Donald Trump has been ordered to pay £354.9 million in penalties for fraudulently inflating his net worth to deceive lenders, as decreed by a New York judge on Friday.
This ruling constitutes yet another legal setback for the former U.S. president in a civil case that threatens his real estate empire.
Justice Arthur Engoron, in a strongly worded decision following a contentious three-month trial in Manhattan, also imposed a ban on Trump, who is seeking to reclaim the presidency this year, from holding positions as an officer or director of any New York corporation for three years.
Trump’s lawyer, Alina Habba, pledged to lodge an appeal.
Engoron rescinded his previous decision from September calling for the “dissolution” of companies controlling key aspects of Trump’s real estate holdings, stating on Friday that this action was no longer necessary.
Instead, he will appoint an independent monitor and compliance director to oversee Trump’s businesses.
Regarding Trump and the other defendants, Engoron wrote in the ruling, “Their complete lack of contrition and remorse borders on pathological.”
He added, “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, alleged that Trump and his family businesses exaggerated his net worth by as much as $3.6 billion annually over a decade to deceive bankers into offering more favourable loan terms.
Trump, facing criminal charges in four other cases, has denounced the lawsuit as a politically motivated vendetta by James, a Democrat.
In response to the ruling, Trump took to his social media platform to label Engoron as “crooked,” James as “corrupt,” and the case against him as “ELECTION INTERFERENCE” and a “WITCH HUNT.”
Engoron, delivering the verdict without a jury, also prohibited Trump and his implicated companies from seeking loans from any financial institution chartered in New York for three years, potentially hindering his access to credit from major U.S. banks.
The judge attributed the severe penalties to Trump’s and his companies’ past legal entanglements, including the Trump Organization’s conviction for criminal tax fraud in 2022, and settlements reached by two other entities previously managed by Trump in response to allegations of misconduct brought by the state of New York.
Trump’s adult sons, Don Jr. and Eric, who were also defendants, were each ordered to pay £4 million.
Their attorney, Clifford Robert, denounced the ruling as a “gross injustice” and expressed confidence in its overturn on appeal.
Allen Weisselberg, former CFO of the Trump Organization, who pleaded guilty to tax fraud in a separate case, was instructed to pay £1 million and is permanently barred from managing the finances of any New York company.
James confirmed that the total penalties paid by all defendants exceeded £450 million, including interest.
“The judge’s decision could significantly impact Trump’s real estate empire, despite his substantial lead in the race for the Republican nomination to challenge Democratic President Joe Biden in the upcoming U.S. election.”
In his testimony during the trial, Trump admitted to inaccuracies in some of his property valuations but argued that banks were responsible for conducting their own due diligence.
Engoron criticised Trump’s behaviour during his testimony, stating that his refusal to answer questions directly compromised his credibility.
Trump may be required to deposit the full judgment amount plus interest during the appeal process, potentially through an appeal bond.
However, his credibility with lenders may be diminished following Engoron’s finding that he misrepresented his wealth to banks.
Trump’s financial situation remains uncertain, with estimates of his wealth varying.
While Forbes estimates his net worth at £2.6 billion, Trump stated in a deposition last year that he possessed approximately £400 million in cash.
Additionally, Trump’s ownership stake in the parent company of his social media app, Truth Social, is valued at around £4 billion.
He will be permitted to sell shares in the merged entity six months after completion, pending regulatory approval.
Although Trump could liquidate parts of his real estate portfolio to satisfy the judgment, the value of his holdings is unclear, and the process could be time-consuming.
Campaign funds cannot be utilised to settle the judgment, as the case is unrelated to Trump’s campaign or his conduct as a political candidate or president, according to legal experts.
In another civil case, Trump was ordered to pay writer E. Jean Carroll £83.3 million for defaming her by denying her claim of rape.
Trump has vowed to appeal this ruling, as well as a separate case in which he was ordered to pay Carroll £5 million.
Trump faces indictment in four criminal cases, including one in New York related to hush money paid to a porn star.
A trial date of March 25 has been set by the judge overseeing that case. Trump has pleaded not guilty in all cases.
During the civil fraud trial, Trump openly criticised the judge and James, asserting his innocence.
Engoron fined Trump £15,000 for twice violating a gag order against disparaging court staff during the trial.
Engoron’s ruling in September found Trump’s financial statements to be fraudulent, leading the trial’s focus to shift towards determining the appropriate penalties.