Judge Arthur Engoron of the New York Supreme Court found former president Donald Trump liable for falsifying business records, issuing false financial statements and conspiracy to commit fraud and insurance fraud on Friday, fining Trump and his business nearly $355 million, subject to interest. Trump was also banned from serving as an officer in any New York corporation for three years. This ruling comes after an eleven-week bench trial, which is a trial without a jury, and the judge is the finder of fact.
In his findings of fact, Engoron found that the Trump Organization had its accountants create fraudulent financial reports called “compilations” in a scheme to get better rates from lenders. After stating his findings, Engoron denied Trump’s defense that the lenders did not rely on the fraudulent reports because reliance is not an element of fraud, and the lenders did, in fact, rely on the false reports. Additionally, Engoron dismissed Trump’s “blame the accountants” defense because the accountants were not parties to the case and were provided false information from the Trump Organization.
Trump’s sons Donald Trump Jr. and Eric Trump were also found liable in the suit and banned from serving as officers in New York Corporations for two years. Former Trump Organization CFO Allen Weisselberg and former Trump Organization controller Jeff McConney were also found liable for carrying out insurance fraud, permanently banned from serving in a “financial control function” in any New York corporation and banned for serving as officers in New York corporations for two years. Engoron concluded that all these parties were either aware of the fraud or falsified records to commit the fraud, stating “there is overwhelming evidence that each of these defendants made or participated in making a false statement in the business records of an enterprise, the Trump Organization, with the intent to defraud.”
Engoron came to his nearly $355 million verdict through the doctrine of disgorgement. This equitable remedy “deprives wrongdoers of their net profits from unlawful activity.” Disgorgement “aims to deter wrongdoing by preventing the wrongdoer from retaining ill-gotten gains from fraudulent conduct.” Thus, this remedy is meant to deprive the Trump Organization of its gains rather than make victims whole again.
Engoron ordered injunctive relief in the form of banning Trump and his codefendants from serving as officers in New York corporations after being troubled by Trumps’s refusal to admit any wrongdoing, stating:
This Court is not constituted to judge morality; it is constituted to find facts and apply the law. In this particular case, in applying the law to the facts, the Court intends to protect the integrity of the financial marketplace and, thus, the public as a whole. Defendants’ refusal to admit error—indeed, to continue it, according to the Independent Monitor—constrains this Court to conclude that they will engage in it going forward unless judicially restrained. Indeed, Donald Trump testified that, even today, he does not believe the Trump Organization needed to make any changes based on the facts that came out during this trial
In response to the verdict, Trump took to Truth Social to state:
A Crooked New York State Judge, working with a totally Corrupt Attorney General who ran on the basis of “I will get Trump,” before knowing anything about me or my company, has just fined me $355 Million based on nothing other than having built a GREAT COMPANY. ELECTION INTERFERENCE. WITCH HUNT (more to follow!).
Trump went on to refute the ruling and say:
This “decision” is a Complete and Total SHAM. There were No Victims, No Damages, No Complaints. Only satisfied Banks and Insurance Companies (which made a ton of money), GREAT Financial Statements, that didn’t even include the most valuable Asset – The TRUMP Brand, IRONCLAD Disclaimers (Buyer Beware, and Do your Own Due Diligence), and amazing Properties all over the World.
On the other hand, New York Attorney General Letitia James praised the ruling, commenting:
Today, justice has been served. This is a tremendous victory for this state, this nation, and for everyone who believes that we all must play by the same rules — even former presidents. For years, Donald Trump engaged in massive fraud to falsely inflate his net worth and unjustly enrich himself, his family, and his organization. … Now, Donald Trump is finally facing accountability for his lying, cheating, and staggering fraud. Because no matter how big, rich, or powerful you think you are, no one is above the law.
In September 2022, New York Attorney General Letitia James accused the Trumps of engaging in financial fraud to obtain more favorable loan rates and tax breaks. Before the start of the trial, Engoron found that the Trumps had committed fraud by lying about the financial valuation of various business assets, going back to as early as 2011.
This is not the only lawsuit Trump is dealing with in the lead-up to the 2024 US presidential election. Earlier this week, Trump asked the US Supreme Court to hear his appeal of a decision from the US Court of Appeals for the DC Circuit, which denied Trump’s claim of “absolute” presidential immunity from criminal prosecution in the federal 2020 election interference case against him. Additionally, on February 8, the Supreme Court heard oral arguments on Trump’s appeal of the Colorado Supreme Court’s decision to remove him from the state’s ballot for the 2024 election.
