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The Telegraph
The Telegraph
16 Feb 2024
Susie Coen; Andrew Buncombe

Trump must pay more than $350m for fraudulently inflating income, judge rules

Donald Trump has been fined almost  $355 million (£281m) and effectively banned from serving as a director of his own company for three years, for fraudulently overinflating his net worth to dupe lenders.

In a damning ruling on Friday, Judge Arthur Engoron, who has been overseeing Mr Trump’s civil fraud trial, also barred the former US president’s adult sons from running the family firm for two years.

A visibly defiant Mr Trump confirmed he would appeal the decision and angrily denounced Joe Biden while also blaming Russia, China and a “crooked New York state judge”.

Speaking at Mar-a-Lago he said: “A crooked New York state judge just ruled that I have to pay a fine of $355 million for having built the perfect company.

“This is Russia, this is China, this all comes from the DOJ, it all comes out of Biden. It’s a witch hunt against his political opponent the likes of which our country has never seen before.

“You see it in third world countries, banana republics, but you don’t see it here.

“So I just want to say this - we built a great company. There was no fraud. The banks got their money - 100 per cent. They love Trump. They testified that Trump is a great.”

Letitia James, the New York Attorney General, said of Mr Trump: “we are holding him accountable for lying, cheating, and a lack of contrition... for flouting the rules that all of us must play by.”

“The scale and the scope of Donald Trump’s fraud is staggering,” Ms James said.

“And so too is his ego. And his belief that the rules do not apply to him.”

Trump calls ruling ‘election interference’

In his remarks on Friday night, Mr Trump called Ms James “horribly corrupt” and suggested that he was a victim of ‘‘election interference”. 

“They used a consumer fraud statute that’s never been used for a thing like this before. They used it for me because I’m running for president. I’m beating Biden by a lot,” he said. 

“If I weren’t running, none of this stuff would have ever happened. None of these lawsuits would have ever happened. I would have a nice life. But I enjoy this life for a different reason. We’re going to make America great again.”

Earlier, a spokesman for the Trump Organisation said the ruling was a “gross miscarriage of justice” and said the firm had “never missed any loan payment or been in default”.

“Every member of the New York business community, no matter the industry, should be gravely concerned with this gross overreach and brazen attempt by the Attorney General to exert limitless power where no private or public harm has been established,” the spokesman said.

“If allowed to stand, this ruling will only further expedite the continuing exodus of companies from New York.”

‘A pathological lack of remorse’

In the 92-page filing, Mr Engoron said Mr Trump and his co-defendants had submitted “blatantly false financial data” to secure loans and ordered the former president to pay $354,868,768.

Mr Trump and the other defendants in the case “are incapable of admitting the error of their ways”, Mr Engoron wrote.

“Their complete lack of contrition and remorse borders on pathological,” Mr Engoron wrote. “Instead, they adopt a ‘See no evil, hear no evil, speak no evil’ posture that the evidence belies.”

Commenting on Mr Trump’s testimony, Mr Engoron said he had “rarely responded to the questions asked, and frequently interjected long, irrelevant speeches on issues far beyond the scope of the trial.”

He added: “His refusal to answer the questions directly, or in some cases, at all, severely compromised his credibility.”

As well as being banned from serving as officers or directors for any New York company, his sons Eric and Donald Jr were also ordered to pay more than $4 million each.

Mr Trump’s lawyer Alina Habba said in a statement that the ruling was a “manifest injustice” and “culmination of a multi-year, politically fuelled witch hunt” against him.

“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,” Ms Habba said, adding that she plans to appeal.

The punitive verdict will wound the real estate empire that helped Mr Trump craft his image as a billionaire businessman and helped vaulted him to fame and the White House.

Mr Trump’s mammoth fine could climb to $400 million or more once interest is added. He expected to appeal the penalty, but he will have to pay the funds or secure a bond within the next 30 days.

Mr Engoron cancelled his prior ruling from September ordering the “dissolution” of companies that control pillars of Mr 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.

Billions of dollars

The lawsuit alleged that from 2011 to 2021, Mr Trump and his organisation created more than 200 false valuations to inflate his net worth by billions of dollars, with the goal of getting better business, insurance and banking deals.

Ms James’ legal team laid out how they believed the fraud was “central to the operations of the Trump Organisation’s business” and claimed that the money he got through low interest rates even helped to fund Mr Trump’s 2016 presidential campaign.

The two-and-a-half-month trial saw 40 witnesses, including Mr Trump, his daughter Ivanka, Eric and Don Jr take the stand.

The decision was left to Mr Engoron, rather than a jury, because juries are not allowed in this type of lawsuit and neither Ms James’ office nor Mr Trump’s legal team had requested one.

While he has stormed to victory in the early Republican primaries and caucuses, Mr Trump has had a painful start to the year in terms of his mess of legal woes.

On Thursday, a different New York judge dismissed his lawyers’ pleas to throw out the case to schedule his hush money criminal trial for March 25.

He is also already facing an $83.3 million payout for defaming sex abuse victim E Jean Carroll, on top of the $5 million awarded by a jury last year.

Also on Thursday, a judge in Atlanta heard arguments on whether to remove Fulton County District Attorney Fani Willis from Mr Trump’s Georgia election interference case, because she had a personal relationship with a special prosecutor she hired.

During his civil fraud case, Mr Trump clashed with Mr Engoron throughout the trial, with the former president using his testimony to brand the judge a “fraud” and roll out his usual claims of being the victim of a “witch hunt”.

Ms James’ office estimated Mr Trump exaggerated his wealth by as much as $3.6 billion, a figure they claim was used to get lower insurance premiums and favourable loan terms, saving at least $168 million on interest alone.

Mr Trump has denied wrongdoing. Taking the stand on 6 November, he claimed his financial statements understated his net worth and that banks did not only rely on his own statements.