Trump slapped with $354.9m fine, three-year ban in NY fraud case
NEW YORK: Donald Trump must pay $354.9 million in penalties for fraudulently overstating his net worth to dupe lenders, a New York judge ruled on Friday, handing the former US president another legal setback in a civil case that imperils his real estate empire.
Justice Arthur Engoron, in a sharply worded decision issued ater a contentious three-month trial in Manhatan, also banned Trump, who is running to regain the presidency this year, from serving as an officer or director of any New York corporation for three years. Trump’s lawyer Alina Habba vowed to appeal.
Engoron, who decided the case without a jury, also barred Trump and his companies named in the suit from applying for loans from any financial institution chartered in New York for three years, which could curtail his ability to obtain credit from major US banks.
The judge said Trump and his companies’ past run-ins with the law were part of the reason for the stiff penalties.
Engoron cancelled his prior ruling from September ordering the “dissolution” of companies that control pillars of Trump’s real estate empire, saying on Friday that this was no longer necessary because he is appointing an independent monitor and compliance director to oversee Trump’s businesses.
Trump and the other defendants in the case, Engoron wrote in the ruling, “are incapable of admitting the error of their ways.”
“Their complete lack of contrition and remorse borders on pathological,” Engoron wrote.
“Instead, they adopt a ‘See no evil, hear no evil, speak no evil’ posture that the evidence belies.”
The lawsuit brought by New York Attorney General Letitia James accused Trump and his family businesses of overstating his net worth by as much $3.6 billion a year over a decade to fool bankers into giving him beter loan terms.
Trump, who faces criminal charges in four other cases, has called the lawsuit a political vendeta by James, a Democrat.
In posts on his social media plaform, Trump called Engoron “crooked,” James “corrupt,” and the case against him “ELECTION INTERFERENCE” and a “WITCH HUNT.”
“This ‘decision’ is a Complete and Total SHAM,” Trump wrote.
“We cannot let injustice stand.”
The Trump Organisation was found guilty of criminal tax fraud in 2022. Two other entities Trump ran previously settled allegations of wrongdoing brought by New York state.
Trump’s adult sons, Don Jr. and Eric, also were defendants in the case. The judge ordered them to pay $4 million apiece.
Their lawyer Clifford Robert called the decision a “gross injustice” and said he believes it will be overturned on appeal.
Former Trump Organisation CFO Allen Weisselberg, who pleaded guilty to tax fraud in a separate criminal case, was ordered to pay $1 million and barred for life from managing any New York company’s finances.
James said the penalties paid by all defendants totaled more than $450 million, including interest.
“Donald Trump is finally facing accountability for his lying, cheating and staggering fraud,” James said in a statement.
“Because no mater how big, rich or powerful you think you are, no one is above the law.”
The judge’s decision could deal a major blow to Trump’s real estate empire even as the businessman-turned-politician leads by a wide margin in the race for the Republican nomination to challenge Democratic President Joe Biden in the Nov.5 US election.
During defiant and meandering trial testimony in November, Trump conceded that some of his property values were inaccurate but insisted banks were obligated to do their own due diligence.
Engoron criticised Trump for his behavior during his testimony - and wrote that the testimony hurt his cause.
“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.”
Trump could be required to deposit his portion of the full judgment plus interest during an appeal.
Trump could also post a smaller amount with collateral and interest by securing a type of loan called an appeal bond. But he may have trouble finding a willing lender ater Engoron found he lied to banks about his wealth.
It is unclear how much access to cash Trump has, and estimates of his fortune vary, with Forbes pegging his net worth at $2.6 billion. Trump testified in a deposition last year that he had roughly $400 million in cash.
Trump’s stake in the parent of his social media app Truth Social is worth about $4 billion, based on how the shares of a blank-cheque acquisition vehicle with which it has agreed to merge trade.
Trump will be allowed to sell shares in the combined company six months ater the merger is completed, according to a regulatory filing. US financial regulators green lighted the deal this week.