A New York judge has ruled that former President Donald Trump committed fraud to gain favorable terms for his real estate business and must pay roughly $355 million in damages.
Judge Arthur Engoron on Friday also barred Mr. Trump and two former company officials from serving as the officer or director of any New York company for three years.
Further, Mr. Trump and his real-estate business cannot seek loans from New York lenders for that period.
Judge Engoron stopped short of dissolving the Trump Organization’s business certificates, instead keeping a monitor in place to supervise the company for at least three years.
Mr. Trump’s oldest sons, Donald Trump Jr. and Eric Trump, are barred from serving as a director or officer of a New York company for two years. Each of the sons was found liable for $4 million in the judgment.
“In order to borrow more and at lower rates, defendants submitted blatantly false financial data to the accountants, resulting in fraudulent financial statements,” the judge wrote in a 92-page ruling. “When confronted at trial with the statements, defendants’ fact and expert witnesses simply denied reality, and defendants failed to accept responsibility or to impose internal controls to prevent future recurrences.”
Mr. Trump said the ruling is intended to hurt him and derail his presidential campaign to benefit President Biden.
“This election interference and tyrannical abuse of power by a crooked judge and crooked attorney general cannot be tolerated,” he said in a statement. “They are crazed lunatics who are destroying everything in their way. It all starts with Biden’s attacks on his political opponent!”
New York Attorney General Letitia James, a Democrat, sued Mr. Trump, his two eldest sons and the Trump Organization in 2022, alleging they submitted false financial statements to gain favorable terms on loans and insurance.
Mr. Trump, who is all but certain to win the Republican nomination for president, says the case is part of a Democratic scheme to hurt his candidacy. He has said repeatedly that his company and its officers did nothing wrong, and that all banks were repaid on terms favorable to them.
Mr. Trump’s legal spokeswoman, Alina Habba, said they planned to appeal the ruling and “overturn this egregious verdict.”
“This verdict is a manifest injustice — plain and simple,” she said. “It is the culmination of a multi-year, politically fueled witch hunt that was designed to ’take down Donald Trump,’ before Letitia James ever stepped foot into the Attorney General’s office. Countless hours of testimony proved that there was no wrongdoing, no crime, and no victim.”
Mr. Trump visited the Manhattan courthouse sporadically during a multiweek trial in the fall and winter and fumed at Judge Engoron, who in a pretrial ruling concluded that some fraud had occurred, and Ms. James, who took aim at Mr. Trump early in her tenure.
Judge Engoron found Mr. Trump liable for issuing false financial statements, falsifying business records, and conspiracy.
The case centered on alleged fraud in the statements of financial condition that accountants compiled for lenders based on information from Mr. Trump’s companies.
In one section of the ruling, Judge Engoron said the Trumps admitted they erred in tripling the size of the Trump Tower Penthouse in their document. But he said their lack of contrition for other misstatements “borders on pathological.”
“Defendants did not commit murder or arson. They did not rob a bank at gunpoint. Donald Trump is not Bernard Madoff,” he wrote. “Yet, defendants are incapable of admitting the error of their ways.”
He pointed to falsehoods in the financial statements beyond the dimensions of Mr. Trump’s penthouse, such as crafting a budget for 40 Wall Street that showed a positive net operating income despite it running repeated deficits; valuing Trump Park Avenue based on an offering price that failed to reflect that the apartments were rent-restricted; and valuing Mar-a-Lago in Florida as if it could be sold as a single-family residence despite deed restrictions that require it to be a social club.
Judge Engoron rejected Mr. Trump’s argument that he followed common real estate practices and included disclaimers in his statements.
“Timely and total repayment of loans does not extinguish the harm that false statements inflict on the marketplace,” the judge wrote.
“Indeed, the common excuse that ’everybody does it’ is all the more reason to strive for honesty and transparency and to be vigilant in enforcing the rules. Here, despite the false financial statements, it is undisputed that defendants have made all required payments on time; the next group of lenders to receive bogus statements might not be so lucky.”
Judge Engoron was particularly scathing in his assessment of ex-Trump Organization Chief Financial Officer Allen Weisselberg and former corporate Controller Jeffrey McConney, both of whom defended their work from the witness stand at trial.
“The evidence is overwhelming that Allen Weisselberg and Jeffrey McConney cannot be entrusted with controlling the finances of any business,” the ruling said. “Accordingly, this Court hereby permanently enjoins Allen Weisselberg and Jeffrey McConney from serving in the financial control function of any New York corporation or similar business entity operating in New York State.”
The judgment kicks off a year of legal hurdles for Mr. Trump even as he coasts toward the Republican presidential nomination.
He faces four criminal trials up and down the East Coast this year, starting with a New York case alleging he falsified business records to cover up hush-money payments before the 2016 election. That trial is set to begin March 25.
Prosecutors secured indictments related to Mr. Trump’s efforts to overturn the 2020 election results, his decision to store classified documents at his Mar-a-Lago estate in Florida and the allegations he made hush payments to an adult film star and others before the 2016 election.
The former president denies all the allegations and says charges were whipped up by Democrats to thwart his political ambitions.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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