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.
In the ruling, Engoron wrote that Trump and the other defendants in the case “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 as $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.
Habba said in a statement that the ruling was a “manifest injustice” and the “culmination of a multi-year, politically fueled witch hunt” against Trump.
“This is not just about Donald Trump – if this decision stands, it will serve as a signal to every single American that New York is no longer open for business,” Habba said.
Engoron 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, and two other entities Trump ran had previously settled allegations of wrongdoing brought by New York State.
“Defendants are likely to continue their fraudulent ways unless the court grants significant injunctive relief,” Engoron wrote.
The case was decided by the judge without a jury.
Trump and his adult sons, Don Jr. and Eric, were defendants in the case. Don Jr. and Eric Trump were each ordered by the judge to pay $4 million.
Eric and Don Jr.’s lawyer, Clifford Robert, called the decision a “gross injustice” and said he “firmly believes” it will be overturned on appeal.
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 trial testimony and wrote in the decision 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 an April deposition that he had roughly $400 million in cash.
Trump could potentially cash out his majority stake in his social media app Truth Social, which is now worth about $4 billion. 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.
CONTENTIOUS TRIAL
Trump 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 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.
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.”
