New York judge in civil fraud case fines Trump $350 M, depleting available cash in election year
New York, Feb 17: A local judge has dealt a blow to Donald Trump’s purse and ego, hitting him with a massive fine of over $350 million, depleting available cash in an election year and barring the billionaire real estate developer from doing business in New York State for three years.
State Supreme Court Justice Arthur Engoron imposed the penalties on Friday on the leading candidate for the Republican Party’s presidential nomination after having found him guilty of fraud in a civil case brought by the state’s Attorney General, Letitia James, a Democrat.
She said that the fine and the interests on it amount to $450 million and will continue to increase until the fine is paid.
Engoron said that the conduct of Trump and his associate in the case “borders on the pathological” because of their lack of remorse.
Trump hit back posting on the social media Truth Social that the ruling was “an illegal, unAmerican judgment against me, my family, and my tremendous business.”
State Attorney General's position is an elected office and James, a Democrat, called the verdict “a tremendous victory for this state, this nation, and for everyone who believes that we all must play by the same rules — even former Presidents.”
A day earlier, in another blow to Trump, a New York Supreme Court ordered Trump’s trial in criminal fraud trial to start on March 25, in the middle of the campaign and in the week before the primaries – intraparty elections to select the Republican Party’s presidential nominee – in New York and four other states with 17 more to go.
In that case he is accused of criminally falsifying business records to cover up hush money paid to a porn star to silence her claims she had had an affair with Trump.
With his assets amounting to billions tied up in real estate, the huge fine and the interests could wipe out Trump’s available cash as he campaigns for the party nomination, which he has virtually been assured of, and prepares to battle the Democratic Party’s presumptive nominee President Joe Biden in less than nine months.
(Forbes, which dropped him from the list of the 400 richest, still estimated his wealth to be $2.6 billion last year, down from $3.2 billion the previous year when he made the roster.)
But Trump may not be wanting for campaign funds as his supporters rally around him – with more likely to join in if he wins the party nomination.
His campaign raised $118.3 million last year according to its filings with the Federal Election Commission and ended the year and $33 million remained at year’s end after expenses.
Having boasted about his business acumen that made him add billions to his inherited wealth, being barred from doing business in the state from where his real estate empire took off is a blow to his basic identity that goes to the root of his claims to being super-rich.
The case was centred on the real extent of his wealth, which the prosecution said was vastly exaggerated when he applied to banks for business loans and that constituted business fraud.
James took it upon herself to file the case even though the banks that lent him the money based on what the prosecution said were fraudulent documents, did not complain and even made a profit from the transactions.
The prosecution said that because he exaggerated his wealth, he received the loans on favourable terms and $168 million in the fine are the amount he saved due to lower interests.
(When banks make loans, they base the interest rate on the risks and the assumption is that higher assets lessen the possibility of a default making the loans less risky and hence, eligible for lower interests.)
Engoron also ordered a three-year extension of the term of the independent monitor he had appointed to oversee the Trump Organisation in another humiliation for Trump.
Engoron also hit Trump’s two adult sons, who are his business partners, with $4 million in fines and also barred them from running businesses for two years.