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A New York judge has ordered Donald Trump to pay more than $350mn in penalties for “blatant” fraud committed by the real estate empire that brought the former US president fame and fortune.
Justice Arthur Engoron also banned Trump from conducting further business for three years in the state. He and his businesses are prohibited from applying for loans from financial institutions registered with the New York regulator during the same period. However, Engoron reversed an earlier decision that had ordered the dissolution of the former president’s existing businesses.
Trump and his company, The Trump Organization, were ordered to pay about $355mn — the vast bulk of a total $364mn in penalties in the case. His adult sons Donald Jr and Eric were ordered to pay more than $4mn each and individually barred from doing business in New York state for two years.
Allen Weisselberg, the Trump Organization’s former chief financial officer who served jail time for tax fraud, was ordered to pay a further $1mn.
With interest, the total amount of penalties handed down could exceed $450mn, New York attorney-general Letitia James said in a statement after the decision.
The decision delivers another costly blow to Trump, who is mounting another run for the White House while fighting numerous legal cases. In addition to the civil trial, which cut to the heart of his business holdings, he is also under indictment in four separate criminal cases. In a statement on his Truth Social platform, Trump called it an “illegal, un-American judgment against me, my family and my tremendous business”.
Engoron’s ruling came following the conclusion of a heated, weeks-long civil fraud trial in which lawyers for the New York attorney-general detailed how the Trumps vastly overstated the value of their residential and office buildings, hotels and golf courses by hundreds of millions of dollars. Doing so had allowed them to obtain loans on more favourable terms from the likes of Deutsche Bank, among other benefits, the court found.
The attorney-general’s lawsuit was a direct assault on the reputation Trump cultivated over decades as a billionaire businessman with a Midas touch. Instead, James’s lawyers claimed he would press underlings to puff up valuations for his properties in order to push him up the ranks of the annual Forbes billionaires list.
Trump was a frequent presence in the courtroom during the non-jury trial. During a combative and chaotic statement to the court, he noted his lenders had been paid back in full and on time — and so there were no victims — and insisted his net worth had, if anything, been understated over the years.
Trump, Donald Jr and Eric, also testified they had relied on the expertise of their outside accountants when signing off on financial documents. The former president railed against James, a Democrat, and portrayed the case as a politically motivated witch hunt.
Trump and his associates’ “complete lack of contrition and remorse borders on pathological”, Engoron wrote in his ruling on Friday. “Defendants did not commit murder or arson. They did not rob a bank at gunpoint. Donald Trump is not Bernard Madoff,” he said of the late Ponzi scheme architect: “Yet, defendants are incapable of admitting the error of their ways.”
Engoron added Trump “severely compromised his credibility” by often refusing to answer questions directly.
Rather than express regret for the overvaluation of his properties, Trump testified he believed his accountants had “underestimated” their worth, insisting that Mar-a-Lago was worth up to $1.5bn, Engoron wrote.
This, he added, would value his Florida home higher “than the most expensive private residence listed in the country by approximately 400 per cent”.
Engoron also dismissed Trump’s claim that there was no fraud as the loans had been repaid in full and there was no injured party.
James said in response to the judgment: “Everyday Americans cannot lie to a bank to get a mortgage to buy a home, and if they did, our government would throw the book at them. There simply cannot be different rules for different people.”
Chris Kise, an attorney for Trump, said: “The court today ignored the law, ignored the facts, and simply signed off on the attorney-general’s manifestly unjust political crusade against the front-running candidate for president of the United States.”
He added it was “hard to imagine a more unfair process and hard to believe this is happening in America”, before confirming Trump would appeal against the decision.
Engoron’s decision comes a day after a judge in a neighbouring Manhattan criminal court refused to dismiss or delay the “hush money” case brought against Trump, in which he is accused of paying off a porn star in the run-up to the 2016 election and then covering up the payments in his business. A trial has been set for March 25.
Although it falls short of the $370mn sought by James, the fine is also the second large financial penalty issued against the former president. A jury last month awarded writer E Jean Carroll $83.3mn in damages from Trump for defamation, after he denied sexually assaulting her. That came on top of a separate $5mn award last year for her after he was found liable for battery and defamation.