A New York judge handed Donald J. Trump a crushing defeat in a civil fraud case Friday, finding the former president liable for conspiring to manipulate his net worth and awarding him about $355 million in fines and assets. Ordered payment of interest which may be extinguished. The entire cash stockpile.
Judge Arthur F. Engoron's ruling ends a chaotic, years-long lawsuit in which New York's attorney general tried Mr. Trump's fanciful wealth claims. With no jury, power remained solely in the hands of Judge Engoron, who handed down a harsh sentence. The judge handed down far-reaching penalties that threaten the former president's business empire as he fights four criminal charges and seeks to take back the White House.
Judge Engoron barred Trump from holding executive positions at New York companies, including parts of his Trump Organization, for three years. He also suspended the former president's adult sons for two years and ordered them to pay more than $4 million each. One of them, Eric Trump, is the company's de facto chief executive, and the ruling casts doubt on whether anyone in the family can run the business in the short term.
The judge also ordered the payment of substantial interest and increased the former president's penalty to $450 million, according to Attorney General Letitia James.
In his unconventional style, Judge Engoron criticized Trump and the other defendants for years of denying wrongdoing. “Their lack of repentance and remorse is pathological,” he says.
He noted that Trump has not committed violent crimes and acknowledged that “Donald Trump is not Bernard Madoff.” Still, “defendants are unable to admit the error of their ways,” he wrote.
Trump plans to appeal the fine, but must come up with the funds or secure bail within 30 days. This judgment will not bankrupt him, as most of his wealth is in real estate, which in total is worth much more than the penalty.
Trump also plans to ask the appeals court to suspend restrictions on his and his sons' ability to run the company while the case is heard. Speaking at a press conference Friday night at his Mar-a-Lago home in Palm Beach, Florida, he attacked James and Judge Engoron as “corrupt.”
Alina Haba, one of Trump's lawyers, called the ruling a “plain and simple injustice” in a statement of her own. She added: “Given the significant risks, I believe the Appellate Division will reverse this damning decision.”
But there may be little Trump can do to prevent one of the justices' most significant punishments: a three-year extension of the appointment of an independent monitor to serve as the court's eyes and ears on the Trump Organization. Judge Engoron also strengthened the powers of watchdogs to monitor fraudulent or suspicious transactions.
Trump's lawyers slammed Monitor's Barbara Jones, saying her work had already cost the business more than $2.5 million. The decision to expand her oversight of privately held companies could infuriate the Trumps, who see her presence as an annoyance and an insult.
Mr. James had called for even harsher punishment, including permanently banning Mr. Trump from the New York business community. In the 2022 lawsuit that led to the trial, she accused Trump of inflating his net worth to get preferential treatment from banks and other lenders, attacking the core of the billionaire businessman's public persona. he accused.
Although the financiers made money from Mr. Trump, the alleged victims in the case, Ms. James argued, could have made more money had it not been for Mr. Trump's fraud.
The financial penalty reflects these lost profits, with nearly half of the $355 million, $168 million representing interest accumulated by Mr. Trump, and the remaining amount coming from two recent real estate sales. It represents the profits earned and is the money currently being collected by the judge. It was returned by Trump and a corporation he owns.
Before the trial began, Judge Engoron sided with the attorney general on the lawsuit's central allegations, ruling that the former president had used annual financial statements to defraud financiers. The judge's ruling Friday ratified nearly all of the other charges James brought against Trump, finding that the former president conspired with his top officials to violate multiple state laws.
For now, the judge's ruling marks a career-defining victory for James, a Democrat. She campaigned on the promise that Trump would take her to court, as her former president attacks her as a corrupt politician motivated only by her own self-interest. I was sitting calmly.
“This prolonged fraud was intentional, egregious and illegal,” James said at a press conference Friday night. “There can be no different rules for different people in this country, and a former president is no exception.” added.
His victory marks Trump's second major legal loss in the past two months, following a jury verdict in January in the defamation case of author E. Jean Carroll, who was accused of sexual abuse. . The jury fined him $83.3 million.
Friday's ruling comes as Manhattan prosecutors plan to file criminal charges against Trump late next month. He also faces 57 more felonies in his three other criminal cases.
But no legal issue appears to have weighed on Trump more than the fraud case. During the trial, he protested that premise, complaining that “this is persecution of people who have done good work in New York.”
