New York
The Civil Fraud Ruling on Donald Trump, Annotated
Former President Donald J. Trump was penalized $355 million, plus millions more in interest, and banned for three years from serving in any top roles at a New York company, including his own, in a ruling on Friday by Justice Arthur F. Engoron. The decision comes after the state Attorney General Letitia James sued Mr. Trump, members of his family and his company in 2022.
The ruling expands on Justice Engoron’s decision last fall, which found that Mr. Trump’s financial statements were filled with fraudulent claims. Mr. Trump will appeal the financial penalty and is likely to appeal other restrictions; he has already appealed last fall’s ruling.
The New York Times annotated the document.
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New York Times Analysis
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1
This ruling by Justice Arthur F. Engoron is a result of a 2022 lawsuit filed by New York’s attorney general, Letitia James, against Donald J. Trump and the Trump Organization; his adult sons, Donald Trump Jr. and Eric Trump; the company’s former chief financial officer Allen Weisselberg and former controller Jeffrey McConney; and several of their related entities. Mr. Trump’s daughter, Ivanka Trump, was also initially a defendant until an appeals court dismissed the case against her.
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2
The law under which Ms. James sued, known by its shorthand 63(12), requires the plaintiff to show a defendant’s conduct was deceptive. If that standard is met, a judge can impose severe punishment, including forfeiting the money obtained through fraud. Ms. James has also used this law against the oil company ExxonMobil, the tobacco brand Juul and the pharma executive Martin Shkreli.
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3
Justice Engoron is now providing a background of this case. This ruling comes after a three-year investigation by the attorney general’s office and the conclusion of a trial that ended last month. But this likely won’t be Mr. Trump’s last word on the matter — he will appeal the financial penalty and is likely to appeal other restrictions, as he has already appealed other rulings.
4
In late 2022, Justice Engoron assigned a former federal judge, Barbara Jones, to serve as a monitor at the Trump Organization and tasked her with keeping an eye on the company and its lending relationships. Last month, she issued a report citing inconsistencies in its financial reporting, which “may reflect a lack of adequate internal controls.”
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Here, Justice Engoron is laying out the laws he considered in his ruling beyond 63(12). The attorney general’s lawsuit included allegations of violations of falsifying business records, issuing false financial statements, insurance fraud and related conspiracy offenses.
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7
For over 50 pages, Justice Engoron describes his conclusions about the testimony of all of the witnesses who spoke during the trial.
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Justice Engoron discusses Mr. McConney’s important role in preparing Mr. Trump’s financial statements. The judge points out that Mr. McConney prepared all the valuations on the statements in consultation with Mr. Weisselberg.
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In his discussion of Mr. Weisselberg, Justice Engoron calls his testimony in the trial “intentionally evasive.” Justice Engoron then brings up Mr. Weisselberg’s separation agreement from the Trump Organization, which prohibited him from voluntarily cooperating with any entities “adverse” to the organization. Justice Engoron says that this renders Mr. Weisselberg’s testimony highly unreliable.
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10
When Donald Trump Jr. testified in court, he disavowed responsibility for his father’s financial statements despite serving as a trustee of the Donald J. Trump Revocable Trust while his father was president. But Justice Engoron specifically cites here that Donald Trump Jr. certified that he was responsible for the financial statements, and testified that he intended for the banks to rely on them and that the statements were “materially accurate.”
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11
During his testimony, Eric Trump, the Trump Organization’s de facto chief executive, initially denied knowing about his father’s financial statements until this case. As Justice Engoron points out here, Eric Trump eventually conceded to knowing about them as early as 2013. As a result, Justice Engoron calls Eric Trump’s credibility “severely damaged.”
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12
Justice Engoron points to Mr. Trump’s testimony when he took the witness stand in November when Mr. Trump acknowledged that he helped put together his annual financial statements. Mr. Trump said he would see them and occasionally have suggestions.
