Donald Trump’s wealth was decimated on Friday when a New York judge ordered him and his lieutenants to pay more than $364 million—before interest—for engaging in bank fraud, simultaneously yanking away the family’s control of his eponymous real estate company and handing the former president an embarrassing legal defeat.
Importantly, New York Supreme Court Justice Arthur F. Engoron also blocked Trump from borrowing money at any bank in New York for three years, erecting an enormous barrier to his ability to appeal the judgment, potentially forcing him to sell one of his prized buildings or golf courses.
A towering 9 percent interest rate on the judgment could push the total north of $450 million, presenting Trump with the worst personal financial crisis in his 77 years, just as he fends off four criminal cases and seeks the American presidency in 2024.
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“This court is mindful that this action is not the first time the Trump Organization or its related entities has been found to have engaged in corporate malfeasance,” Engoron wrote. “This is not defendants’ first rodeo.”
Trump and his corporate entities are on the hook for a little over $355 million before interest—and depending on what exact dates the court clerk uses to calculate the interest, he could be looking at an additional $100 million penalty. Two sons who currently serve as corporate executives, Don Jr. and Eric, each also owe $4 million before interest. And the company’s former chief financial officer, Allen Weisselberg, owes an additional $1 million before interest.
New York Attorney General Letitia James emerged victorious, having spent nearly four years investigating the company, fighting for documents and testimony, and eventually spending three months at a civil trial that concluded in January. Her investigators found that Trump routinely inflated real estate assets and scored better bank loans, while Trump doubled down on his self-aggrandizing claims and noted that banks never complained anyway.
The judge addressed that extensively in his order, noting that “timely and total repayment of loans does not extinguish the harm that false statements inflict on the marketplace.”
“Indeed, the common excuse that ‘everybody does it’ is all the more reason to strive for honesty and transparency and to be vigilant in enforcing the rules. Here, despite the false financial statements, it is undisputed that defendants have made all required payments on time; the next group of lenders to receive bogus statements might not be so lucky. New York means business in combating business fraud,” he wrote.
An hour after the decision was issued, an infuriated Trump railed against the judge and reiterated the mistaken claim that he was denied a trial by jury—when in fact his lawyers failed to formally request one.
“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,” he posted on his Truth Social media network.
The Trump Organization is essentially now Trump in name only.
The tycoon’s sons, Don Jr. and Eric Trump, were also ejected from their leadership positions and can no longer be the company’s executive vice presidents—or even lead any other corporations in New York for two years.
By mid-March, the company will have to answer to a former federal judge, Barbara Jones, who has spent a year serving as the corporation’s outside monitor. She has 30 days to reconfigure her current role. While the company previously had to alert her within two weeks anytime it moved more than $5 million, Jones will now have enhanced powers that put her first in line.
“Her observations over the past 14 months indicate that still more oversight is required,” Engoron wrote, extending her monitorship for at least another three years.
Instead of seeking her forgiveness when they submit any financial documents to an outside entity, the Trumps will have to ask for her permission.
That means the Trumps may not even have the authority to shift around money to fight this massive court order without asking Jones for her approval.
Engoron justified extending Jones’ tenure by noting how the company has avoided issuing statements of financial condition since she appeared, something he called “a telling admission that it simply cannot, or will not, prepare an SFC without committing fraud.”
Having viewed the Trump Organization as a paper-faking ruse, Justice Engoron is also forcing the company to pay for an independent director of compliance whose task is to clean it up from the inside.
Friday’s conclusion marked a stunning defeat for the boastful business mogul. The 92-page order struck at the source of Trump’s pride, a company he led and grew for half a century—one that allowed him to transform his glittering entrepreneurial image in the 1980s city tabloids into a popular network TV show with The Apprentice, and eventually carried him into the White House in 2016.
The AG’s triumph was all but certain. When both sides asked Engoron to issue definitive rulings before the trial started in October, the judge reviewed evidence collected by state investigators and concluded Trump had indeed engaged in bank fraud by vastly overstating the value of his properties to secure better loans, at one point even tripling the size of his three-floor palace in Trump Tower by making up space that didn’t exist.
Immediately after the judgment was issued, Trump defense lawyer Alina Habba issued a statement calling the decision “a manifest injustice—plain and simple.”
“It is the culmination of a multi-year, politically fueled witch hunt that was designed to ‘take down Donald Trump’ before Letitia James ever stepped foot into the Attorney General’s office. Countless hours of testimony proved that there was no wrongdoing, no crime, and no victim,” she said, continuing to make the same arguments that failed to convince the judge.
In his order, Engoron eviscerated the Trumps’ attempt to blame their accountants at trial, writing that “the buck for being truthful in the supporting data valuations stopped with the Trump Organization, not the accountants.”
He also chucked aside their attempts to downplay the inaccuracies in Trump’s financial statements.
“As an ancient maxim has it, de minimis non curat lex, the law is not concerned with trifles. Neither is this Court. But that is not what we have here,” he wrote. “The frauds found here leap off the page and shock the conscience.”
