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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Deutsche Bank executives to testify for defense

A day after Trump lawyer Chris Kise asserted that the only person who believes the former president committed fraud in his business transactions is New York Attorney General Letitia James, that claim will face a key test over the next two days as Trump's lawyers call four executives from Deutsche Bank, Trump's primary lender at the time of the alleged conduct.

Trump's lawyers claim that the executives will prove that the bank would have still done business with Trump despite his inflated claims about his assets.

"They're skipping over the part where they have to establish that the gains are ill-gotten, meaning that the loans would not have been issued in the first place or that the terms would have been different," Kise said in November during an argument for a directed verdict.

James, however, says that the banks lost millions in potential interest based on Trump's inflated valuations.


Trump Organization VP returns to witness stand

Trump Organization Vice President Patrick Birney returned to the witness stand to describe his role preparing Trump's statement of financial condition between 2016 and 2021.

"Every new year, I would just copy and paste the spreadsheet from the year before," Birney said, testifying this time for the defense.

Birney largely testified about the spreadsheets of supporting data he prepared, as well as the supporting data he cited from year to year.

Court was adjourned for the day following Birney's testimony. He is set to return to the witness stand later this week after the court hears from witnesses from Deutsche Bank.


Trump exec disputes independent monitor's findings

Trump Hotels chief operating officer Mark Hawthorn disputed an August 2023 report from the Trump Organization's independent monitor that said the company continued to provide incomplete information to lenders.

Hawthorn had earlier testified that the monitor never communicated that they "uncovered fraud or any irregularities."

State attorney Andrew Amer confronted Hawthorn with the letter from the Trump Organization's independent monitor Barbara Jones flagging inconsistencies.

"Were you aware that Judge Jones had identified such inconsistencies?" Amer asked.

"Yes," Hawthorn answered -- but said that he stood by his initial statement that the monitor never uncovered fraud, claiming that the flagged issues were consistent with accounting practices.

"Did the monitor accuse the Trump Organization of disseminating false and misleading information?" defense attorney Clifford Robert asked on redirect examination.

"No," Hawthorne said.

Trump defense attorney Chris Kise used the disagreement about the monitor's findings to renew his request to question Jones, which Judge Engoron denied earlier in the afternoon.

"What the monitor thinks is clearly and squarely at issue," Kise said, describing the Trump Organization's issues as "minor accounting discrepancies which happen in a large corporation all the time."

"Every time you talk, there's a campaign speech," Engoron quipped following Kise's lengthy argument.

Engoron ultimately stood by his initial ruling, but said he would allow Kise to present cases, if they exist, supporting the defense's right to call the monitor.

"I will decide what reports mean and what implications there are," Engoron said about the monitor's findings.


Donald Trump to return to witness stand in December

Defense lawyers plan to call Donald Trump as their final witnesses in the former president's civil fraud trial.

Asked to confirm the final witnesses for the defense's case, defense attorney Chris Kise said that Trump is likely to testify on Dec. 11.

"I think we can make that work," Kise said, adding that Trump's exact schedule might change.

Eric Trump will also return to the witness stand on Dec. 6, according to Kise.

Those dates might change if Judge Engoron limits testimony from any of the remaining witnesses.

State attorney Kevin Wallace said that the New York attorney general may present a "minimal" rebuttal case.


Trump's business drew little scrutiny from bank, defense says

Deutsche Bank was a serious company in business with Donald Trump to make money, defense attorney Jesus Suarez said during his cross examination of former Deutsche Bank executive Nicholas Haigh.

At the height of its relationship with the Trump Organization the company loaned Trump over $378 million, and failed to commission independent appraisals of Trump's properties, Haigh acknowledged. While the bank listed lower estimates for the value of Trump's assets year after year, it continued to do business with Trump and his company.

"We ... the bank hadn't done all the due diligence one would do in the sense of the opinion of value you see in an appraisal," Haigh said, at one point agreeing with the defense's characterization that the bank's internal value services group conducted "sanity checks'' on the numbers.

The direct examination of Haigh by state attorney Kevin Wallace also left a central question about Deutsche Bank's activity unanswered.

In a letter to the court and in previous arguments, lawyers for the attorney general suggested that Haigh might have turned away Trump's business if he had known that Trump's assets were inflated in value.

"As this Court noted during summary judgment arguments, Mr. Haigh testified during OAG's investigation that he may not have authorized lending to the borrower if he had at that time been aware of the inflated asset values contained in Mr. Trump's SFCs [statements of financial condition]," a lawyer for the attorney general wrote to the court in a letter last week.

Wallace never directly posed the hypothetical to Haigh during his direct examination, leaving the question unresolved.

Court subsequently adjourned for the day, with Suarez telling the court he plans to continue his cross examination of Haigh through Thursday afternoon.