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After four pages of describing Mr. Trump’s testimony, Justice Engoron says Mr. Trump rarely responded to the questions asked and frequently interjected long, irrelevant speeches, which all “severely compromised his credibility.”
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14
For more than a dozen pages, Justice Engoron provides background on specific assets that Mr. Trump included in his annual financial statements.
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The judge is clarifying that Ms. James had to prove her claims by a “preponderance of the evidence,” meaning she had to demonstrate it was more likely than not that Mr. Trump and the co-defendants should be held liable. This is a lower standard than that of a criminal trial, which requires that evidence be proven “beyond a reasonable doubt.”
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During the trial, Mr. Trump and his legal team tried to shift the blame for any inaccuracies in his financial statements onto his outside accountants. But Justice Engoron criticizes that argument here.
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During the monthslong trial, Mr. Trump, his legal team and several witnesses stressed that real estate appraisals are an art, not a science. But here it’s clear Justice Engoron, while agreeing with that sentiment, also believes it’s deceptive when different appraisals rely on different assumptions.
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18
Justice Engoron is now going through the defendants one by one and articulating the evidence that shows each of their “intent to defraud,” which is required by the statute against falsifying business records. Notably, his first paragraph describing the former president’s intent provides examples including Mr. Trump’s awareness that his triplex apartment was not 30,000 square feet and his valuation of Mar-a-Lago as a single-family residence even though it was deeded as a social club.
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Among the defendants, Justice Engoron finds only Allen Weisselberg and Jeffrey McConney liable for insurance fraud. Here, he doesn’t provide an explanation for why the other defendants, including Mr. Trump and his adult sons, were not found liable, and he says that both Mr. Weisselberg and Mr. McConney made false representations to insurance companies about Mr. Trump’s financial statements.
20
While Mr. Trump and his adult sons were not found liable for insurance fraud, here Justice Engoron finds them liable for conspiracy to commit insurance fraud, explaining that they all “aided and abetted” the conspiracy to commit insurance fraud by falsifying business records.
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21
Justice Engoron here adopts the approximations of the attorney general’s expert witness Michiel McCarty, whom Justice Engoron says testified “reliably and convincingly,” and finds that the defendants’ fraud saved them over $168 million in interest.
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22
In finding that the defendants were able to purchase the Old Post Office in Washington, D.C., through their use of the fraudulent financial statements, Justice Engoron rules that the defendants’ proceeds from the sale of the post office in 2022 should be considered “ill-gotten gains.” He penalizes Donald Trump and his companies over $126 million, and Donald Trump Jr. and Eric Trump $4 million each, for this one property.
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23
Justice Engoron blasts the defendants for failing to admit that they were wrong in their valuations — adding that “their complete lack of contrition and remorse borders on pathological.” He says that this inability to admit error makes him believe they will continue their fraudulent activities unless “judicially restrained.”
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25
Justice Engoron states that Judge Barbara Jones, who has been serving as an independent monitor at the Trump Organization since 2022, will continue in that role for at least three years. He clarifies that going forward, her role will be enhanced and she will review Trump Organization financial disclosures before they are submitted to any third party, to ensure that there are no material misstatements.
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27
Justice Engoron lays out his bans against the defendants, ruling that Mr. Trump, Mr. Weisselberg and Mr. McConney cannot serve as officers or directors of any corporation or legal entity in New York for the next three years, and bans his sons Donald Trump Jr., and Eric Trump for two years from the same. He also prohibits Mr. Trump from applying for any loans from any New York banks for the next three years. The ruling goes further in the cases of Mr. Weisselberg and Mr. McConney, permanently barring them from serving in the financial control function of any New York business.
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28
Justice Engoron also ordered that Mr. Trump and his sons pay the interest, pushing the penalty to $450 million, according to Ms. James.
Welcome to Day 2 of the Metropolitan Diary challenge, part of our celebration of the column’s 50th anniversary. On Day 1, we gave you tips for identifying your New York City story. Today, we’ll help you write it. (Missed Day 1? It’s not too late to start.)
