UPDATED 5:21 P.M.
NEW YORK (Reuters) -Donald Trump must pay $354.9 million in penalties for fraudulently overstating his net worth to dupe lenders, a New York judge ruled on Friday, handing the former U.S. president another legal setback in a civil case that imperils his real estate empire.
Justice Arthur Engoron, in a sharply worded decision issued after a contentious three-month trial in Manhattan, also banned Trump, who is running to regain the presidency this year, from serving as an officer or director of any New York corporation for three years. Trump’s lawyer Alina Habba vowed to appeal.
Engoron canceled his prior ruling from September ordering the “dissolution” of companies that control pillars of Trump’s real estate empire, saying on Friday 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, Engoron wrote in the ruling, “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 brought by New York Attorney General Letitia James accused Trump and his family businesses of overstating his net worth by as much $3.6 billion a year over a decade to fool bankers into giving him better loan terms. Trump, who faces criminal charges in four other cases, has called the lawsuit a political vendetta by James, a Democrat.
In posts on his social media platform, Trump called Engoron “crooked,” 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.”
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 U.S. 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 Organization 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, also were defendants in the case. The judge ordered them to pay $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 Organization CFO Allen Weisselberg, who pleaded guilty to tax fraud in a separate criminal case, was ordered to pay $1 million and barred for life from managing any New York company’s finances.
James said the penalties paid by all defendants totaled more than $450 million, including interest.
“Donald Trump is finally facing accountability for his lying, cheating and staggering fraud,” James said in a statement. “Because no matter how big, rich or powerful you think you are, no one is above the law.”
PRESIDENTIAL RACE
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 in the race for the Republican nomination to challenge Democratic President Joe Biden in the Nov. 5 U.S. election.
During defiant and meandering trial testimony in November, Trump conceded that some of his property values were inaccurate but insisted banks were obligated to do their own due diligence.
Engoron criticized Trump for his behavior during his testimony – and wrote that the testimony hurt his cause.
“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 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 $2.6 billion. Trump testified in a deposition last year that he had roughly $400 million in cash.
Trump’s stake in the parent of his social media app Truth Social is worth about $4 billion, based on how the shares of a black-check 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. U.S. financial regulators greenlighted the deal this week.
While Trump could also sell of 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 last month found that Trump must pay writer E. Jean Carroll $83.3 million for defaming her by denying her claim that he raped her decades earlier. Trump has vowed to appeal. Another jury last year ordered Trump to pay Carroll $5 million in a separate case.
CRIMINAL CASES
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 Thursday 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 James while proclaiming his innocence. “You have your own agenda,” Trump scolded Engoron, who told Trump’s lawyer “control your client.” The judge during the trial fined Trump $15,000 for twice violating a gag order against disparaging court staff.
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.
(Reporting by Jack Queen and Luc Cohen; Additional reporting by Jonathan Stempel and Greg Roumeliotis; Editing by Will Dunham, Noeleen Walder and Alistair Bell)
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(Reuters) – Donald Trump must pay $354.9 million in penalties for fraudulently overstating his net worth to dupe lenders, a New York judge ruled on Friday, handing the former U.S. president another legal setback in a civil case that imperils his real estate empire.
Justice Arthur Engoron also banned Trump from serving as an officer or director of any New York corporation for three years.
The lawsuit brought by New York Attorney General Letitia James accused Trump and his family businesses of overstating his net worth by as much $3.6 billion a year over a decade to fool bankers into giving him better loan terms.
Trump has denied wrongdoing and called the case a political vendetta by James, an elected Democrat. Trump is expected to appeal Friday’s ruling by Engoron.
The civil fraud case could deal a major blow to Trump’s real estate empire as the businessman turned politician leads the race for the Republican nomination to challenge Democratic President Joe Biden in the Nov. 5 U.S. election.
Engoron ruled in September that Trump had engaged in fraud and ordered his business empire be partially dissolved. The full implications of that order are still unclear, and Trump is appealing.
Friday’s ruling came after a contentious three-month trial in Manhattan.
During defiant and meandering testimony in November, Trump conceded that some of his property values were inaccurate but insisted banks were obligated to do their own due diligence.
He used his occasional court appearances as impromptu campaign stops, delivering incendiary remarks to reporters and insisting his enemies are using the courts to prevent him from retaking the White House.
Trump is cruising to the Republican nomination despite a host of other legal troubles.
He is under indictment in four criminal cases, including one in New York related to hush money payments he made to a porn star ahead of the 2016 election. The judge overseeing that case on Thursday set a March 25 trial date over the objections of Trump’s lawyers, who sought to delay it due to Trump’s crowded legal and political schedule.
Trump has also been charged in Florida for his handling of classified documents upon leaving office and in Washington and in Georgia for his efforts to overturn his 2020 election loss.
Trump has pleaded not guilty in all four cases.
During the New York civil case, Trump lashed out in the courtroom on Jan. 11 against both the judge and James while proclaiming his innocence. “You have your own agenda,” Trump scolded Engoron, who told Trump’s lawyer “control your client.” The judge during the trial had fined Trump $15,000 for twice violating a gag order against disparaging court staff.
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. James sought $370 million in penalties and a New York commercial real estate ban on Trump and his two adult sons, Donald Jr. and Eric Trump.
The trial featured some dramatic testimony. Trump during a defiant appearance on the witness stand boasted about his business acumen and accused James and Engoron of partisanship. Trump’s former lawyer and “fixer” Michael Cohen testified for the state.
Cohen testified that he manipulated the values of Trump’s real estate properties to match “whatever number Mr. Trump told us.” Trump afterward called Cohen a “disgraceful fellow.” His lawyers grilled Cohen on his criminal record and accused him of lying to boost his book sales and podcast traffic.
Donald Jr., Eric and Trump’s daughter Ivanka Trump also testified. They said they had little to no involvement in their father’s financial statements while running the Trump Organization, an umbrella company for Trump’s many business ventures. Unlike her brothers, Ivanka Trump was not a defendant.
(Reporting by Jack Queen; Editing by Noeleen Walder, Will Dunham and Alistair Bell)
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