Judge orders Trump and his companies to pay $355 million in New York civil fraud case

A New York judge on Friday ordered Donald J. Trump and others to pay more than $355 million in fines and interest for inflating the value of his companies to secure favorable bank loans in a civil fraud case brought by New York State Attorney General Letitia James.

The former president cannot head a company in New York for three years. His sons Donald Trump Jr. and Eric Trump, who controlled his businesses while he was in office, are barred from running a business in New York for two years, Justice Arthur Engoron also ruled.

“In order to borrow more and at lower rates, defendants submitted blatantly false financial data to the accountants, resulting in fraudulent financial statements,” the judge wrote in his decision. “When confronted at trial with the statements, defendants’ fact and expert witnesses simply denied reality, and defendants failed to accept responsibility or to impose internal controls to prevent future recurrences.”

The judge suspended the state business licenses for all the office buildings, hotels and golf courses that fall under the Trump Organization umbrella and established an independent monitor and an independent director of compliance to oversee all remaining activity that could lead to further financial fraud. He stopped short of dissolving the business.

Former Trump Organization chief financial officer Allen Weisselberg and controller Jerry McConney are permanently barred from serving in similar roles for any company.

The Trump sons were also fined $4 million each. Weisselberg must pay an additional $1 million penalty.

James, who vowed to investigate Trump even before she was elected, brought the civil case in 2002 under a law that allows her office to cancel businesses in the state that repeatedly traffic in fraud.

James accused the Trump businesses of falsifying business records by inflating the value of his companies to secure more favorable loan rates from banks. The attorney general also accused the former president’s business group of trying to cover up the fraud and inflating his companies’ worth by as much as $3.6 billion one year. 

In two well publicized examples presented at trial, the former president exaggerated the size of his Fifth Avenue Trump Tower penthouse by nearly 40,000 square feet and pumped up the value of his Palm Beach home at Mar-a-Lago by “at least 2,300%, compared to the assessor’s appraisal,” Engoron found.

“For years, Donald Trump engaged in deceptive business practices and tremendous fraud. Donald Trump falsely, knowingly inflated his net worth by billions of dollars to unjustly enrich himself, his family and to cheat the system. Donald Trump may have authored 'The Art of the Deal,' but he perfected the art of the steal,” James said after the ruling. “Now, Donald Trump is finally facing accountability for his lying, cheating and staggering fraud. Because no matter how big, rich, or powerful you think you are, no one is above the law.”

Lawyers for the former president pointed out that none of the banks that lent to his businesses lost money.

“There was no victim. There was no anything,” Trump testified during the trial.

But Engoron didn’t buy the argument.

“Timely and total repayment of loans does not extinguish the harm that false statements inflict on the marketplace,” Engoron wrote. “Indeed, the common excuse that 'everybody does it' is all the more reason to strive for honesty and transparency and to be vigilant in enforcing the rules.”

Trump's lawyers immediately vowed to appeal the decision.

“This verdict is a manifest injustice — plain and simple,” Trump lawyer Alina Habba said. “It is the culmination of a multiyear, politically fueled witch hunt that was designed to 'take down Donald Trump,' before Letitia James ever stepped foot into the attorney general’s office.”

After the ruling, Trump continued to defend his business practices. “The banks all got their money, a hundred percent. They love Trump,” he said. “There were no victims, because the banks made a lot of money. They made $100 million.”

The contentious 11-week trial featured threats against the judge, accusations of political cronyism against his staff and testimony by Trump that sometimes took on the appearance of campaign speeches.

“What’s happening here, sir, is a fraud on me,” Trump said. He repeatedly blasted the attorney general and said the case was politically motivated by people who “want to make sure I don’t win again.”

The judge issued a gag order in 2023 prohibiting Trump from making derogatory comments about  the judge's clerk after Trump posted a photo of her with Senate Majority Leader Chuck Schumer on social media.

On the last day of the trial, Nassau County police responded to the judge’s home in Kensington for a bomb threat that turned out to be a hoax.

James campaigned on a platform of holding Trump accountable.

In 2018, when she was still New York City public advocate, she vowed to investigate then-President Trump.

“We're going to continue to look at his business transactions and his holdings here in the state of New York,” she told NY1.

Trump remains the Republican front-runner in the 2024 campaign for president, but he faces  other legal hurdles and a busy political season.

The much anticipated decision came the day after a trial date was set in Manhattan Supreme Court for a jury to hear evidence against the former president on criminal charges that he falsified business records to hide hush-money payments involving extramarital affairs. Trump faces three other criminal cases, charging the mishandling of classified documents and an attempt to undermine the 2020 presidential election.

This is the second multimillion dollar ruling against Trump in as many months.

A Manhattan federal court jury ordered him to pay $83 million for the continued defamation of advice columnist E. Jean Carroll for his repeated denials that he sexually assaulted her in a department store changing room after a previous jury found him liable.