New Delhi: Donald Trump has been ordered by a New York judge to pay $354.9 million in penalties for fraudulently inflating his net worth to deceive lenders.
The ruling, issued by Justice Arthur Engoron after a contentious three-month trial, represents a legal setback for the former U.S. president in a civil case that poses a threat to his real estate empire.
Engoron also imposed a three-year ban on Trump serving as an officer or director of any New York corporation. Trump’s lawyer, Alina Habba, has pledged to appeal the decision.
Following a sharply worded decision in Manhattan, Engoron, who initially ordered the “dissolution” of companies controlling Trump’s real estate empire in September, revised his stance. He declared on Friday that dissolution was no longer necessary, opting instead to appoint an independent monitor and compliance director to oversee Trump’s businesses.
In the ruling, Engoron stated that Trump and the other defendants in the case “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, filed by New York Attorney General Letitia James, alleges that Trump and his family businesses exaggerated his net worth by up to $3.6 billion annually for a decade, misleading banks to secure better loan terms. Trump, currently facing criminal charges in four other cases, dismisses the lawsuit as a Democratic-driven political vendetta by James.
In response to the case, Trump took to social media, branding Justice Arthur Engoron as “crooked,” accusing Letitia James of being “corrupt,” and framing the legal proceedings against him as “ELECTION INTERFERENCE” and a “WITCH HUNT.” He criticized the judge’s decision as a “Complete and Total SHAM,” asserting the need to oppose what he sees as injustice.
Justice Engoron, who reached the decision without a jury, not only imposed a three-year ban on Trump and his implicated companies from seeking loans from New York-chartered financial institutions but also emphasized the significance of past legal issues involving Trump’s companies in determining the severe penalties.
Trump’s adult sons, Don Jr. and Eric, both defendants, were ordered to pay $4 million each. Their lawyer, Clifford Robert, denounced the decision as a “gross injustice” and expressed confidence in its overturning upon appeal. Former Trump Organization CFO Allen Weisselberg, who pleaded guilty to tax fraud in a separate case, faces a $1 million penalty and a lifetime ban from managing any New York company’s finances.
Letitia James stated that the combined penalties for all defendants exceed $450 million, including interest. She emphasized the accountability that Trump and others face for alleged deception, labeling it as “lying, cheating, and staggering fraud.” The judge’s decision has the potential to impact Trump’s real estate business significantly, even as he leads in the Republican nomination race for the upcoming U.S. election against Democratic President Joe Biden.
In his November trial testimony characterized by defiance and digressions, Trump admitted to inaccuracies in some property values but argued that banks were responsible for their own due diligence. Judge Engoron criticized Trump’s conduct during the testimony, stating that his evasive responses and lengthy, unrelated speeches significantly undermined his credibility.
The judge’s written remarks highlighted that “Donald Trump rarely responded to the questions asked” and often went off-topic, affecting the strength of his case. Engoron emphasized that Trump’s refusal to answer directly or at all compromised his credibility.
During a potential appeal, Trump might be required to deposit his share of the full judgment plus interest. Alternatively, he could post a smaller amount with collateral and interest through an appeal bond. However, finding a willing lender could be challenging given the judge’s findings that Trump misled banks about his wealth.
Trump’s current access to cash remains unclear, with estimates of his net worth varying. Forbes values it at $2.6 billion, while Trump stated in a deposition last year that he had around $400 million in cash. His stake in Truth Social’s parent company is estimated at $4 billion, and he will be permitted to sell shares six months after the completion of the merger, approved by U.S. financial regulators.
While Trump could potentially sell parts of his real estate portfolio to satisfy the judgment, the value of his holdings is uncertain, and the selling process may take time. Notably, campaign funds cannot be used to pay the judgment since the case is unrelated to his campaign or conduct as a president or political candidate, according to legal experts.
In another civil case, a jury recently ordered Trump to pay $83.3 million to writer E. Jean Carroll for defaming her by denying her rape allegation. Trump has expressed intentions to appeal, and a separate jury last year mandated a $5 million payment to Carroll in a different case.
CRIMINAL CASES
Donald Trump is facing indictment in four criminal cases, including one in New York connected to hush money paid to a porn star. The judge presiding over that case recently set a trial date for March 25. Trump also faces charges in Florida related to the handling of classified documents post-presidency and in Washington and Georgia for his attempts to overturn the 2020 election loss. Trump has entered a plea of not guilty in all these cases.
Amidst the civil fraud case, on January 11, the day of closing arguments, Trump criticized the judge and Attorney General Letitia James in the courtroom, asserting his innocence. Trump scolded Judge Engoron, accusing him of having a personal agenda. Engoron responded by instructing Trump’s lawyer to control his client. During the trial, Trump was fined $15,000 by the judge for twice violating a gag order that prohibited disparaging court staff.
In a ruling from September, Engoron declared Trump’s financial statements as fraudulent, shifting the trial’s focus to determining the extent of penalties Trump should pay.