In the New York case brought by that state’s Attorney General Letitia James alleging a years-long pattern of fraud at the Trump family business, presiding Judge Arthur Engoron recently told the Trumps’ team that a penalty termed disgorgement — meaning fines in response to violative profits — is possible.
And it’s not a far-fetched possibility. Engoron himself is the one deciding the outcome at this stage, and he’s already found Trump to have perpetrated fraud, though there were remaining claims and questions to examine at trial, which is ongoing. Disgorgement, it seems, would seemingly cover the entirety of the Trump profits connected to any business moves deemed in this case to be in violation of the relevant state standards, so there could be a large amount of money at issue here and under legal threat. “For reasons this court has explained ad nauseam, that view is simply incorrect,” Engoron said Tuesday. “Disgorgement is a clearly available remedy.”
The judge issued that reminder amid reported discussions in court about the testimony that ended up taking place the next day of an expert witness for the state. This testifying witness shared estimates of the potential profits that financial institutions dealing with Trump lost because of utilizing interest rates lower than what James’ side contends would have been the interest rates most appropriately tied to the Trumps’ actual financial condition. And that estimate was large, which could set up large financial penalties on the named Trumps. The individual who was testifying, Michiel McCarty, claimed banks lost out on $168 million in profits from interest tied to just four properties in the Trump brand!
Engoron also pointed in the earlier discussions before that witness took the stand to apparent testimony indicating that key figures would, in fact, have made different decisions in financially dealing with Trump if they were what James contends would have been more accurately informed. “Several witnesses have testified that they would have acted differently had they known the statements of financial condition were fraudulent,” the judge said.
Trump’s various defenses inside and outside the courtroom have included a contention that disclaimers included with some such claims of value should shield him from consequences, but the judge already specifically rejected these disclaimers as insufficient.
