New York increases the penalties sought in the fraud trial against Trump to $370 million

(David Dee Delgado/Associated Press)

New York increases the penalties sought in the fraud trial against Trump to $370 million


January 5, 2024

New York state attorneys on Friday increased their request for fines to more than $370 million in former President Trump’s civil lawsuit for corporate fraud.

Trump, whose judge in the case has already found liability for fraud, responded: They have to pay me.

The exchange took place as attorneys for both sides filed court papers highlighting points from the trial ahead of closing arguments scheduled for Thursday. Trump is expected to attend.

It will be the last chance for state and defense attorneys to argue their case. The civil lawsuit, in which the Republican presidential candidate was accused of misleading banks and insurers by vastly inflating his net worth, has consequences for him, even as he fights four criminal cases in different courts.

The judge in the non-jury trial will determine how much Trump must pay based on the earlier ruling that Trump’s financial statements were fraudulent.

The civil case in New York could ultimately ban him from doing business in the state where he built his real estate empire, in addition to the $370 million fine, plus interest, that state Atty. Gen. Letitia James rose from a pretrial figure of $250 million, which was increased during the proceedings, to more than $300 million.

The state says the new amount reflects windfalls from misconduct; primarily $199 million in profits from real estate sales and $169 million in savings on interest rates, as calculated by an investment banking expert hired by James Office.

Trump protested the proposed sentence in an all-caps post on his social media platform, claiming there was no victimization, no default and no damages.

He complained that the attorney general was demanding $370 million and should pay me instead, claiming that businesses are fleeing New York.

According to the US Department of Labor, the number of private sector jobs in New York increased by 1% in the year to November 2023, compared with 1.6% nationally.

James Office argued in a filing Friday that Trump got attractive rates on loans and insurance because of the wealth he claimed on his personal financial statements, or SFCs. That wealth was greatly inflated, according to the lawsuit, which accused Trump, his company and key executives of misleading banks and insurers.

The lawsuit alleged that the documents yielded exorbitant values ​​for Trump’s golf courses, hotels and more, including a former home in his namesake tower in New York and his current home at the Mar-a-Lago club in Palm Beach, Florida.

The conclusion that defendants intended to defraud in preparing and certifying Trump’s SFCs is inescapable, Kevin Wallace, an attorney in James’ office, wrote in a filing Friday. The numerous deceptive schemes they used to inflate asset values ​​and hide facts were so outrageous that they believed an innocent explanation.

The defendants, including the sons of former President Donald Trump Jr. and Eric Trump, deny any wrongdoing.

Trump claims that his financial statements were billions of dollars low, and that any overestimations, such as valuing his Trump Tower penthouse at nearly three times its actual value, were merely errors and made no difference in the overall picture of his fortunes.

He claims the documents are legally watertight because the figures have not been audited, among other caveats. Recipients saw them as a starting point for their own analyses, the defense says.

None of his lenders testified that they would not have made the loans or charged more interest if his financial statements had shown different figures, defense attorneys wrote in a filing Friday. The state did not add factual evidence from any witness that the profits were illegally obtained, Michael Madaio and Christopher Kise wrote. There was also no evidence that insurers were defrauded.

Separately, attorneys argued that claims against Eric Trump and Trump Jr., who serve as executive vice presidents of the Trump Organization, should be dismissed because they never had more than superficial knowledge or involvement in creating, preparing or using the financial statements from their father. The two relied on the work of other Trump Organization executives and an outside accounting firm that prepared these documents, their lawyers said.

The verdict is up to the judge because James brought the case under a state law that does not allow a jury. Judge Arthur Engoron has said he hopes to make a decision on the sentence by the end of this month.

He will weigh claims of conspiracy, insurance fraud and falsifying corporate documents.

Engoran ruled on the lawsuit’s highest claim before trial, finding that Trump and other defendants had engaged in fraud for years. In that ruling, the judge ordered that a trustee take control of some of the ex-president’s properties, but an appeals court frozen that order.

In addition to fines of $370 million, plus interest, James wants Trump banned from doing business in New York.

During the trial, Engoron fined Trump a total of $15,000 after finding that he violated a gag order that prohibited trial participants from publicly commenting on the judge’s staff. The order was imposed after Trump defamed the judge’s chief clerk.

Trump’s lawyers are appealing the gag order.


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