What makes for a good Diary? It’s simply a good story that happens to be set in, and capture, the essential New York-ness of the city. While this isn’t a full writing course, we do have guidance on the kinds of elements that the submissions we publish include. They typically have: a beginning, middle and end; sharp details; catchy dialogue; a bit of surprise; some humor, warmth or emotion. But there is no formula, so flouting these loose rules can be worthwhile.
Don’t worry if you don’t think of yourself as a “writer.” Focus on being a “storyteller.” Pretend you are telling your story to the person who’d most appreciate it, using whatever conversational language or pacing that would hold their attention. Do it out loud if you want, maybe give that person a call and tell them your story (or tell it to them again). Then write it down.
That’s the big picture. For more tips, read on.
Here is an example of a published Diary that we (and readers) really liked, and a few thoughts on why that may help crystallize yours.
Unacceptable
Dear Diary:
I went to a new bagel store in Brooklyn Heights1 with my son.
When it was my turn to order, I asked for a cinnamon raisin bagel with whitefish salad and a slice of red onion.2
The man behind the counter looked up at me.
“I’m sorry,” he said. “I can’t do that.”3
— Richie Powers
One of this item’s best qualities is that it is short and snappy. Only 53 words! Although we will use stories of up to 300 words, many don’t need to be that long and the column doesn’t work if we don’t have a mix of long, medium and short, so we are always looking for stuff like this. Here’s another one!
At Attention
Dear Diary:
It was December 1967. I had just finished basic training at Fort Dix in New Jersey and was traveling to Boston in uniform. For reasons I no longer recall, I stopped in New York City on the way.1
Walking on the Upper East Side2 in a snowstorm, I spied another man in a uniform. He was older, and his cap bore the familiar gold band that identified him as an officer.
I rendered a snappy salute. It was not returned. 3The uniform was unfamiliar, so I guessed he was a foreign officer. Military courtesy still required me to salute.
A little farther down the street, I encountered another officer and offered another salute that went unacknowledged.4 His uniform was strange to me as well.
The third time it happened, the man I saluted ignored me while holding the door for a couple 5on their way into a large apartment building.
I realized I had been saluting doormen.6
— Stephen Salisbury
To get your storytelling muscles going, think through or jot down the answers to some of these questions.
Let’s start with setting the scene.
- When and where in the city did this happen? Is this place well-known?
- Was there anything particular about that point in your life that’s relevant?
- What did you see, hear, smell? Was there something notable about the weather?
Now, let’s move to the middle, the meat of the story.
- Did you have an exchange with someone?
- What details are important to how events unfolded, especially in setting up the ending?
And now, the end.
- What’s the resolution? Is there a punchline?
- Does the story end with a sense of shared humanity or some other warm feeling that lingers? You don’t need to name it. A good description will often allow readers to feel it too.
- Why has this experience stayed with you?
- Lines like “and that’s why I love New York” are almost always unnecessary.
That’s it. Keep your story simple and use the kind of plain language you use in conversation. You are sketching a moment in time. The details are important. Let them move the story along. Have fun and good luck.
Once you’re done, read through what you’ve got. What details are less important and can be left out? (Remember, there is a strict 300-word limit.)
Write your Metropolitan Diary however you like, on paper, on your phone or wherever! When you’re happy with what you’ve written, put your diary entry into the box below, fill out your information and submit it. You might just hear from me about including it in a future column.
This is the official submission form, so make sure to double-check your work before hitting submit.
That’s it! Submit your Metropolitan Diary.
By transmitting your submission, you grant The New York Times Company a perpetual, royalty-free license to use the submission in any medium. They may be edited, and may be republished and adapted in all media. You may reprint your story elsewhere after it appears in The Times.
65.
