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 moves for mistrial, claiming bias on part of judge, clerk
Donald Trump and his co-defendants have filed a motion seeking a mistrial on the grounds that the trial has been "tainted" by the appearance of bias on the part of Judge Arthur Engoron and his law.
"This appearance of bias threatens both Defendants' rights and the integrity of the judiciary as an institution," Trump's attorneys say in the filing. "As developed herein, in this case the evidence of apparent and actual bias is tangible and overwhelming."
"Specifically, the Court’s own conduct, coupled with the Principal Law Clerk, Allison Greenfield’s unprecedented role in the trial and extensive, public partisan activities, would cause even a casual observer to question the Court’s partiality," they write.
"Such evidence, coupled with an unprecedented departure from standard judicial procedure, has tainted these proceedings and a mistrial is warranted," the filing says.
Expert witness to resume testimony for defense
Donald Trump's lawyers are scheduled to resume their direct examination of expert witness Jason Flemmons this morning, continuing a line of questioning yesterday that largely placed responsibility for Trump's financial statements on Trump's external accountants.
Flemmons, who was qualified as an expert on accounting, explicitly criticized the testimony of Donald Bender, Trump's accountant at Mazars USA who was the New York attorney general's first witness, disputing Bender's claim that he would have wanted to see any appraisals that the Trump Organization conducted.
Flemmons also testified that Trump's financial statements should have sent a "buyer beware" signal to lenders due to the "highly cautionary language" in their disclaimer, which allowed Trump to make claims that significantly departed from generally accepted accounting principles.
To the extent that the statements and the Trump Organization's representations about the statements were inaccurate, Flemmons placed responsibility on Bender and his colleagues at Mazars, rather than the Trump Organization.
Expert calls Trump CPA's testimony 'not professionally plausible'
Expert witness Jason Flemmons cast doubt on the testimony of the Trump Organization's former external accountant Donald Bender, who said he would have wanted to review any appraisals that the Trump Organization conducted.
"That's not something that is required by professional standards," said Flemmons, testifying for the defense. "His testimony was not professionally plausible."
That prompted a strong objection from state attorney Kevin Wallace.
"Is he trying to say the witness is lying?" Wallace said.
"Not to put too fine a point on it," Judge Engoron quipped.
Asked to confirm what he meant by "professional plausible," Flemmons said it would be "highly unusual" for Bender to request appraisals outside what was mentioned in the statement of financial condition.
"Accountants in the industry do not go seeking records for things that are not in the four corners of the statement of financial condition," Flemmons said.
Court was subsequently adjourned for the day, with Flemmons scheduled to continue his testimony tomorrow.
Trump's disclaimer told bankers to 'beware,' expert says
Defense expert Jason Flemmons described the disclaimer included in Donald Trump's financial statement as the "highest level disclaimer" that could have been provided to bankers reviewing the document.
Flemmons said that the disclaimer, which he said includes "highly cautionary language," would allow a user to make claims that significantly departed from generally accepted accounting principles, known in the industry as GAAP.
"Was that language present in a substantially similar form in the compilation statements issued by Mazars for Donald Trump?" defense attorney Jesus Suarez asked.
"Yes," Flemmons said, adding that the disclaimer was "effectively saying 'user beware.'"
During his testimony and in statements to the media, Trump has claimed that the disclaimer shields him from liability in the case.
Suarez also used Flemmons' testimony to suggest that Trump's external accountants were responsible for understanding the methods used in the financial statement and determining their appropriateness.
That appeared to conflict with testimony of former Trump accountant Donald Bender of Mazars USA, who described his role as akin to plugging numbers provided by the Trump Organization into a template.
Weisselberg concedes Trump's triplex is smaller than valuation
Former Trump Organization CFO Allen Weisselberg testified that Trump's triplex apartment in Trump Tower is 10,996 square feet -- which is a third the size that Trump claimed on financial documents.
In October 1994, Trump signed a document that certified his penthouse triplex is 10,996 square feet, but his statements of financial condition for several years beginning in 2012 listed the apartment as 30,000 square feet.
An attorney with the New York attorney general's office showed the page with Trump's signature to Weisselberg, who appeared to struggle to explain the discrepancy.
"It was always in my mind a de minimis asset on the statement of financial condition," Weisselberg said. "I never even thought about the apartment."
Louis Solomon of the attorney general's office confronted Weisselberg with emails from Forbes magazine seeking clarity about the apartment's size, as well as a letter signed by Weisselberg certifying the 30,000 square foot figure to the Trump Organization's then-accountant, Mazars USA.
Weisselberg offered a lengthy take on the discrepancy, prompting Judge Arthur Engoron to intercede.
"Your role is to answer the questions, not to give speeches. Please just answer the questions," Engoron said.
"Forbes was right, the triplex was actually only 10,996, right?" Solomon asked.
"Right," Weisselberg finally conceded.
"I've been through quite a bit the last two years," Weisselberg said at one point during the morning's questioning. The former CFO moved to Florida following three months in jail after he pleaded guilty last year to criminal fraud charges and subsequently testified against the Trump Organization.