by A New York judge handed Donald J. Trump a crushing defeat in his civil fraud case on Friday, finding the former president responsible for conspiring to manipulate his net worth and ordering him to pay a fine of nearly $355 million plus interest that could wipe out your entire cash reserve.
Judge Arthur F. Engoron’s decision caps a chaotic, years-long case in which New York’s attorney general took Trump’s fantastic wealth claims to trial. Without a jury, the power was solely in the hands of Judge Engoron, and it was harsh: The judge imposed a wide range of punishments that threaten the former president’s business empire as he simultaneously faces four criminal trials and seeks to reclaim the White House.
Judge Engoron banned Trump for three years from holding senior positions at any New York company, including parts of his own Trump Organization. He also imposed a two-year ban on the former president’s adult children and ordered them to pay more than $4 million each. One of them, Eric Trump, is the company’s de facto CEO, and the ruling casts doubt on whether any family member will be able to run the business anytime soon.
The judge also ordered them to pay substantial interest, raising 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 refusing to admit wrongdoing for years. “His complete lack of repentance and remorse borders on the pathological,” he said.
He noted that Trump had committed no violent crimes and also admitted that “Donald Trump is not Bernard Madoff.” Still, he wrote, “the defendants are unable to admit the error of their ways.”
Trump will appeal the financial sanction, but will have to provide the money or obtain bail within 30 days. The ruling will not leave him bankrupt, because most of his wealth is in real estate, which together is worth much more than the fine.
Trump will also ask an appeals court to end restrictions on him and his children running the company while it considers the case. At a news conference from his Palm Beach, Florida, home, Mar-a-Lago, on Friday night, he attacked Ms. James and Judge Engoron, calling them both “corrupt.”
Alina Habba, one of Trump’s lawyers, described the ruling in her own statement as “a manifest injustice, plain and simple.” She added that “given the seriousness of the stakes, we are confident that the Appellate Division will overturn this egregious verdict.”
But there may be little Trump can do to thwart one of the judge’s most important punishments: extending by three years the appointment of an independent monitor to be the court’s eyes and ears at the Trump Organization. Judge Engoron also strengthened the monitor’s authority to monitor fraud and question transactions that appear suspicious.
Trump’s lawyers have criticized the monitor, Barbara Jones, saying her work had already cost the company more than $2.5 million; The decision to expand her oversight of the private company could infuriate the Trumps, who see her presence as irritating and an insult.
James had called for an even harsher penalty, calling for Trump to be permanently banned from New York’s business world. In the 2022 lawsuit that precipitated the trial, he accused Trump of inflating his net worth to obtain favorable treatment from banks and other lenders, attacking the foundation of his public persona as a billionaire businessman.
Although the lenders made money under Trump, they were the alleged victims in the case, and James argued that without their fraud, they could have made even more.
The financial penalty reflects that loss of earnings: Almost half of the $355 million ($168 million) represents the interest Trump saved, and the remaining sum represents his profits from the recent sale of two properties, money that the judge has now claimed. of Mr. Trump and the corporate entities he owns.
Before the trial began, Judge Engoron ruled that the former president had used his annual financial statements to defraud lenders, siding with the attorney general on the central claim of his case. The judge’s ruling on Friday upheld nearly all of the other accusations James had leveled against Trump, finding that the former president had conspired with his top executives to violate several state laws.
The judge’s decision for now gives Ms. James, a Democrat, a victory that will define her career. She campaigned for office promising to bring Trump to justice and sat calmly in the courtroom as the former president attacked her, calling her a corrupt politician motivated solely by her own self-interest.
“This long-standing fraud was intentional, egregious and illegal,” James said during a news conference Friday night, adding that “there can’t be different rules for different people in this country, and former presidents are not a exception”.
His victory is Trump’s second major defeat in court in two months, following a jury verdict in January in a defamation case brought by E. Jean Carroll, a writer who was found responsible for sexual abuse. The jury fined him $83.3 million.
Friday’s ruling comes as Manhattan prosecutors are set to try Trump on criminal charges later next month. He also faces 57 more felony charges in three other criminal cases.
But none of his legal problems appear to have distressed Trump as much as the fraud case. During the trial, he protested his premise, claiming: “This has been a persecution of someone who has done good work in New York.”
