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
James, Trump respond as defense begins its case
In a video statement posted to social media, New York Attorney General Letitia James said that the testimony of Donald Trump Jr. yesterday failed to refute any of her case against Donald Trump and his adult sons.
"After spending a full day walking through a marketing presentation to sell us all on the greatness of the Trump Organization, the defendants did not make a single point to refute the case we brought against them," James said of Trump Jr., who led off the defense's case.
Trump's eldest son, an executive VP with the family firm, functionally served as a summary witness to explain the history and notable assets of the Trump Organization, repeatedly using words like "spectacular" and "incredible" to spell out the details of Trump's properties.
James, meanwhile, drew the ire of Donald Trump for appearing to smile in court.
"A.G. Letitia James is smirking all day long from her seat in Court, as New York continues to set records in murder and other violent crimes, and businesses flee to other States," Trump wrote on Truth Social this morning, despite murders in New York City being down nearly 10% this year according to the NYPD.
Court adjourns for day after tax lawyer's testimony
The defense wrapped up the first day of its case with testimony from Donald Trump's former external tax lawyer, Sheri Dillon, who returned to the witness stand to clarify her actions related to conservation easements at Trump's properties.
Dillon previously testified during a lengthy and combative portion of the state's case.
"Welcome back. I feel like I am at a reunion -- Trump trial reunion," Judge Engoron joked when Dillon returned to the courtroom.
Dillon, explaining a potential gap in email communications about specific deals, testified that she often communicated with Eric Trump over the phone.
"If I picked up the phone and talked to him, I would know he knew what he needed to know," Dillon testified.
She also said she advised Trump's appraiser, David McArdle, that the company could add 40 additional residential units at Trump National Golf Club in New York's Westchester County by filing a new offering plan, according to an email shown in court. The clarification challenges the New York attorney general's allegation that a $101 million increase in the value of undeveloped land was based on an unfounded plan by Eric Trump to add units to the property.
During a short cross-examination, state attorney Louis Solomon attempted to challenge Dillon's authority to provide such legal information to McArdle.
"Do you know if a sponsor has a right to have an offering plan accepted for filing merely because the development meets the requirements for zoning?" Solomon asked.
"No, I do not," she responded.
Dillon concluded her testimony, and court then adjourned for the day.
Trump Jr. acknowledges positive rapport with judge
Speaking outside the courthouse following his testimony for the defense, Donald Trump Jr. told ABC News that he seems to have a positive relationship with Judge Engoron.
"Perhaps there's a New York personality there, but no I think he understood," Trump Jr. said when ABC News suggested he and the judge appeared to get along. "I can't help myself even in this very serious situation. If you take yourself too seriously the world sort of sucks. You got to have a little bit of fun with it, so I did."
His relationship with the judge appears to stand in contrast to that of his father, who has accused Engoron of bias and insulted him from the witness stand.
"We had some quips in the courtroom the first time I was here," Trump Jr. said of Engoron. "Sort of gave me a fist bump on the way out. I guess I had a rather snappy response to something that was -- I can't even remember what it was right now. He said, 'That was really funny.'"
Asked by ABC News whether Trump Jr. shared his father's views about the judge being biased, the son demurred.
"Listen, I don't even know how far the gag order applies, so I don't need to do that and put myself -- I'm in enough crosshairs, guys," he said.
Trump Jr. says aunt's death made for a 'rough day'
Following the completion of his testimony, Donald Trump Jr. made the first family comments acknowledging the death of his aunt, Maryanne Trump Barry, calling it "a rough day."
"Obviously, a little bit of a rough day, but I've still got to deal with this stuff. We've got to keep doing it. That's the nature of all of this. But no, it's a rough day for myself and my family," Trump Jr. said of the news that former President Trump's sister had passed away at 86.
Trump Jr. also slammed New York Attorney General Letitia James for bringing the civil fraud case despite what Trump Jr. said was "no actual person complaining other than the attorney general herself."
"Hopefully, one day the people of this great city will realize what's going on. They'll realize the destructive practices here. They'll realize just how insane that is. And they'll be begging for guys like Donald Trump to come back to New York City to reshape the skyline as he's done for decades," Trump Jr. said.
He said he does not plan to return to court for the continuation of the defense's case tomorrow.
Trump never risked breaching loan covenants, banker suggests
Deutsche Bank managing director Dave Williams downplayed the possibility that Donald Trump could have defaulted on the net-worth covenants included in his loans.
While both parties agree that Trump never defaulted on his loans, New York Attorney General Letitia James alleges that had Trump accurately reported the value of his assets, he could have risked defaulting on a loan covenant that required he maintain a net worth of $2.5 billion.
Defense attorney Jesus Suarez pushed back on that allegation by asking Williams about the severity of a covenant default -- i.e., breaching the terms of the loan -- compared to a payment default triggered by a missed payment.
"Generally speaking, a payment default is a more material default than a covenant default," Williams said. "It speaks definitively to the repayment of the loan."
Williams described a loan covenant as a "guardrail," and suggested that breaching the covenant would have brought Trump back to the negotiating table to adjust the loan terms.
Williams also reiterated that he was not aware of any loan or covenant defaults by Trump.
James is expected to request a fine of nearly $400 million for Trump's allegedly ill-gotten gains, including over $140 million based on the potential interest she says was lost by Deutsche Bank. By proving that the loan agreements were lawful, Trump's lawyers could significantly lower the fine Trump faces.