Mr. Trump's lawyers said the fraud had no traditional victims and dared the attorney general to find one. And a Trump Organization spokesperson said in a statement Friday that the company has “never missed a loan payment or been delinquent on a loan,” adding that lenders “have conducted extensive research before entering into these transactions.” “We conducted due diligence.”
At trial, Mr. Trump's lawyers called as witnesses the president's former bankers, who testified that they were happy to have Mr. Trump as a client.
Eric Trump and his brother Donald Trump Jr. also testified, but their efforts to distance themselves from their father's financial statements did not sit well with the judge. Judge Engoron's decision to ban Trump from operating a business in New York for two years and Trump for three years is likely to displease the Trump family.
Before the trial, the fallout from the case appeared to threaten the very existence of the Trump Organization. When Judge Engoron first ruled that Trump had committed fraud, he ordered much of the former president's New York empire to be dismantled.
But legal experts have questioned the judge's ability to do so, and in Friday's ruling Judge Engoron recanted. Instead, the judge said “possible reorganization and dissolution” was up to Mr. Jones, the independent monitor.
The judge also gave Jones new powers as part of “enhanced oversight” and asked him to recommend an independent compliance officer to oversee the company's financial reporting from within the company.
The oversight and other penalties, including a three-year ban on Mr. Trump and his company from seeking loans from New York-registered banks, could hinder the company as it seeks to compete in the state's crowded real estate market. There is sex.
But nothing hurts more than a financial penalty. If the appeal is successful, it could wipe out the liquidity cushion that Trump built up during his post-presidential life: cash, stocks and bonds.
Mr. Trump claimed under oath last year that he had more than $400 million in cash, but Judge Engoron's $355 million penalty, interest owed by Mr. Trump and $83.3 million in payments to Ms. In the meantime, everything could be gone. If so, Mr. Trump may have to sell his own real estate or another asset to cover his payments.
The symbolism of punishment cannot be overlooked. Mr. Trump has been synonymous with the company he has run for decades, and by cutting him off from its management, the judge is writing an embarrassing epilogue to the story of the former president's career as a New York mogul. .
For now, Trump is turning his legal misfortunes into what he sees as political cash. He has used these incidents to falsely portray himself as a victim of President Biden's Democratic cabal and campaign in every courthouse he visits.
In Judge Engoron's courtroom, Mr. Trump delivered a rally-related rant from the witness stand, marking the climax of a month-long case that was alternately difficult and provocative. The former president attacked one of Ms. James' lawyers, saying, “You and just about every Democrat, district attorney, federal prosecutor, federal prosecutor, came after me from 15 different sides. I hate Trump.”
He showed no mercy for Mr. James himself or the judges, calling the attorney general a “political hack” and Judge Engoron “an extremely hostile judge.”
Trump then issued his final statement, calling James' fraud accusations “a fraud against me” and saying the attorney general “should pay me.”
He created drama even when he wasn't in the spotlight, rolling his eyes and muttering to his lawyers in the defense bench. He was particularly enraged by the testimony of former fixer Michael D. Cohen, who directly linked Mr. Trump to the fraud scheme.
Mr. Trump's lawyers were successful in swaying Mr. Cohen, asking Judge Engoron to throw out the case based on apparent inconsistencies in his testimony. When the judge refused, Trump suddenly stood up and stormed out of the courtroom.
The justices largely condoned Mr. Trump's actions, but early on they warned the former president of attacking staff members, including a law clerk who sat near the judge for discussions throughout the trial. Forbidden. Trump violated the order twice and was fined $15,000 by a judge.
Despite the courtroom drama, the evidence presented was often tedious, consisting of emails and spreadsheets from years ago. Through documentary evidence, James' lawyers have shown that Trump's company ignored appraisals and manipulated numbers to inflate the values of properties such as golf clubs and office buildings, sometimes to unreasonable heights. showed that.
The most blatant exaggeration was the listed size of Trump's triplex apartment in Trump Tower on Fifth Avenue. For years, the former president has valued the property as if it were 30,000 square feet when it is actually 10,996 square feet.
In his ruling, Judge Engoron faulted Trump and the other defendants, saying the misrepresentation of the size of the apartment was the only error they found.
Judge Engoron wrote that his purpose was not to “judge morality,” but only to find the facts and apply the law.
“The court intends to protect the integrity of financial markets and, by extension, the nation as a whole,” he wrote.
Judge Engoron added that Trump's failure to admit he made mistakes forces him to conclude that the former president will continue to cheat unless stopped.
William K. Rushbaum, Claire Fahey and Maggie Haberman Contributed to the report.
