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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Rebuttal witness assails Trump's disclosures

State attorney Kevin Wallace concluded his direct examination of the New York attorney general's second and final rebuttal witness amid frequent objections by defense lawyers.

Lewis attempted to explain how Donald Trump's statements of financial condition failed to disclose that he did not conduct a discounted cash flow analysis, contributing to the over-valuation of some of his assets.

"There is no mention of discounting or future value in the disclosure," Lewis said, disagreeing with testimony from defense expert Jason Flemmons -- as well as former Mazars USA accountant Donald Bender, who testified as a state witness.

“Are you impeaching your own witness?” Engoron asked state attorneys regarding whether Bender’s testimony should no longer be considered credible.

"We didn't feel the need to," Wallace responded.

Lewis also suggested that Trump's external accountants at Mazars had less of an obligation to highlight issues that Flemmons suggested, since they were only conducting a compilation report rather than a more intensive audit. While Mazars had an obligation to flag obvious issues, they were not responsible for ensuring Trump's statements were compliant with generally accepted accounting principles, he testified.

"If while doing the compilation ... something comes to the attention of the accounts that could be a GAAP departure, they have a responsibility to bring that issue to the client," Lewis said regarding generally accepted accounting principles.

During the hour-long direct examination, defense lawyers objected at least 14 times, successfully interrupting the line of questions.

"I am lost," Engoron asked at one point. "Can you put this together?"

The parade of objections visibly irritating Wallace, who voiced his displeasure.

"Petulant outbursts don't really play well in the courtroom," quipped Trump lawyer Chris Kise in response.


Trump dismisses possibility of settlement

In a post on social media, Donald Trump dismissed the idea that his civil fraud trial might result in a settlement.

"HE RULED THAT I WAS A FRAUD BEFORE HE EVEN SAW THE CASE, THEN TRIED TO GET ME TO SETTLE. A TOTAL HIT JOB," Trump wrote about Judge Arthur Engoron.

Engoron has not addressed the possibility in court, but sounded sentimental this morning as he began what is likely to be the final day of the trial.

"In a strange way, I am going to miss this trial," Engoron said. "It has been an experience."


Accounting expert to testify in state's rebuttal case

A day after Donald Trump's lawyers rested their defense case that featured numerous expert witnesses, New York Attorney General Letitia James is set to call her own accounting expert as part of the state's rebuttal case.

Cornell professor Eric Lewis was qualified as an accounting expert over the objections of Trump's attorneys yesterday, and his direct examination is scheduled to begin this morning.

Lewis will likely address some of the findings reached by the defense's accounting experts, Jason Flemmons and Eli Bartov, whose testimony that Trump had adequate disclaimers on his financial statements is at the center of the defense's case.

Trump's lawyer Chris Kise aggressively criticized Lewis' qualifications during a lengthy voir dire session yesterday, but Judge Arthur Engoron remained convinced about Lewis' ability to testify as an accounting expert.


Defense attorney blasts expert witness in rebuttal case

Donald Trump's attorney Chris Kise unloaded on the second rebuttal witness called by New York Attorney General Letitia James after the defense had rested its case.

"The reason they brought this witness in here is, there is no one in the actual profession who would sustain the opinions they are asking of the witness," Kise argued about Cornell professor of practice Eric Lewis, who Judge Engoron qualified as an expert in accounting.

Kise exasperatedly questioned Lewis during a prolonged voir dire about his qualifications, criticizing his experience while knocking Engoron in the process.

"You are a professor of practice with no practice in the field of accounting," Kise told Lewis. "I probably have more experience in the practice of accounting than this witness."

Engoron nevertheless deemed Lewis an expert in accounting over Kise's objections that his expertise was "too broad" for the circumstances.

"I am not sure if anything will change a decision in this courtroom," Kise argued.

Engoron appeared worn out by Kise's lengthy attacks.

"Stop making speeches every time we have to discuss something," Engoron said for the umpteenth time.

Court was subsequently adjourned for the day, with the state's rebuttal case set to resume on Wednesday.


Trump loses bid to throw out limited gag orders, fines

Donald Trump has lost his appeal to throw out the limited gag orders and associated fines in his civil fraud trial.

In a decision Thursday, New York's Appellate Division, First Department rejected Trump's request to annul and vacate the limited gag orders imposed by Judge Arthur Engoron that prohibit Trump and attorneys from commenting on the judge's staff.

In November, Trump's lawyers asked the Appellate Division to vacate the gag orders, citing a provision of New York state law to personally sue Judge Engoron. But the court said in today's ruling that the method used to appeal the gag orders was an improper application of the law.

"To the extent there may have been appealable issues with respect to any of the procedures the court implemented in imposing the financial sanctions, the proper method of review would be to move to vacate the Contempt Orders, and then to take an appeal from the denial of those motions," the ruling said, indicating that Trump should use the normal appellate process to pursue the vacating of the gag orders.

The court also determined that the "extraordinary remedy" requested by Trump's lawyers did not match the minimal potential harm from barring statements about Engoron's staff.

"Here, the gravity of potential harm is small, given that the Gag Order is narrow, limited to prohibiting solely statements regarding the court's staff," the decision said.