New York court throws out $500M fraud ruling against Trump after blockbuster lawsuit from Letitia James
Last year, a verdict in Manhattan found that Trump and his co-defendants in his Trump Organization empire had defrauded banks and investors as part of a decade-long scheme to secure favorable financing terms for some of his brand-building properties.
An appeals court decision on Thursday determined that the verdict from New York Justice Arthur Engoron — which has ballooned to more than $515 million, with growing interest — was 'excessive.'
Last year's ruling followed a three-year investigation and lawsuit under Attorney General Letitia James, who had accused Trump and his associates had convinced banks and lenders to give them favorable financing terms based on bogus and inflated financial statements.
After a bench trial in civil court, Trump, his companies and trust were ordered to state more than $354 million.
The president also was barred from holding any executive office with a New York company and from getting loans from New York banks for three years, while his adult sons are barred from executive offices with any New York company for two years.
Former executives Allen Weisselberg and Jeffrey McConney were also permanently barred from financially controlling any New York businesses, and faced a three-year ban from serving as an officer or director of any New York business.
In his ruling, Engoron pointed to the defendants' lack of credibility on the witness stand, their failed strategy to 'blame the accountants' for the false financial statements and valuations at the centre of the case, and the 'evidence of deceit' used to come up with the inflated figures under scrutiny.
He pointed to a history of malfeasance within the Trump Organization, followed by the findings in the sprawling fraud case, to determine that Trump and his co-defendants are 'likely to continue their fraudulent ways' without a significant judgment against them.
'Their complete lack of contrition and remorse borders on pathological,' he wrote in a 92-page order.
'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,' he added. 'Defendants did not commit murder or arson. They did not rob a bank at gunpoint. Donald Trump is not Bernard Madoff. Yet, defendants are incapable of admitting the error of their ways.'
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