Trump won’t have to pay out the money now as an appeals process will have to play out, but the verdict still is a stunning setback for the former president.
If he is ultimately forced to pay, the size of the penalty on top of earlier judgments would dramatically diminish his financial resources. And the ruling undermines the image of a successful businessman that the Republican has carefully tailored to power his unlikely rise from a reality television star to a onetime — and perhaps future — president.
Judge Arthur Engoron concluded that Trump and his company were “likely to continue their fraudulent ways” without the financial penalties and other controls he imposed. Engoron said that Trump and his co-defendants had “failed to accept responsibility” and that experts who testified on his behalf had “simply denied reality.”
“This is a venial sin, not a mortal sin,” Engoron wrote in a searing 92-page opinion. “They did not rob a bank at gunpoint. Donald Trump is not Bernard Madoff. Yet, [the] defendants are incapable of admitting the error of their ways.”
He said that their “complete lack of contrition and remorse borders on pathological” and that “the frauds found here leap off the page and shock the conscience.”
The judge has also barred Trump, who first built his reputation as a real estate titan, from serving as an officer or director of any New York corporation for three years or from getting a loan from banks registered in his native state.
His eldest sons, Trump Organization Executive Vice Presidents Donald Trump Jr. and Eric Trump, were ordered to pay $4 million each and were barred from being officers of New York companies for two years. Former company Chief Financial Officer Allen Weisselberg was ordered to pay $1 million.
Trump called the verdict a “Complete and Total sham.” He wrote on his Truth Social platform that New York Atty. Gen. Letitia James, a Democrat, had “been obsessed with ’Getting Trump’ for years.”
Engoron’s decision was “an illegal, unAmerican judgment against me, my family, and my tremendous business,” he added.
The financial penalty against Trump and his co-defendants of $364 million total — which James’ office said would grow to $450 million with interest — will allow the Trump Organization to remain in business. The judge backed away from an earlier ruling that would have dissolved the former president’s companies. But if upheld, the verdict will force a shakeup at the top of the company.
In a statement, James said that “justice has been served,” and called the ruling “a tremendous victory for this state, this nation, and for everyone who believes that we all must play by the same rules — even former presidents.”
“Now, Donald Trump is finally facing accountability for his lying, cheating, and staggering fraud,” she said. “Because no matter how big, rich, or powerful you think you are, no one is above the law.”
(Bloomberg via Getty Images)
Trump’s lawyers vowed to appeal. Attorney Alina Habba posted on social media that the verdict amounted to “manifest injustice” and “the culmination of a multi-year, politically fueled witch hunt.”
Fellow Trump lawyer Christopher Kise called the outcome “a draconian and unconstitutional fine and a corporate ‘death penalty’” for Trump, his family and his business.
The judge issued his decision after a 2½-month trial that saw the Republican presidential front-runner bristling under oath and claiming that he was the victim of a rigged legal system.
The stiff penalty was a victory for James, who had sued Trump over what she said was not just harmless bragging but years of deceptive practices as he built the multinational collection of skyscrapers, golf courses and other properties that catapulted him to fame and the White House.
James sued Trump in 2022 under a state law that authorizes her to investigate persistent fraud in business dealings.
The lawsuit accused Trump and his co-defendants of routinely puffing up his financial statements to create the illusion that his properties were more valuable than they really were. Lawyers for the state said Trump exaggerated his wealth by as much as $3.6 billion one year.
By making himself seem richer, Trump qualified for better loan terms, saved on interest and was able to complete projects he might otherwise not have finished, state lawyers said.
Even before the trial began, Engoron ruled that James had already proved Trump’s financial statements were fraudulent. The judge ordered some of Trump’s companies removed from his control and dissolved, but an appeals court put that decision on hold.
In his earlier ruling, the judge found that, among other tactics, Trump’s financial statements had wrongly claimed that his Trump Tower penthouse was nearly three times its actual size and had overvalued his Mar-a-Lago estate in Palm Beach, Fla., based on the idea that the property could be developed for residential use, even though he had surrendered rights to develop it for any uses but a club.
Trump, one of 40 witnesses to testify at the trial, said his financial statements actually understated his net worth and that banks did their own research and were happy with his business.
“There was no victim. There was no anything,” he testified in November.
During the trial, Trump called the judge “extremely hostile” and the attorney general “a political hack.” In a six-minute courtroom diatribe during closing arguments in January, Trump said, “I am an innocent man,” calling the case a “fraud on me.”
Trump and his lawyers have said that the outside accountants who helped prepare his financial statements should’ve flagged any discrepancies, and that the documents came with disclaimers that shielded him from liability. The defense also argued that some of the allegations were barred by the statute of limitations.
The suit is one of many legal challenges for Trump as he campaigns for a return to the White House. He has been indicted four times in the last year — accused in Georgia and Washington, D.C., of plotting to overturn his 2020 election loss to Democrat Joe Biden; in Florida of illegally keeping classified federal documents; and in New York of falsifying business records related to hush money paid to porn actor Stormy Daniels on his behalf.
On Thursday, a New York judge confirmed that Trump’s hush-money trial will start March 25; and a judge in Atlanta heard arguments on whether to remove Fulton County Dist. Atty. Fani Willis from his Georgia election interference case due to her personal relationship with a special prosecutor she’d hired for the case.
Those criminal accusations haven’t appeared to undermine Trump’s march toward the Republican presidential nomination, but civil litigation has threatened him financially.
On Jan. 26, a jury ordered him to pay $83.3 million to writer E. Jean Carroll for defaming her after he was found liable for sexually assaulting her in a Manhattan department store in the 1990s. That’s on top of the $5 million a jury awarded Carroll in a related trial last year.
In 2022, the Trump Organization was convicted of tax fraud and fined $1.6 million in an unrelated criminal case for helping executives dodge taxes on extravagant perks such as Manhattan apartments and luxury cars.
In the current case, James had asked the judge to impose a penalty of at least $370 million.
Engoron decided the case because state law doesn’t allow for juries for this type of lawsuit.
Because the case was civil, not criminal, it did not carry the potential of prison time.
James, who campaigned for office as a Trump critic and watchdog, started scrutinizing his business practices in March 2019 after his former personal lawyer Michael Cohen testified to Congress that Trump had exaggerated his wealth on financial statements provided to Deutsche Bank while trying to obtain financing to buy the NFL’s Buffalo Bills.
James’ office has previously sued Trump for misusing his charitable foundation to further his political and business interests. He was ordered to pay $2 million to an array of charities as a fine, and his charity, the Trump Foundation, was shut down.
Trump incorporated the Trump Organization in New York in 1981. He still owns it, but he put his assets into a revocable trust and gave up his positions as the company’s director, president and chairman when he became president, leaving management of the company to sons Eric and Donald Jr.
Trump did not return to an official leadership position upon leaving the White House in 2021, but his sons have testified that he was still involved in some decision-making.
Engoron had already appointed a monitor, retired federal judge Barbara Jones, to keep an eye on the company.