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.
Top headlines:
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
'I've had a lot of cash,' Trump says about his net worth
Testimony has resumed following the lunch break, with state attorneys asking the former president about his net worth as it related to loan requirements.
Trump agreed to maintain a net worth of $2.5 billion and cash in excess of $50 million when Deutsche Bank granted him a loan in 2011 for his Trump National Doral golf club, according to documents entered into evidence.
Asked about those covenants -- which Trump satisfied by certifying his financial statements -- Trump only addressed the cash on hand.
"They always want to make sure the cash was substantial," Trump said, claiming that he had $300 to $400 million in cash at the time.
"I've had a lot of cash for a long time," Trump said. "That is all they cared about."
Trump attorney says AG's case has 'nothing but their politics'
Trump attorney Alina Habba assailed the New York attorney general's $250 million civil case and the judge overseeing it, in remarks to reporters during the lunch break.
"What I'm seeing is such a demise of the American judicial system," Habba said outside the courthouse. "They’ve got nothing but their politics."
"This is a judge who clearly has an issue with facts that are not good for the case," she said of Judge Arthur Engoron.
Trump distances himself from preparation of statements
The courtroom has broken for lunch before Trump's testimony resumes for the afternoon session.
Trump testified in the morning session that he tasked then-Trump Organization executives Jeffrey McConney and Allen Weisselberg to work with a "very highly paid accounting firm" to handle his annual statements of financial condition, distancing himself from the preparation of the statements that are at the center of the New York attorney general's case.
"All I did was authorize for people to give what was necessary so they could do the statement," Trump said.
Asked about the valuation of his Mar-a-Lago Club in Florida, which was assessed at a dramatically lower value than Trump claimed because a deed restriction prevented it from being used as anything but a social club, Trump defended his valuation, saying, "We have the right to change it back to a house."
The former president also continued to tout his financial statements' so-called "worthless" clause which he said ensured that banks did not take the statement at face value.
"We have a disclaimer that says, 'Do your own due diligence. Don't under any circumstances count on anything here,'" Trump said in court, at one point waving a piece of paper in the air about the clause that he said vindicated him.
"I would love to read that if I could, your honor?" Trump asked Judge Engoron.
"No," Engoron said, shooting down the request.
"No shock," Trump quipped.
'We are not going to hear about the disclaimer clause,' says judge
After tamping down on Trump at the start of the day, Judge Engoron has largely been granting him space to engage in the kind of provocative language he often uses on social media.
But at one point, when Trump pulled out a piece of paper about a disclaimer and said it vindicates him, Engoron stepped in.
The former president argued in his deposition earlier this year, and has repeatedly said on social media, that a so-called "worthless" disclaimer included in his statements of financial condition -- which warns lenders that the valuations in the document require judgment and that they should do their own analysis -- insulates him from liability.
Engoron, an a partial summary judgment issued before the start of the trial, ruled otherwise.
"No, no, no, we are not going to hear about the disclaimer clause," Engoron responded when Trump pulled out the paper.
Trump firm 'in compliance' but under 'enhanced monitoring'
Donald Trump agreed to "enhanced monitoring" of the Trump Organization's finances after the company's independent monitor flagged cash transfers of roughly $40 million over the last 10 months.
Former judge Barbara Jones, the independent monitor requested by the New York attorney general in the case, wrote in a letter to Judge Arthur Engoron that she had identified three separate cash transfers of more than $5 million, totaling approximately $40 million. Jones said the transfers included $29 million in tax payments and roughly $10 million for insurance premiums.
"We have discussed with Defendants why these transactions were not previously disclosed, and I have now clarified (and Defendants have agreed) that all transfers of assets out of the Trust exceeding $5 million must be reported," Jones wrote.
Jones also requested information related to an intercompany loan and flagged the delayed disclosure of tax returns for six of Trump's entities, which defendants acknowledged as their mistake.
"Defendants continue to cooperate with me and are generally in compliance with the Court's orders, and have committed to ensure that all required information, including tax information and cash transfers, are promptly disclosed to the Monitor," Jones wrote.
Addressing a report she issued in August about incomplete financial disclosures by the Trump Organization, Jones added that the Trump Organization took additional steps to remedy and disclose the issue.
"By taking these steps I believe Defendants have resolved the issues identified in the August Report, subject to ongoing monitoring," Jones wrote.