Trump civil fraud trial verdict: $364M penalty imposed

NEW YORK - A New York judge ordered Donald Trump and his companies on Friday to pay $355 million in penalties, finding they engaged in a yearslong scheme to dupe banks and others with financial statements that inflated his wealth.

Trump won’t have to pay out the money immediately as an appeals process plays out, but the verdict still is a stunning setback for the former president.

If he’s ultimately forced to pay, the magnitude of the penalty, on top of earlier judgments, could dramatically diminish his financial resources. And it undermines the image of a successful businessman that he’s 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 concluded that Trump and his co-defendants "failed to accept responsibility" and that experts who testified on his behalf "simply denied reality."

Read the full court ruling here:

"This is a venial sin, not a mortal sin," Engoron, a Democrat, wrote in a searing 92-page opinion. "They did not rob a bank at gunpoint. Donald Trump is not Bernard Madoff. Yet, defendants are incapable of admitting the error of their ways."

He said their "complete lack of contrition and remorse borders on pathological" and "the frauds found here leap off the page and shock the conscience."

Trump, who built his reputation as a real estate titan, also was barred 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, each were ordered to pay $4 million and barred from being officers of New York companies for two years. Former 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 Attorney General Letitia James "has been obsessed with ’Getting Trump' for years" and that Engoron’s decision was "an illegal, unAmerican judgment against me, my family, and my tremendous business."

The total $364 million verdict — which James' office said grows to $450 million, adding interest — keeps the Trump Organization 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 "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. Because no matter how big, rich, or powerful you think you are, no one is above the law," James said.

What to know about Trump's case

Trump’s case involved 11 years of financial statements with values based on disputed and sometimes outright false descriptions of properties used as collateral should his loans go bust.

Among them: Trump exaggerated the size of his Manhattan penthouse apartment by three times. He listed unfinished buildings as if they were complete, and apartments under rent-control as if they were free of such rules. He showed restricted funds as if they were liquid cash. And Trump valued Mar-a-Lago as a single residence, though he had signed away rights to develop it as anything but a club.

Former US president Donald Trump on the 4th hole at Trump International Golf Links & Hotel in Doonbeg, Co. Clare, during his visit to Ireland. ( Brian Lawless/PA Images via Getty Images)

In making her case against Trump, Letitia James called to the stand a lending expert who estimated that Deutsche Bank gave up $168 million in extra interest on its Trump loans, basing his calculations as if Trump never offered a personal guarantee.

But Trump did offer a guarantee, even if his estimate of his personal wealth was exaggerated. In fact, the bank made its own estimates of Trump’s personal wealth, at times lopping billions from Trump’s figures, and still decided to lend to him.

And testimony from Deutsche officials responsible for the loans suggested that deciding the right rate at which to lend, even absent Trump’s personal guarantee, isn’t so simple.

Former U.S. President Donald Trump arrives at Trump Tower on April 03, 2023 in New York City.  (Gotham/GC Images)

The Deutsche unit making the Trump business loans wasn’t the typical lending unit, but its private wealth division. That group often lends to rich clients not only to earn interest but to help its chances of winning the lucrative business of managing their vast personal investments and getting them to buy other bank services — something that testimony showed Deutsche was clearly hoping to do with the ex-president.

Trump has repeatedly said in impromptu rants at his trial that the case is a meritless, political "witch hunt" because he is richer than the statements sent to banks suggest, and lenders didn’t care about those figures anyway because they always did their own analysis, always got paid back in full and continued to lend to him.

"What’s happened here, sir, is a fraud on me. I am an innocent man," Trump said in a six-minute statement in court earlier this month before the judge cut him off.

The Associated Press contributed to this report.