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
Trump cancels plans to testify Monday
Donald Trump has canceled his plans to testify in his own defense in his civil fraud trial, the former president said in a statement Sunday.
"I will not be testifying on Monday. MAGA!" Trump wrote on social media.
Trump cited the testimony of his expert witnesses, the use of what he called his "ironclad disclaimer clause," and alleged bias by the judge overseeing the case as reasons he no longer planned to testify.
"I HAVE ALREADY TESTIFIED TO EVERYTHING & HAVE NOTHING MORE TO SAY OTHER THAN THAT THIS IS A COMPLETE & TOTAL ELECTION INTERFERENCE," he wrote.
The former president was due to return to the courtroom Monday after testifying last month in the state's case.
Accounting expert to resume after Trump testifies Monday
New York University accounting professor Eli Bartov will have to return to court on Tuesday to conclude his testimony, after his direct examination ran longer than expected.
After Bartov's direct examination concluded, state attorney Louis Solomon began his cross-examination -- but the parties agreed to adjourn for the day and resume the cross-examination next week.
Donald Trump is scheduled to be the only witness on Monday.
Once Bartov concludes his testimony, New York Attorney General Letitia James plans to present a brief rebuttal case.
Defense's accounting expert was paid $877K
The defense's accounting expert, Eli Bartov, was paid approximately $877,500 for his expert analysis, the New York University professor testified.
Bartov said he was paid an hourly rate of $1,350 for 650 hours of work, receiving payments from the Trump Organization and Trump's Save America PAC.
The state's lone expert witness, Michiel McCarty, was paid roughly $350,000 for his testimony.
Bartov's testimony about his compensation followed a tense exchange in which defense attorney Alina Habba accused Judge Engoron of "wasting time and money" by ignoring expert testimony.
"Why are we wasting our time if nobody is considering the words coming out of our experts' mouths?" Habba said.
Judge denies defense's 4th request to end trial
The second day of testimony from the defense's expert accounting witness prompted an argument between attorneys for the two sides over the basic question of what the case is about -- leading defense lawyers to make their fourth unsuccessful request for a directed verdict to end the trial.
The arguments came toward the end of direct testimony by accounting expert defense Eli Bartov, who asserted the New York attorney general's case lacked merit because there was no evidence of any fraud on Trump's statements of financial condition, and that any errors about the values of Trump's properties were unintentional and therefore immaterial.
When the defense attempted to question Bartov about those values, state attorneys objected -- prompting defense attorney Christopher Kise to leap from his seat.
"If they don't call anyone to dispute our values, how have they proven their case?" Kise said.
Judge Arthur Engoron, in a pretrial ruling, already decided that Trump conducted a decade's worth of business using fraudulent financial statements, and state attorney Kevin Wallace suggested that Bartov's findings do not change those findings.
"You can't use false statements in business. That's what the summary judgment decision is all about. I think it is pretty much what the rest of this case is about," Engoron said in response to Kise's question.
Kise argued that if the attorney general doesn't prove what Trump's asset values should have been, the case is a "completely rudderless ship" that needs to be "moored to some sort of standard."
"You can't just say it's a misstatement because you feel like it," Kise argued.
"The standard is truth," Engoron responded.
The exchange prompted Trump's legal spokesperson, Alina Habba, to make the defense's fourth motion for a directed verdict, arguing that Engoron is "wasting our time" if he won't consider their expert testimony.
"They have not proven their case. They haven't," Habba said in her request for a directed verdict.
"Denied," Engoron said within seconds of the request, without hearing a response from lawyers for the New York attorney general.
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.