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
Golf club's purchase price was inflated to cover refunds
When the Trump Organization purchased their golf course in Jupiter, Florida, in 2013, they paid $5 million for the club, longtime Trump Organization controller Jeff McConney testified.
But when they put the property in their books, they listed the purchase price at $46 million, said McConney.
The $41 million jump in price was attributed to the potential that Trump would have to pay back the purported "refundable" fees paid by each of the club's members, according to McConney.
While listing $46 million as the total purchase price, the Trump Organization failed to account for the $41 million dollars in fees on the liability side of the company's books, said state attorney Andrew Amer.
"Even if they do have to repay at some point in time, that is way out in the future, correct?" Amer asked, which McConney conceded was the case.
Trump valued housing units at twice their appraisal, says controller
In 2013, the Trump Organization increased the value of Trump National Golf Club Westchester in Briarcliff Manor, New York, based on the planned addition of 71 midrise housing units, state attorney Andrew Amer said during his questioning of longtime Trump Organization controller Jeff McConney.
The company said the units, when built, would be worth $101 million -- even though the company was given an appraisal by real estate firm Cushman & Wakefield that put the value of the units at $43.3 million, Amer said.
"The value remained the same in 2015, based on a telephone conversation that you had with Eric Trump on Nov. 17, 2015, where Eric Trump said to you, 'Leave value as is,'" Amer asked McConney.
"Correct," McConney answered.
"So notwithstanding that there was this appraisal, Eric Trump told you to leave the value as is?" Amer repeated.
"Correct," McConney replied.
McConney also testified that at some point, he and former Trump Organization chief financial officer Allen Weisselberg added a 30% "brand premium" to the valuations of some of Trump's golf properties.
AG says Trump's request to pause trial would 'sow chaos'
New York Attorney General Letitia James argued that Donald Trump's legal team is trying to "sow chaos" by pausing the ongoing trial, and that a pause would risk creating a "cascade of delays" to Trump's multiple legal matters, according to a letter filed by the AG after Trump sought to stay the proceedings.
"Defendants cannot come close to demonstrating that the equities or the merits favor the truly extraordinary relief of upending an ongoing trial midstream," James wrote.
James argued that the request to pause the trial while awaiting the appeal of the judge's partial summary judgment issued last week would be unreasonably disruptive to both parties and the witnesses scheduled to testify in the case.
"And tellingly, they waited until after Mr. Trump decided to stop attending the trial," the letter said. "Defendants have thus sought to interrupt trial midcourse in a highly disruptive manner, and this Court should deny an interim stay on that basis alone."
James also accused Trump's legal team of attempting to "play one court against the other," by pitting his civil matter against the schedule of Trump's other pending cases.
The former president, over the next seven months, faces criminal trials in the Georgia election interference case, the federal election interference case, the New York hush money case, and the federal classified documents case.
Estate's valuation included 7 mansions that weren't yet built
When the Trump Organization valued its Seven Springs compound in New York's Westchester County at $261 million, the company included seven mansions, estimated to be worth $23 million each, that had not been built, longtime Trump Organization controller Jeff McConney testified.
In contrast, an appraiser had said Seven Springs was worth $56 million, excluding development rights for the property, which hadn't been awarded.
McConney testified that he did not factor into the valuation when, or whether, the homes would be built.
"You have treated, for the purposes of this valuation, a profit of $23 million per home as if it were realized immediately?" asked Andrew Amer with the New York attorney general's office.
"Correct," McConney said.
Amer said that Trump Organization VP Eric Trump, in a call with McConney the following year, instructed McConney to continue to value the seven mansions the same as he did in 2013.
McConney is testifying as a hostile witness since he is also a named defendant in the case. It gives Amer wider latitude in his examination, though defense attorneys have made several objections about leading questions.
The proceedings were briefly interrupted by the blaring of a horn that was audible in the courtroom, prompting Amer to interrupt his questioning and remark, "Someone is having a celebration."
Judge Engoron, who has displayed a dry wit throughout the trial, responded, "Maybe they're celebrating us."
Trump departs for the day
Former President Trump did not return to the courtroom following an afternoon break, and his motorcade departed the courthouse shortly thereafter.
While leaving the courtroom, Trump was asked about a court employee who attempted to approach him during the trial today and was subsequently arrested.
"The attorney general should be arrested for what she's doing," Trump said.