Judge Arthur Engoron, of New York, has sentenced Donald Trump to pay a fine of $354.9 million for defrauding banks and insurers through the Trump Organization for a decade. In addition, it prohibits him and his sons Donald Jr. and Eric – who must also pay 4 million each – from holding senior positions in any company in the state, including his real estate empire. The economic penalty could amount to $400 million if interest is added.
The magnate’s lawyer, Alina Habba, has announced in a statement that she will appeal the ruling and has described the decision as “manifest injustice, plain and simple.” “It is the culmination of a multi-year, politically fueled witch hunt that was designed to bring down Donald Trump, before Letitia James – who brought the case in 2022 after three years of investigation – set foot in office. of the Attorney General,” he says in the statement.
Engoron already ruled in September, in a summary judgment, that Trump and his children fraudulently and drastically inflated, between 2011 and 2021, the valuations of the company’s assets to obtain advantageous loans from banks and insurance companies. In that ruling, he also issued an order canceling the family company’s business licenses in New York, but the decision was put on hold following Trump’s appeal. In this Friday’s ruling, Engoron has lifted this ban.
“In order to obtain more loans and at lower rates, the defendants presented blatantly false financial data to accountants, resulting in fraudulent financial statements,” Judge Engoron wrote in the 92-page ruling. “When confronted at trial with the defendants’ statements, witnesses and experts, they simply denied reality and failed to accept responsibility or impose internal controls to prevent future recurrences.”
Among the more than 200 false or misleading valuations that prosecutor James found, with which Trump inflated his net worth by around $3.6 billion, include his Trump Tower triplex in New York, his private Mar-a club -Lake in Palm Beach (Florida), Trump Park Avenue (located two blocks from Central Park) and several of its golf courses.
Judge Engoron appointed a monitor in November 2022 to monitor the Trump Organization and prevent further fraud, former Judge Barbara Jones. In Friday’s ruling, she ruled that she maintains monitoring of her and, in addition, “orders the installation of an independent compliance director.” He will be in charge of running the family business, at least for the duration of the three-year ban imposed on Trump and his children.
Supervisor Jones released a report last month pointing out several transparency and accuracy issues in the real estate empire’s financial documents. In it, she uncovered, among others, a loan of 48 million of which there was no type of written record. Furthermore, according to the report, Trump underestimated annual management costs and waited eight months to reveal the dissolution of some companies. The Trump Organization had 521 companies at the time supervision was imposed, in 2022, and currently consists of 415 companies, of which only about 70 are “revenue-generating operating entities.”
This is the second civil sentence that the former president receives in 2024, after last month a New York civil jury sentenced him to pay 83.3 million in damages to columnist E. Jean Carroll for having repeatedly defamed her for years. And it adds to another conviction last May for sexual abuse of Carroll.
In addition, the former president faces 91 criminal charges filed in four different judicial proceedings, in New York, Washington, Georgia and Florida. And the ban on running for office in Colorado, a case that is already in the hands of the Supreme Court and whose initial arguments began on February 8.
This Friday’s conviction is not only a blow to his real estate empire, but also to the image of a billionaire that catapulted him as a celebrity, selling himself as a successful businessman. Engoron’s ruling rules that part of his fortune was non-existent, the product of a falsification of net worth in accounting statements. That is to say, he is not the self-made entrepreneur he claims to be, but rather an inveterate fraudster, in light of the verdict.
The civil lawsuit was filed in September 2022 by New York Attorney General Letitia James, which initially sought $250 million but was eventually increased to $370 million for Trump and the other defendants. That figure represents, James alleged, the profits obtained during ten years of fraudulent practices.
“For years, Donald Trump falsely inflated his net worth to enrich himself and deceive the system,” the prosecutor wrote in a statement published on October 2, the day the trial began. “His purported net worth has long been based on incredible fraud,” he said. “In this country, there are consequences for persistent fraud. No matter how rich or powerful you are, there are not two different levels of law. The State of Law should apply equally to everyone, and it is my responsibility to ensure that it does.
Trump’s incendiary behavior during the trial, which he turned into another stage of his campaign for the November presidential elections, generated tensions with the judge, who prohibited him from making statements about the judicial process. Before or after each court hearing, the magnate denounced before the cameras that this case is part of a “witch hunt” led by President Joe Biden against him.
However, the federal administration has had nothing to do with this state case initiated by the civil lawsuit of James – a Democrat, who became attorney general in 2018 after winning the elections – after a three-year investigation, prior to the Biden presidency.
In it, he put the magnifying glass on 23 properties and assets of the Trump Organization. James discovered that at least 11 of the tycoon’s annual financial statements included more than 200 false or misleading valuations.
His most iconic property: the triplex located in Trump Tower, on Manhattan’s Fifth Avenue and 56th Street. Trump valued the asset on the basis that it covered about 2,800 square meters, when in reality it measures around 1,000, as It appears in a previous document, from October 1994, provided by the prosecutor at the trial. In 2015, the apartment was valued at $327 million, a price James called “absurd.”
Among other properties investigated, are Trump Park Avenue, two blocks from Central Park and whose value was inflated from the 84.5 million dollars appraised by a bank in 2020 to the 135.8 million that appeared in the financial statement of this year; The Trump Building, at 40 Wall Street, which in 2012 was valued at 220 million and the family business inflated it to 530 million; or the private Mar-a-Lago club in Palm Beach (Florida), which was valued at 739 million, exaggerating its real value – compared to standard valuations in the county – by 2,300%, according to Judge Engoron.
The argument of Trump’s defense, which has recognized the overvaluations, has been that there is no evidence of an intention to defraud and that it was the lenders’ obligation to confirm the value of their assets, regardless of the valuations provided by the business group.
New York’s anti-fraud law, stricter than other states and established in 1956, has only been applied in a dozen similar cases in the last 70 years, according to an Associated Press investigation. But the case of the Trump Organization stands out among all of them, not only because the conglomerate of a former president and candidate is condemned, but because it is “the only large company” that was threatened with closing without the need to demonstrate that there were “obvious victims and big losses”. That is to say, the principles of financial fair play have been sufficient to justify the sanction.
