New York judge Arthur Engoron passed a searing judgment on Donald Trump and his real-estate company on Friday, fining the former president over $350m plus pre-judgment interest and banning him and his adult sons from leading companies in New York for the next few years. The fraud case ruling is a stunning blow to a man who sees himself as a successful real estate mogul and who built a political career off that reputation.
Here are five things we know from Friday’s verdict:
Engoron gave prosecutors the fine they asked for
Engoron fined the defendants $364m – close to the $370m the attorney general’s office asked for when they rested their case in January.
A bulk of the fine comes from two calculations: $168m from how much Trump saved on the interest of several loans, and $126m from the profit he made when he sold the Old Post Office building in Washington.
In his verdict, Engoron said that Trump profited by paying lower interest rates when working with lenders such as Deutsche Bank who, because of the fudged financial statements, believed Trump had a higher net worth.
Michiel McCarty, an expert witness who testified at the trial for prosecutors, calculated that Trump saved $168m with lower interest rates because he inflated the value of his net worth. Engoron agreed to this amount, saying that “defendants’ fraud saved them” from having to pay a higher interest.
Another $126m of the fine came from calculating the “ill-gotten profits” Trump received when he sold the Old Post Office building in 2022. Trump was able to purchase the building, which he turned into a hotel, through the use of inflated financial statements.
“As with so many Trump real estate deals, the Old Post Office contract was obtained through the use of false SFCs (no false SFCs, no deal),” Engoron noted in the verdict.
The judge also fined Don Jr and Eric Trump about $4m individually for the individual profit distribution they received from the sale of the Old Post Office building.
The last $1m is a fine for Allen Weisselberg, Trump’s former finance chief, who was paid $2m in a separation agreement with the Trump Organization. Engoron noted that because Weisselberg was a “critical player in nearly every instance of fraud, it would be inequitable to allow him to profit from his actions by covering up defendants’ misdeeds”.
Engoron did not permanently ban Trump from the New York real estate industry
Prosecutors had asked Engoron to permanently ban Trump from the real estate industry in New York, similar to how entrepreneur and “pharma bro” Martin Shkreli was banned from the pharmaceutical industry in 2022.
Engoron ultimately banned Trump from leading his company – or any company based in New York – for three years, saving him from a permanent ban. Trump’s sons, Eric and Don Jr, were banned from running the company for two years.
Trump and the Trump Organization have also been instructed not to apply for loans from any New York-registered financial firm for three years.
Engoron also reversed his pre-trial ruling ordering the cancellation of the Trump Organization’s business certificates, a move that would essentially have ended its ability to continue operations in New York.
In Friday’s verdict, Engoron overturned this initial ruling, saying that dissolving parts of Trump’s empire was “no longer necessary” as he was ordering the appointment of two court monitors to oversee the business: former judge Barbara Jones, and an independent compliance director to ensure “good financial and accounting practices”.
With this case headed to an appeals court, some legal experts had openly questioned whether Engoron had the authority to order the cancellations. This move draws a line under that debate.
In the verdict, Engoron wrote that the “cancellation of the business licenses is no longer necessary” as the company will be overseen by two court-appointed monitors who will oversee “major activites that could lead to fraud”.
Since 2022, Jones has been serving as a court-appointed monitor overseeing the company’s financial reporting. Engoron has decided that she will remain in the post for at least another three years – with greater powers.
The Trump Organization will now need to get prior approval before submitting any financial disclosure to a third party. On top of this, Jones has a month to propose “the specific authority she believes that she needs to keep defendants honest”, Engoron said.
Engoron thought Trump and his adult children lacked credibility on the stand
Donald Trump spent hours testifying in a bid to persuade a New York judge that he was not guilty of financial fraud. Engoron did not buy it.
The former president “rarely responded to the questions asked, and he frequently interjected long, irrelevant speeches on issues far beyond the scope of the trial”, Engoron wrote in his 92-page decision. “His refusal to answer the questions directly, or in some cases, at all, severely compromised his credibility.”
The judge was equally unsparing in his assessment of the evidence provided by Trump’s eldest sons, who have led the Trump Organization since their father entered the White House in 2017.
Eric Trump “severely damaged” his credibility on the stand, according to Engoron, by repeatedly denying that he had known before the case arose that his father had compiled financial statements valuing his assets and net worth.
Only when confronted with “copious” documentary evidence that he had known about the financial statements as early as August 2013 did Eric Trump “begrudgingly” acknowledge that it “appears” he had known, the judge noted.
On the stand, Donald Trump Jr claimed he did not know how or why Weisselberg left the business after being criminally indicted. The court found this “entirely unbelievable”, Engoron said.
The veteran judge was impressed by Ivanka Trump, the former president’s daughter, whom he described as a “thoughtful, articulate and poised” witness – although the court found her “inconsistent recall” during questioning by prosecutors and defense lawyers “suspect”.
Engoron was not persuaded by Trump’s arguments
In the verdict, the judge struck down a few core arguments Trump’s lawyers made throughout the trial.
The first was that lenders did not rely on the financial statements when making deals with Trump. It was an argument that was repeated throughout the trial, including when Trump and his sons took the witness stand.
The life of the loans, Engoron wrote, were “based on numbers on [the financial statements], which lenders interpreted in their own unique way”, Engoron said.
A similar line of argument was made by Trump’s lawyers, who often said the reported financial figures were immaterial, or that they didn’t matter to the financial statements. Trump expressed this in his own testimony, when he said that lenders knew how wealthy he was and that was all that mattered.
In his verdict, Engoron appeared particularly frustrated by Trump’s materiality arguments, saying that “faced with clear evidence of a misstatement, a person can always shout that ‘it’s immaterial’”.
Trump and his sons as witnesses also argued that it was the job of their outside accountants to get the financial statements right. But Engoron pointed out that there was “overwhelming evidence adduced at trial demonstrating that [the accounting firms] relied on the Trump Organization, not vice versa, to be truthful and accurate, and they had a right to do so”.
“The buck for being truthful … stopped with the Trump Organization, not the accountants,” Engoron wrote.
A ‘pathological’ lack of contrition
“Absolute perfection, including with numbers, exists only in heaven,” Engoron wrote. “If fraud is insignificant, then, like most things in life, it just does not matter.”
But these frauds were not merely significant: they “leap off the page and shock the conscience”, he continued.
In the face of this, what truly rankled Engoron was Trump and his allies’ refusal to acknowledge almost all the errors at the heart of this case. “Their complete lack of contrition and remorse borders on pathological,” the judge wrote. “They are accused only of inflating asset values to make more money.
“The documents prove this over and over again. This is a venial sin, not a mortal sin. Defendants did not commit murder or arson. They did not rob a bank at gunpoint. Donald Trump is not [the late fraudster] Bernard Madoff.
“Yet, defendants are incapable of admitting the error of their ways. Instead, they adopt a ‘see no evil, hear no evil, speak no evil’ posture that the evidence belies.”
After the ruling, Trump remained defiant. Describing the verdict as a “Complete and Total SHAM”, the former president erroneously claimed his $354.9m fine was “based on nothing other than having built a GREAT COMPANY”.
• This article was amended on 17 February 2024 to clarify that the ruling against Donald Trump also includes pre-judgment interest.