In or about and between December 2023 and April 2024, both dates being approximate and inclusive, within the Eastern District of New York and elsewhere, the defendants MALIK BEASLEY, also known as “Beas,” “Bease,” “MB” and “5,” WILLIAM BROWN, also known as “Willo,” EDWARD DAVIS, also known as “Ed,” “ED” and “E Davis,” ROBERT GORODETSKY, also known as “Rob,” ERNESTO PLASCENCIA, also known as “Ernie,” “Erny,” “Ernie P” and “Erny P,” and PAOLO ZAMORANO, also known as “PZ,”
together with others, did knowingly and intentionally conspire:
(a)
to conduct one or more financial transactions in and affecting
interstate commerce, which transactions in fact involved the proceeds of specified unlawful activity, to wit: (i) wire fraud, in violation of Title 18, United States Code, Section 1343 and (ii) sports bribery, in violation of Title 18, United States Code, Section 224, knowing that the property involved in the transactions represented the proceeds of some form of unlawful activity, and with the intent to promote the carrying on of the specified unlawful activity, contrary to Title 18, United States Code, Section 1956(a)(1)(A)(i);
(b)
to conduct one or more financial transactions in and affecting interstate commerce, which transactions in fact involved the proceeds of some form of unlawful activity, to wit: (i) wire fraud, in violation of Title 18, United States Code, Section 1343 and (ii) sports bribery, in violation of Title 18, United States Code, Section 224, knowing that the property involved in the transactions represented the proceeds of some form of unlawful activity, and knowing that the transactions were designed in whole and in part to conceal and disguise the
19
How can people possibly afford to live in one of the most expensive cities on the planet? It’s a question New Yorkers hear a lot, often delivered with a mix of awe, pity and confusion.
We surveyed hundreds of New Yorkers about how they spend, splurge and save. We found that many people — rich, poor or somewhere in between — live life as a series of small calculations that add up to one big question: What makes living in New York worth it?
Weixun Hu enjoys what might sound like the ultimate professional perk. New Yorkers pay some of the country’s highest taxes on their income, more than $12,000 on average per person between state and local governments. But Mr. Hu’s income tax this year? $0.
That’s because Mr. Hu, 32, who was born in Guangzhou, China, conducts social development research at an international organization, where most employees are exempt from national income taxes or reimbursed for the cost. His gross and net income are one in the same; he earns roughly $110,000 after his insurance and pension contributions.
Mr. Hu became one of New York City’s 3.1 million foreign-born residents nearly three years ago, after reassignment from a post in Bangkok in the summer of 2023. But he quickly ran into a hurdle: finding an apartment with no credit history, no tax returns and no one to co-sign a lease.
“It sounds very cool that you don’t pay taxes,” Mr. Hu said. “It also creates a lot of problems.”
He discovered that many of his co-workers landed in a handful of pricey residential developments including Stuyvesant Town. Yet renting there felt worlds apart from Thailand’s capital city, where a luxury studio in a high-rise condo with a rooftop infinity pool and premium gym might run $600 per month.
So he found a studio in Long Island City, Queens, where he has in-unit laundry and falls asleep to the sound of waves hitting the shore near Hunters Point South. His employer subsidizes $700 of his $3,900 rent, and utilities and internet cost about $150 monthly.
“It’s much better value compared to renting in Manhattan,” he said.
Saving for Tomorrow
A good deal of young adults in New York City don’t know how to drive, and expect to remain renters for most of their lives. Not Mr. Hu.
He puts away $2,000 or so a month into a high-yield savings account, aspiring to buy a car. His sights are set on a Mazda CX-5. But he expects he’ll need to pay upfront in cash, another consequence of lacking a credit or tax history — and it’ll take about three more years to build up enough.
Eventually, he wants to own a home. “I know most people in New York City don’t care,” he said. “But for me, it’s very important.”
Mr. Hu also supports his parents in their retirement, sending about $3,000 every three months. As their only child, he feels both a sense of guilt for living about 8,000 miles from home — and an obligation to pay them back for their sacrifices.
