Trump ordered to pay $355 million and barred from New York business

NEW YORK — A New York judge Friday handed Donald Trump a crushing defeat in his civil fraud case, finding the former president liable for conspiring to manipulate his net worth and ordering him to pay a penalty of nearly $355 million plus interest that could wipe out his entire stockpile of cash.

The decision by Justice Arthur Engoron caps a chaotic, yearslong case in which New York’s attorney general put Trump’s fantastical claims of wealth on trial. With no jury, the power was in Engoron’s hands alone, and he came down hard: The judge delivered a sweeping array of punishments that threatens the former president’s business empire as he simultaneously contends with four criminal prosecutions and seeks to regain the White House.

Engoron banned Trump for three years from serving in top roles at any New York company, including portions of his own Trump Organization. He also imposed a two-year ban on the former president’s adult sons and ordered that they pay more than $4 million each. One of them, Eric Trump, is the company’s de facto CEO, and the ruling throws into doubt whether any member of the family can run the business in the near term.

The judge also ordered that they pay substantial interest, pushing the penalty for the former president to $450 million, according to the attorney general, Letitia James.

In his unconventional style, Engoron criticized Donald Trump and the other defendants for refusing to admit wrongdoing for years. “Their complete lack of contrition and remorse borders on pathological,” he said.

He noted that Trump had not committed violent crimes and also conceded that “Donald Trump is not Bernard Madoff.” Still, he wrote, “defendants are incapable of admitting the error of their ways.”

Trump will appeal the financial penalty but will have to either come up with the money or secure a bond within 30 days. The ruling will not render him bankrupt, because most of his wealth is in real estate, which altogether is worth far more than the penalty.

Trump will also ask an appeals court to halt the restrictions on him and his sons from running the company while it considers the case. In a news conference from his home in Mar-a-Lago in Florida on Friday evening, he attacked James and Engoron, calling them both “corrupt.”

Alina Habba, one of Trump’s lawyers, described the ruling in her own statement as “a manifest injustice — plain and simple.” She added that “given the grave stakes, we trust that the Appellate Division will overturn this egregious verdict.”

But there might be little Trump can do to thwart one of the judge’s most consequential punishments: extending for three years the appointment of an independent monitor who is the court’s eyes and ears at the Trump Organization. Engoron also strengthened the monitor’s authority to watch for fraud and second-guess transactions that look suspicious.

Trump’s lawyers have railed against the monitor, Barbara Jones, saying that her work had already cost the business more than $2.5 million; the decision to extend her oversight of the privately held company could enrage the Trumps, who see her presence as an irritant and an insult.

James had sought an even harsher penalty, asking for Trump to be permanently banned from New York’s business world. In the 2022 lawsuit that precipitated the trial, she accused Trump of inflating his net worth to obtain favorable treatment from banks and other lenders, attacking the foundation of his public persona as a billionaire businessperson.

Even though the lenders made money from Trump, they were the purported victims in the case, with James arguing that without his fraud, they could have made even more.

The financial penalty reflects those lost profits, with nearly half of the $355 million — $168 million — representing the interest that Trump saved, and the remaining sum representing his profit on the recent sale of two properties, money that the judge has now clawed back from Trump and corporate entities he owns.

Before the trial began, Engoron ruled that the former president had used his annual financial statements to defraud the lenders, siding with the attorney general on her case’s central claim. The judge’s Friday ruling ratified almost all of the other accusations James had leveled against Trump, finding the former president had conspired with his top executives to violate several state laws.

The judge’s decision for now grants James, a Democrat, a career-defining victory. She campaigned for office promising to bring Trump to justice and sat calmly in the courtroom as the former president attacked her, calling her a corrupt politician motivated solely by self-interest.

“This long-running fraud was intentional, egregious, illegal,” James said during a Friday evening news conference, adding that “there cannot be different rules for different people in this country, and former presidents are no exception.”

Her win is Trump’s second major courtroom loss in two months, following a January jury verdict in a defamation case brought by E. Jean Carroll, a writer whom he was found liable of sexually abusing. The jury penalized him $83.3 million.

Trump’s lawyers argued that the fraud did not have a victim in the traditional sense, daring the attorney general to find someone who was harmed. And in a statement Friday, a Trump Organization spokesperson noted that the company had “never missed any loan payment or been in default on any loan” and that the lenders “performed extensive due diligence prior to entering into these transactions.”

At trial, Trump’s lawyers called as witnesses the president’s former bankers, who testified that they had been delighted to have Trump as a client.

Eric Trump and his brother Donald Trump Jr. also testified, but their efforts to distance themselves from their father’s financial statements fell flat with the judge. Engoron’s decision to ban them from running any New York business for two years — and Donald Trump for three — will likely strike a nerve with the Trump family.

Before the trial, the fallout from the case seemed to threaten the Trump Organization’s very existence. When Engoron first ruled that Trump had committed fraud, he ordered the dissolution of much of the former president’s New York empire.

But legal experts had questioned the judge’s ability to do that, and in his ruling Friday, Engoron pulled back. Instead, the judge said any “restructuring and potential dissolution” would be up to Jones, the independent monitor.

The judge also granted Jones new authority as part of an “enhanced monitorship” and asked her to recommend an independent compliance director who will oversee the company’s financial reporting from within its ranks.

The monitorship and other penalties — including a three-year ban on Trump and his company seeking loans from banks registered in New York — could hamstring the company as it seeks to compete in the state’s crowded real estate market.

However, nothing will hurt quite as much as the financial penalty. If upheld on appeal, it could erase the cushion of liquidity — cash, stocks and bonds — that Trump built in his post-presidential life.

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