Trump to pay $478m and is barred from NY business for three years, judge in fraud case rules
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Trump was accused of overstating his net worth by as much US$3.6 billion a year over a decade to fool bankers into giving him better loan terms.
PHOTO: REUTERS
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NEW YORK - Donald Trump must pay US$354.9 million (S$478 million) in penalties for fraudulently overstating his net worth to dupe lenders, a New York judge ruled on Feb 16, handing the former US president another legal setback
Justice Arthur Engoron also banned Trump from serving as an officer or director of any New York corporation for three years.
Justice Engoron cancelled his prior ruling from September ordering the “dissolution” of companies that control pillars of Trump’s real estate empire, saying on Feb 16 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, Justice Engoron wrote in the ruling, “are incapable of admitting the error of their ways”.
“Their complete lack of contrition and remorse borders on pathological,” he 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
In posts on his social media platform, Trump called Justice Engoron “crooked”, Ms 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.”
Justice 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. 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 were also defendants in the case. The judge ordered them to pay US$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 chief financial officer Allen Weisselberg, who pleaded guilty to tax fraud in a separate criminal case, was ordered to pay US$1 million and barred for life from managing any New York company’s finances.
Ms James said the penalties paid by all defendants totalled more than US$450 million, including interest.
“Donald Trump is finally facing accountability for his lying, cheating and staggering fraud,” Ms James said in a statement. “Because no matter 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
“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 after Justice 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 US$2.6 billion. Trump testified in a deposition in 2023 that he had roughly US$400 million in cash.
Trump’s stake in the parent of his social media app Truth Social is worth about US$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 after the merger is completed, according to a regulatory filing. US financial regulators greenlighted the deal this week.
While Trump could also sell off parts of his real estate portfolio to satisfy the judgment, it is unclear how much his holdings are worth, and selling them could take time.
Trump will not be able to use campaign funds to pay the judgment because the case was not related to his campaign or his conduct as a president or political candidate, according to some legal experts.
In another civil case, a jury in January found that Trump must pay writer E. Jean Carroll US$83.3 million for defaming her by denying her claim that he raped her decades earlier. Trump has vowed to appeal. Another jury in 2023 ordered Trump to pay Ms Carroll US$5 million in a separate case.
Trump is under indictment in four criminal cases, including one in New York related to hush money paid to a porn star.
The judge overseeing that case on Feb 15 set a March 25 trial date. Trump has also been charged in Florida for his handling of classified documents after leaving office, and in Washington and in Georgia for his efforts to overturn his 2020 election loss. Trump has pleaded not guilty in those cases.
During the civil fraud case, Trump lashed out in the courtroom on Jan 11 – the day of closing arguments – against the judge and Ms James while proclaiming his innocence.
“You have your own agenda,” Trump scolded Justice Engoron, who told Trump’s lawyer to “control your client”. The judge during the trial fined Trump $15,000 for twice violating a gag order against disparaging court staff.
Justice Engoron ruled in September that Trump’s financial statements were fraudulent, leaving the focus of the trial on how much Trump should pay in penalties. REUTERS