“People will say, ‘Oh, you’re single. You don’t have a wife. You don’t have kids,’” he said. “‘So all your money is yours.’”
“And I’m like, ‘Excuse me, my parents are still alive.’”
In other ways, though, Mr. Hu fits the profile of an everyday bachelor: He rarely cooks meals at home. “My oven is basically storage space.”
Rather, he searches for affordable deals on Too Good To Go, a popular app where restaurants sell excess food at a discounted price. His No. 1 spot is Chinese Musician in Greenpoint, which offers a three-course meal for $9.
Sometimes, Mr. Hu does the $16 tonkotsu ramen at Nishida Sho-ten on 49th Street for lunch, an $8 lamb over rice meal for dinner from the halal truck in front of Bellevue Hospital or a hot dog for $3.25 from Gray’s Papaya. He’ll swing by the Dollar General in Astoria to stock up on his favorite drink, Coca-Cola Orange Cream.
And he saves up for an upscale dining experience every couple of months. He recently feasted at the Michelin-starred chef Daniel Boulud’s steakhouse, La Tête d’Or, where he spent roughly $300 and ordered what he called the standout filet mignon.
The Lions Over the Knicks
For any sports buff, it’s an incredible time to live in New York City.
But for Mr. Hu, ticket prices to see the Knicks play at Madison Square Garden felt “a little bit off-putting” — and that was even before their championship run. So he started religiously following basketball at Columbia, going to games that often run $10 to $12 on the Morningside Heights campus.
Yankees games, where a 400-level seat might run $45, are a no; he opts to watch the Columbia Lions up close at Robertson Field in Inwood without charge.
He is willing to spend up to about $300 on some singular sports showdowns. He can still recall how Kylian Mbappé flew down the field at MetLife Stadium during a Real Madrid match against Borussia Dortmund last summer.
Typically, though, he elects for low- or no-cost events like this spring’s edition of the Madison Avenue Gallery Walk.
And he regularly joins free lectures at the Asia Society, where he has a complimentary membership through his employer, and at local universities like N.Y.U., where he’s met the minds behind two of his favorite video games, The Elder Scrolls and Monument Valley.
A Sense of Wanderlust
Ever since Mr. Hu can recall, he’s felt a magnetic pull to experience the world. And few things embody such a yearning as aviation.
He sometimes goes to Canarsie to watch planes land at Kennedy International Airport, studying the way pilots pull up the nose of their aircrafts and slow the descent before touching down. He’s even found others who share his passion on walks in the neighborhood.
And traveling draws him even closer to his hobby.
He spent $4,400 on a trip to Guangzhou last June to fly for the first time in an Airbus A380, the only full-length double-deck aircraft in the world. Qatar Airways is one of the few airlines that still has an active fleet — so Mr. Hu arranged his trip by way of Doha.
“Some people treat it as bragging,” he said. “But no, it’s just to admire such an incredible machine that’s very rare to be seen these days.”
“It’s a weird, niche hobby, but I’m happy spending my money on it.”
As a young man living in his seventh country — after Belgium, China, Italy, Poland, Thailand and the United Kingdom — he appreciates that as “a foreigner in this city, you don’t have to worry about whether you stand out.”
He’s relished exploring from Crown Heights to Jackson Heights, taking the train to a random stop and popping into bodegas to chat up the owners. He considers Staten Island — and its Chinese Scholar’s Garden in Snug Harbor where adult admission costs $5 — to be a hidden gem.
And when he boarded the U.S.S. Bataan during a past Fleet Week, he felt obliged to tell a Marine that he was Chinese. “He said: ‘Oh, no worries at all. Everybody can be an American’.”
“To be honest, I still don’t think it’s a value option for the money,” Mr. Hu said of New York City. “But there’s something so unique, and I think it’s that inclusiveness.”
“You don’t need to go to the world,” he said. “The world comes to you.”
We are talking to New Yorkers about how they spend, splurge and save.
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