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 touts state's case while Habba criticizes it
New York Attorney General Letitia James expressed confidence in her case while Trump attorney Alina Habba was equally dismissive, following the adjournment of court for the day.
Speaking to reporters outside the courthouse after she rested her case, James said that Ivanka Trump's friendly courtroom demeanor should not distract from the fact she engaged in fraud.
"She clearly was involved in negotiating and securing loans, favorable loans, for the benefit of the Trump Organization for Mr. Trump, and her brothers and for herself," James said of the former president's eldest daughter.
James praised Ivanka Trump testimony, saying it was cordial, disciplined, courteous, friendly, and nice. But the New York AG said it was also inconsistent.
"Her testimony raises questions with regard to its credibility," James said, later adding, "she was enriched, and clearly you cannot distance yourself from that fact."
Exiting court minutes after James, Habba slammed the state's effort, saying, "It is very clear that they have failed to prove the essential elements of the case."
Habba went so far as to recommend that the Manhattan district attorney prosecute former Trump attorney Michael Cohen for perjury and investigate how much money was "wasted by New York on a fake, phony case."
"We have spent three years doing this, based on testimony from Michael Cohen, who walked into that courtroom, and under oath and open court admitted that he perjured himself," Habba said referring the Cohen's earlier testimony.
New York attorney general rests her case
New York Attorney General Letitia James has rested her case against Donald Trump and his adult sons, state attorney Kevin Wallace told the court.
Judge Engoron confirmed that he will address motions for a directed verdict -- as well as motions regarding the defense's expert testimony -- during a half day of court tomorrow.
"We don't have any witnesses for tomorrow," Trump attorney Chris Kise told the judge.
The defense's case is expected to start in earnest on Monday.
Ivanka Trump steps down from the stand
Ivanka Trump stepped down from the witness stand following a day of testimony that saw the proceedings grow more heated as the afternoon wore on.
At one point toward the end of her cross-examination, Ivanka Trump delivered a lengthy response about working with Democratic lawmakers to execute the redevelopment of the Old Post Office in Washington, D.C., which became a Trump-owned hotel in 2016.
When defense attorney Jesus Suarez sought clarification that those lawmakers were Democrats, attorneys sitting at the state's counsel table appeared to laugh -- infuriating Suarez.
"I have to sit here and ask questions and listen to them laugh?" Suarez shouted, pointing at members of the attorney general's office and calling their conduct "insulting."
"They're sitting there laughing ... it's not funny," Suarez said.
Judge Engoron sought to quell tempers, framing the reaction as an expression of amusement regarding the repetition of Suarez's questioning.
"I think they are laughing … three, four, five times that these were congressional representatives," Engoron said. "Maybe they found the question funny."
Trump attorney accuses judge of 'double standard'
After a relatively calm day, tensions flared between Judge Engonon and Trump lawyer Chris Kise, after Kise accused the judge of applying a "double standard" to the defense team.
Defense attorney Jesus Suarez attempted to question Ivanka Trump about a document from the General Services Administration, prompting an objection from state attorney Louis Solomon, who argued that Suarez lacked the foundation to ask about the document.
"I've objected hundreds of times now," an exasperated Kise said, arguing that the state attorneys used documents with less foundation provided.
"I continually object to your constant insinuation that I have some sort of double standard. It's just not true," Engoron replied forcefully.
Ivanka Trump, sitting feet away from Engoron, appeared to watch the exchange in disbelief.
"I wish it were different. I respect your honor's position. I just see these ruling ... frequently going in a different direction," Kise said.
"Their objections have been of greater validity than yours," Engoron shot back.
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.