Trump ordered to pay $355 million in NY fraud case

New York’s strict anti-fraud legislation, in force for more than six decades, has caught up with Donald Trump in an eventful week for the Republican. A day after March 25 was confirmed as the start date of the first criminal trial against a former U.S. president, the likely Republican nominee for the November presidential election was ordered Friday to pay $354.9 million for inflating his wealth to obtain favorable loans, a crime for which he had already been convicted of in September. The list of inflated assets includes his apartment in Manhattan’s Trump Tower, his Mar-a-Lago estate and several golf courses, among others.

Although the New York trial was a civil one — unlike the four other criminal cases he is currently facing —, Trump’s reputation as a successful businessman, which he relied on to make the leap into politics, has been seriously undermined, not to mention the blow to his interests: he is barred from doing business in New York State for three years.

Judge Arthur Engoron’s decision, who already ruled last September that Trump and the other defendants had committed fraud, was expected. New York Attorney General Letitia James, a Democrat, had asked for a fine of $370 million, of which $168 million corresponds to what Trump saved on loans by inflating their value, that is, the extra interest that the lenders did not receive. In addition to the monetary penalty, James sought to ban Trump from the New York real estate industry and drastically limit his ability to do business in the state. James also asked that Trump’s two adult sons, Donald Jr. and Eric, be barred for five years. The judge agreed to a two-year ban.

The fine is a not inconsiderable amount even for the personal fortune of Trump, who in another civil process was sentenced to pay a total of $88 million for sexually abusing columnist E. Jean Carroll ($5 million) and for defaming her ($83 million). Last year, in just a few minutes, his political action committees (PACs) spent about $50 million from donations on legal fees.

Throughout the trial, Judge Engoron has been skeptical of the former president’s claims, and sympathetic to James’ arguments. The former president’s lawyers tried on several occasions to derail the case, without success. State lawyers said Trump exaggerated his wealth by as much as $3.6 billion.

In a social media post, Trump once belittled the Attorney General’s accusations by writing, in his usual angry capital letters, “I AM WORTH MUCH MORE THAN THE NUMBERS SHOW ON MY FINANCIAL STATEMENTS.” The magnate has always maintained that his lenders were not victims, as they made money from their dealings with him. As in all other ongoing prosecutions, the Republican has portrayed himself as a victim of a political witch hunt by Democrats to torpedo his electoral campaign.

While awaiting Engoron’s ruling, new irregularities at the family business, the Trump Organization, came to light a few weeks ago, thanks to an external audit commissioned by Engoron in late 2022. The task of overseeing the accounts fell to a former federal judge, and her report highlighted several paperwork issues: missing disclosures, typos, mathematical errors and questions about a $48 million loan between Trump and one of the companies in the family emporium. As the auditor told the judge, the problems “may reflect a lack of adequate internal controls.” The findings of this scrutiny were denied by Trump’s lawyers for, in their view, “acting in bad faith.”

To put the Trump Organization’s fraud in context, the Associated Press reviewed nearly 150 cases reported since New York’s “repeat fraud” law was passed in 1956. The assessment showed that, in almost every instance, victims and losses were key factors. Customers who were victims of fraud had lost money, purchased defective products, or never received the services they had requested. Moreover, the companies investigated were almost always intervened as a last resort to stop an ongoing fraud and prevent new victims. Among the most notorious frauds, according to the AP investigation, were a fake psychologist who sold dubious treatments, a fake lawyer who promised students a place at law school, and businessmen who marketed financial advice, but in reality swindled people out of their house deeds.

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