she had for a penthouse apartment in Trump Park Avenue that included an option to buy for $8.5 million, the New York attorney general's office said Trump's statement financial condition claimed that units in the building were selling for $20.8 million -- two and a half times as much.

Asked by state lawyer Louis Solomon whether she knew about that discrepancy, Ivanka Trump responded, "I wasn't involved in his statement of financial condition so I can't say what it took into account or didn't take into account."

Solomon pressed her about the documents, asking, "Did you know whether he had personal financial statements, Donald J. Trump?" Solomon asked.

"I'm not involved in his personal financial statements. I didn't know about his personal statements, per se, other than what you've showed me," Ivanka Trump responded.

"Did you have any role in preparing Donald J. Trump's statements of financial condition?"

"Not that I'm aware of," she replied.


Ivanka Trump sought lower net worth requirement for loan

In 2011, as the Trump Organization sought financing for its purchase and renovation of the Doral golf club in Miami, Deutsche Bank agreed to loan Trump the necessary funds, with one critical catch -- the deal would be secured by Donald Trump's net worth.

"Is DJT willing to do that? Also, the net worth covenants and DJT indebtedness limitations would seem to me to be a problem?" Trump Organization executive Jason Greenblatt wrote in an email to Ivanka Trump and CFO Allen Weisselberg that was entered into evidence. The arrangement required Trump to maintain a net worth of $3 billion.

Trump's 2011 statement of financial condition, one of the documents the New York attorney general alleges contained fraudulent valuations, listed his net worth as more than $4 billion. However Ivanka Trump asked Deutsche Bank to lower the amount of wealth her father would have to maintain, according to an email exchange entered into evidence.

"As I said before, I don't recall the net worth covenant," Ivanka Trump testified.

She proposed $2 billion, emails show. Deutsche Bank ultimately settled for $2.5 billion.


Courtroom reflects Ivanka Trump's calm demeanor

Ivanka Trump flashed a smile at Judge Engoron when he recommended to her that, when reviewing evidence, it would be easier for her to look at the big screen set up in the courtroom instead of the papers in her lap.

"Thank you," she said with a laugh.

Unlike her father, who roiled the judge and tangled with state attorneys during his testimony Monday, Ivanka Trump is reserved and soft spoken on the stand, at times speaking so quietly in answering questions that it's hard to hear her.

The entire courtroom appears to be following her tone, with Judge Engoron and attorneys from both side conducting themselves calmly even when objections are raised.


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.