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.
Top headlines:
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
Judge says Trump's lack of remorse 'borders on pathological'
Judge Engoron, in his decision, excoriated the Trumps and their co-defendants for their "complete lack of contrition and remorse" that he said "borders on pathological."
"They are accused only of inflating asset values to make more money. The documents prove this over and over again. This is a venial sin, not a mortal sin."
"Defendants did not commit murder or arson," the judge wrote. "They did not rob a bank at gunpoint. Donald Trump is not Bernard Madoff. Yet, defendants are incapable of admitting the error of their ways. Instead, they adopt a 'See no evil, hear no evil, speak no evil' posture that the evidence belies."
Judge fines Trump $354 million
Former President Donald Trump must pay $354 million for fraudulent business practices, Judge Arthur Engoron has ruled.
Trump's sons Donald Trump Jr. and Eric Trump have been fined $4 million apiece, and former Trump Organization CFO Allen Weisselberg has been fined $1 million.
The decision bars Trump barred from serving as an officer of a New York company for three years, and bars his sons for two years apiece.
Regarding the dissolution of Trump's companies, the decision says, "This Court hereby modifies its September 26, 2023, Decision and Order solely to the extent of removing the language ordering the LLCs cancellation en masse. The restructuring and potential dissolution of any LLCs shall be subject to individual review by the Court appointed Independent Director of Compliance in consultation with Judge Jones."
In his decision, Engoron wrote that "Defendants' refusal to admit error -- indeed, to continue it, according to the Independent Monitor -- constrains this Court to conclude that they will engage in it going forward unless judicially restrained."
"Overall, Donald Trump rarely responded to the questions asked, and he frequently interjected long, irrelevant speeches on issues far beyond the scope of the trial," the judge wrote. "His refusal to answer the questions directly, or in some cases, at all, severely compromised his credibility."
"The accountants created these 'compilations' based on data submitted by the Trump entities," the decision said. "In order to borrow more and at lower rates, defendants submitted blatantly false financial data to the accountants, resulting in fraudulent financial statements. When confronted at trial with the statements, defendants' fact and expert witnesses simply denied reality, and defendants failed to accept responsibility or to impose internal controls to prevent future recurrences."
Of Donald Trump Jr., Engoron wrote, "Despite disclaiming responsibility for or knowledge of the Statements of Financial Conditions' contents, Trump, Jr. still insisted that the Statements of Financial Condition were 'materially accurate.'"
Engoron's decision follows an 11-week civil trial in New York, where Trump and three of his adult children testified.
New York Attorney General Letitia James sued Trump, his two adult sons, and Trump Organization executives in September 2022 for issuing fraudulent financial statements -- including over 200 false and misleading asset values between 2011 and 2021 -- to get better loan terms and business deals.
Judge concerned if ex-Trump CFO pleads guilty to perjury
Judge Arthur Engoron fired back at defense lawyers Thursday regarding former Trump Organization CFO Allen Weisselberg, who was allegedly engaged in plea talks with the Manhattan DA's office to resolve a potential perjury charge.
Engoron had asked the lawyers in the case for information on Weisselberg's potential guilty plea, based on reporting from The New York Times. One of the defense lawyers responded by characterizing the request as "unprecedented, inappropriate, and troubling."
"Arguing against judicial notice is attacking a straw person, as I have not taken, do not plan to take, and did not suggest or hint that I would take judicial notice of the subject New York Times article or the contents thereof," Engoron wrote in an email posted to the court's docket.
However, Engoron vowed that he would research and consider the issue if Weisselberg, a defendant in the fraud case, pleads guilty to perjury before Engoron issues his final ruling in the case.
"I am not reopening the case, but if someone pleads guilty to committing perjury in a case over which I am presiding, I want to know about it," Engoron said, adding that he reached out to Weisselberg's attorney for more information.
"You and your co-counsel have been questioning my impartiality since the early days of this case, presumably because I sometimes rule against your clients," Engoron wrote. "That whole approach is getting old."
Defense lawyers decline to provide details on potential perjury
Citing their ethical obligations, lawyers for the defendants in Donald Trump's civil fraud trial declined to provide details about "rumors of any kind" involving former Trump Organization CFO Allen Weisselberg and urged Judge Arthur Engoron to make a decision solely based on the evidence presented at trial, after Engoron asked them to weigh in on public reports that Weisselberg was engaged in plea talks with the Manhattan DA's office to resolve a potential perjury charge.
In a letter submitted to Judge Engoron Wednesday, defense attorney Clifford Robert urged the judge to strictly consider the record from the trial in his final decision, describing his request to provide information about Weisselberg based on a New York Times article "unprecedented, inappropriate and troubling."
"The Article simply does not provide any principled basis for the Court to reopen the record or question the veracity of Mr. Weisselberg's testimony in this case. Indeed, we respectfully submit that the Court's request for comment on this speculative media account is unprecedented, inappropriate, and troubling," Robert wrote.
In a separate letter, Alina Habba -- who represents Weisselberg in the civil case but is not his criminal defense lawyer -- declined to provide any information about the potential perjury and argued that no further action was needed on the matter.
"The New York Times article is neither admissible nor reliable, and it should not be considered in Your Honor's determination as to the merits of this case," Habba wrote. "We urge you to render your decision based solely on the evidence now before you."
"Court decisions are supposed to be made based on the evidence at trial, not on media speculation," defense attorney Chris Kise said in a statement.
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.