Trump’s lawyers argued that the fraud did not have a victim in the traditional sense, challenging the attorney general to find anyone who was harmed. And in a statement on Friday, a spokeswoman for the Trump Organization noted that the company had “never defaulted on any loan payments or defaulted on any loans” and that the lenders “conducted extensive due diligence before entering into these transactions.”
At the trial, Trump’s lawyers called as witnesses the president’s former bankers, who testified that they had been delighted to have 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 failed before the judge. Judge Engoron’s decision to ban them from running any business in New York for two years (and Trump for three) will likely strike a chord with 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 the dissolution of much of the former president’s New York empire.
But legal experts had questioned the judge’s ability to do that, and in his ruling Friday, Judge Engoron reversed himself. Instead, the judge said any “restructuring and possible dissolution” would be up to Ms. Jones, the independent monitor.
The judge also gave Ms. Jones new authority as part of “enhanced oversight” and asked her to recommend an independent chief compliance officer who will oversee the company’s financial reporting from within its ranks.
The oversight and other sanctions, including a three-year ban on Trump and his company from borrowing from banks registered in New York, could cripple the company as it tries to compete in the state’s crowded real estate market.
However, nothing will hurt as much as the financial penalty. If upheld on appeal, it could erase the liquidity cushion (cash, stocks and bonds) that Trump built in his post-presidential life.
Trump claimed under oath last year that he had more than $400 million in cash, but between Judge Engoron’s $355 million punishment, the interest Trump owes, and the $83.3 million payment to Carroll, all That could have disappeared. If so, Trump might have to sell one of his properties or another asset to cover the payments.
The symbolism of punishments cannot be overlooked either. Trump is synonymous with the company he ran for decades, and by separating it from his operations, the judge has written an embarrassing epilogue to the former president’s story about his career as a New York mogul.
For now, Trump has turned his legal misfortunes into what he considers political gold. He has used the cases to falsely portray himself as a victim of a Democratic cabal led by President Biden, and has campaigned in every court he has visited.
In Judge Engoron’s courtroom, Trump delivered a tirade from the witness stand, marking the climax of a months-long trial that was alternately stultifying and brilliant. The former president attacked one of Ms. James’ lawyers, saying: “You and all the other Democrats, district attorneys, attorneys general and US attorneys were after me from 15 different sides. “All the Democrats, all the Trump haters.”
He did not forgive Ms. James herself or the judge, calling the attorney general a “political trick” and Judge Engoron an “extremely hostile judge.”
Trump later gave his own final speech, calling James’ fraud allegation a “fraud on me” and saying the attorney general was the one who “should be paying me.”
He generated drama even when he wasn’t in the spotlight, rolling his eyes at the defense table and muttering at his attorneys. He was particularly infuriated by the testimony of his former fixer, Michael D. Cohen, who linked Trump directly to the fraud scheme.
Trump’s lawyers managed to unsettle Cohen and asked, based on apparent contradictions in his testimony, that Judge Engoron dismiss the case. When the judge refused, Trump abruptly stood up and stormed out of the courtroom.
The judge largely tolerated Trump’s behavior, but from the beginning prohibited the former president from attacking members of his staff, especially his law clerk, who sat near the judge throughout the trial so they could talk. Trump violated that order twice, prompting the judge to fine him $15,000.
Despite the courtroom theatrics, the evidence presented was often tedious, consisting of years-old emails and spreadsheets. Through that documentary evidence, James’ lawyers showed that Trump’s company had ignored appraisals and manipulated numbers to inflate the value of properties like golf clubs and office buildings, sometimes to absurd heights.
The most egregious exaggeration was the stated size of Trump’s triplex apartment in Trump Tower on Fifth Avenue. For years, the former president had valued it as if it were 30,000 square feet, when in reality it was 10,996.
In his ruling, Judge Engoron sharply criticized Trump and the other defendants, saying that misstating the size of the apartment was the only mistake they would admit.
Judge Engoron wrote that his goal was not to “judge morality,” but only to find facts and apply the law.
“The court intends to protect the integrity of the financial market and therefore the public as a whole,” he wrote.
Judge Engoron added that Trump’s refusal to admit error left him no choice but to conclude that the former president would continue to commit fraud unless he was stopped.
William K. Rashbaum, claire fahy and Maggie Haberman contributed reports.