However, Engoron did not deliver everything the AG asked for. He awarded slightly less money than she had requested and declined to permanently ban Trump from the real estate industry. Engoron also reversed his pretrial decision to cancel the Trump Organization’s business licenses, doing away with what would have been the corporate death penalty and effectively ending a legal battle that’s currently on appeal in New York’s higher courts.
While seeming to strike a ‘tough but fair’ judgment, Engoron still delivered a few surprises.
Although this trial was civil in nature, Engoron still managed to punish a Trump confidant who has played a key role in protecting Trump from several criminal investigations in New York. Allen Weisselberg, an accountant who has served as Trump’s right-hand money man and company chief financial officer for decades, took the fall for his boss at the Trump Organization’s tax fraud trial in 2022 before another judge and spent 99 days at the city’s dreaded Rikers Island jail.
But Trump’s mob-like tactics were on full display when Weisselberg revealed at that separate trial that the company was dangling an annual bonus over his head that would push his pay to $1 million—a compromising financial arrangement, given that he was on the witness stand and answering damning questions about his employer.
Engoron, who recently expressed concern that Weisselberg lied in the bank fraud trial, noted in his Friday order that the Trump Organization has been keeping its former executive on a “short leash” meant to keep this key witness quiet. The judge ordered Weisselberg to pay $1 million he’s already received since leaving the company, a clear attempt to claw back what the judge saw as ill-gotten payments that served as nothing more than hush money.
Weisselberg and the accountant he oversaw, Jeffrey McConney, are also forbidden from ever again working in corporate finance. (The two men appear to be retired now anyway.)
Trump is expected to immediately appeal the decision, but doing so will be a logistical nightmare. New York requires that a person seeking to pause this kind of judgment immediately front a massive sum, anywhere from 110 percent to 120 percent of the judgment. And while Trump boasted in sworn testimony last year that he had some $400 million in cash, that wouldn’t be enough to cover this bank fraud judgment and last month’s $83 million verdict in his rape defamation case. Both cases require him to post the money up front, squeezing him at the same time.
In New York, expensive appellate bonds can be covered by insurers. But those types of companies are licensed by the state, and Engoron’s decision also prohibits Trump from borrowing money from any entity licensed by New York’s Department of Financial Services. Industry experts told The Daily Beast that this two-pronged attack could force Trump to immediately sell one of the buildings that bear his name—in Chicago or New York—or desperately seek a foreign bank that has enough assets to loan him the money but has oddly avoided setting up shop in the financial capital of the world.
“Obviously, the whole case centers around Trump making repeated and massive false statements,” said Tom Gober, a forensic accountant and certified fraud examiner.
“Other than a friend, I can’t imagine any lender being willing to stick his nose out that far knowing that he’s going to get his nose cut off. It’s not looking good for Trump. He’s going to have to come up with something,” Gober said.
Trump can’t even rely on misappropriating MAGA donor funds that he keeps collecting in his bid for the 2024 Republican presidential nomination. The Save America political action committee already spent $24.8 million on lawyers and lawsuits in the second half of 2023, draining his coffers to protect him from this case and the ongoing criminal prosecutions in Georgia, Florida, New York, and Washington.
Then there’s the matter of Trump’s potential escape. Engoron’s colossal judgment doesn’t just apply to Trump’s companies, but to him as an individual—as well as the revocable trust where he parked his riches at the start of his presidential administration in 2017. That means Trump can’t rely on his go-to method for avoiding his past financial failures: corporate bankruptcy.
As a real estate developer, Trump was notorious for refusing to put skin in the game and creating legal distance between himself and his business deals, which is why he managed to survive the collapse of his casinos and resorts when they went bankrupt in 1991, 1992, 2004, and 2009. But Trump, who would wince at the mere thought of an embarrassing personal bankruptcy, won’t be able to take that route either, given that he would first be forced to sell off his brand name assets anyway.
Although much of Trump’s anger in recent months has been directed at the state and federal prosecutors who have secured four criminal indictments against him, Trump has expressed particular outrage at the bank fraud case. His relentless attacks against Engoron and the court’s law clerk, the attorney Allison Greenfield, has resulted in nonstop death threats against them from his loyalist followers—including a bomb scare at the judge’s home on the final day of trial.
The nature of this political intimidation was most readily apparent by the court’s decision to release this decision on Friday afternoon, ensuring that Engoron and Greenfield could leave the courthouse in time for any violent reprisal, according to a person briefed on the security arrangements.
The former president has little time to address this personal financial crisis, however, as he must already begin to prepare for his battle against the Manhattan District Attorney at another New York courthouse just a block away.
On Thursday, Justice Juan Merchan batted away Trump’s attempts to delay his upcoming criminal trial for faking business records to effect a coverup of his sexual affair with the porn star Stormy Daniels that spared his scandal-ridden 2016 presidential campaign from additional embarrassment. Trump will be back in court four days a week starting Monday, March 25.
