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


0

'We can all read,' judge chides defense attorney

Defense attorney Jesus Suarez spent the first hour of court walking former Deutsche Bank executive Nicholas Haigh through a year-by-year review of the bank's credit reports about Trump's loans.

Under questioning, Haigh has acknowledged that Deutsche Bank's analysis supported approving Trump's loans.

At the same time, Suarez' approach is testing Judge Arthur Engoron's patience.

"We can all read, so I don't know why we are spending so much time on this," Engoron said at one point, describing the testimony as "redundant" and "obvious."

Engoron also criticized Suarez for appearing to highlight the fact that Trump never defaulted on the loans themselves -- an issue that is uncontested by both sides in the case.


New York AG not in attendance for 2nd day

As the trial's eighth eighth day gets underway, New York Attorney General Letitia James is absent from court for a second day.

While James attended the first six days of the trial, she did not appear at the proceedings yesterday.

Roughly a dozen lawyers and staff from the New York attorney general's office have been attending the trial each day.


Defense to scrutinize Deutsche Bank's due diligence

Trump attorney Jesus Suarez will continue his cross examination of former Deutsche Bank risk management executive Nicholas Haigh when Trump's civil trial resumes this morning.

Deutsche Bank was the Trump Organization's largest single lender between 2011 and 2022, loaning the former president upwards of $300 million through the bank's private wealth management division.

Describing himself as an "ultimate decider" of the loans' riskiness, Haigh testified Wednesday that his decision-making process relied on Trump's financial statements -- documents that the New York attorney general alleges were fraudulent.

"I assumed that the representations of the assets and liabilities were broadly accurate," Haigh said yesterday.

Earlier witnesses have testified about how Trump's financial documents were drafted, finalized, and sent to banks -- but Haigh is the first witness to testify from the perspective of the banks, which the attorney general says were allegedly deceived by Trump's inflated financial statements.

Suarez, during his first hour cross examining Haigh on Wednesday, said Deutsche Bank was a sophisticated company that profited from the loans.

Haigh also acknowledged that the bank failed to conduct its own independent appraisals of Trump's top properties, and did not rigorously examine his financial information.


Trump's business drew little scrutiny from bank, defense says

Deutsche Bank was a serious company in business with Donald Trump to make money, defense attorney Jesus Suarez said during his cross examination of former Deutsche Bank executive Nicholas Haigh.

At the height of its relationship with the Trump Organization the company loaned Trump over $378 million, and failed to commission independent appraisals of Trump's properties, Haigh acknowledged. While the bank listed lower estimates for the value of Trump's assets year after year, it continued to do business with Trump and his company.

"We ... the bank hadn't done all the due diligence one would do in the sense of the opinion of value you see in an appraisal," Haigh said, at one point agreeing with the defense's characterization that the bank's internal value services group conducted "sanity checks'' on the numbers.

The direct examination of Haigh by state attorney Kevin Wallace also left a central question about Deutsche Bank's activity unanswered.

In a letter to the court and in previous arguments, lawyers for the attorney general suggested that Haigh might have turned away Trump's business if he had known that Trump's assets were inflated in value.

"As this Court noted during summary judgment arguments, Mr. Haigh testified during OAG's investigation that he may not have authorized lending to the borrower if he had at that time been aware of the inflated asset values contained in Mr. Trump's SFCs [statements of financial condition]," a lawyer for the attorney general wrote to the court in a letter last week.

Wallace never directly posed the hypothetical to Haigh during his direct examination, leaving the question unresolved.

Court subsequently adjourned for the day, with Suarez telling the court he plans to continue his cross examination of Haigh through Thursday afternoon.


Trump Jr. details history of Trump Organization

Testifying for the defense, former President Trump's eldest son described his father as a real estate "visionary" who "sees the sexiness in a real estate project," creating value for the family business that cannot be captured on paper.

Donald Trump Jr. began his testimony with a quip after Judge Engoron welcomed him back to the stand following his testimony earlier in the month.

"I'd say it's good to be here, but the attorney general would probably sue me for perjury," Trump Jr. joked.

In his testimony, Trump Jr. described the Trump Organization as "a large family business," with Trump and his eldest children at the top and other executives handling many of the details.

"If there were numbers and things, I would rely on them to give me that," Trump Jr. said.

He recounted the history of the Trump Organization, beginning with his great-grandfather who he said built hotels in the Yukon Territories of Canada. His grandfather, Fred Trump, "started working on job sites around Queens, learned the trades" and eventually "created an incredible portfolio, by the time of his passing, of rental apartments in Brooklyn and Queens."

A state attorney jokingly objected that references to the 1800s were outside the statute of limitations -- then more seriously objected to the history lesson's relevance.

"I think it is relevant to get the historical perspective -- I find it interesting," Judge Engoron said in overruling the objection. "Let him go ahead and say how great the Trump Organization is."

Trump Jr. obliged.

"My father learned a lot of the business from him, but had some flair and saw New York City and Manhattan as the ultimate frontier," he said. Speaking of Trump Tower, he said, "I think it would have been one of the first, I think great, ultra-luxury real estate emerging in Manhattan."