On Friday afternoon, New York County Supreme Court Judge Arthur Engoron ordered Donald Trump, his companies and some executives to pay $364 million. The former president is also barred from serving as an officer or director of any New York company for three years. Trump’s lawyers made it known before the ruling that they intended to appeal.
The ruling, part of New York Attorney General Letitia James’ civil fraud lawsuit against Trump and his company, the Trump Organization, involved fraudulent statements made on loan applications that allegedly allowed the former president to obtain more favorable terms than those to which he would otherwise be entitled. .
For example, in filings with financial institutions, Trump routinely overstated the market value of his properties — including Trump Tower and his Mar-a-Lago beach resort, among others — as Engoron established in a filing September ruling. For example, Trump listed the value of Mar-a-Lago as high as $612 million, even though the Palm Beach County tax inspector listed its value as between $18 million and $27.6 million. Trump Park Avenue contains 12 apartments, which Trump has told lenders are worth more than $3.8 million each. But Engoron noted in his September ruling that the units’ rents are stabilized; taking this into account, the actual estimated value of the apartments is $62,500 per unit.
Even more brazenly, Trump reported the size of his penthouse in Trump Tower as 30,000 square feet, when the actual size was just under 11,000 square feet, inflating its valuation by more than $200 million.
“The case centered on financial statements that Trump submitted to lenders to help him acquire hundreds of millions of dollars in financing that he used to expand his portfolio of hotels and golf resorts,” Jacob Gershman reported at The Wall Street Journal. “Trump borrowed the money at rock-bottom rates after promising to maintain a net worth of at least $2.5 billion.”
Central to this net worth, of course, were the documents in question that routinely overstated the value of Trump’s assets. James claimed in his lawsuit that Trump overstated his net worth by as much as $2.2 billion.
While Trump’s inventions were bold, it’s unclear who was actually harmed by them. “Trump never defaulted on the loans, and no one from Deutsche Bank, his primary lender, testified that they would have rated the loans differently if they had known about the alleged inaccuracies,” Gershman wrote. “The bank came up with its own much lower value estimates of Trump’s properties, using his financial statements as a starting point for its own credit risk analysis.” Trump’s lawyers argued that “the lenders made a profit and never alleged any breach of contract.”