The fate of Donald Trump’s family business hangs in the balance as a New York judge is expected to announce the verdict in his civil fraud trial on Friday.
The former president, along with his adult sons and the family’s company, has already been held responsible for inflating asset values fraudulently in statements provided to lenders. Prosecutors are urging the judge to impose a $370 million (£291 million) fine on Mr. Trump and enforce restrictions on his business activities within the state.
This substantial financial penalty, coupled with a potential verdict that could severely impact his real estate empire, poses a significant threat to Mr. Trump’s financial standing. While he may not face a sudden descent into the working class, legal experts suggest that such a hefty penalty could substantially diminish his fortune.
Former federal prosecutor Diana Florence commented on the potential impact, stating, “He’s not going to suddenly become working class, but it’s just going to be a lot of cash. His fortune will be significantly reduced.”
In court, New York Attorney General Letitia James argued that the Trumps should pay $370 million in disgorgement, a financial penalty intended to recover gains obtained through fraudulent means. This amount was calculated based on three factors: alleged interest rate savings on loans due to misstating assets, “bonuses” given to Trump Organization employees involved in the scheme, and profits from two property deals accused of being fraudulently acquired by James.
The responsibility of determining the financial penalties rests with Judge Arthur Engoron, who will deliver the ruling. Regardless of the final amount, Mr. Trump would be obligated to pay annual interest on the fine, dating back several years to the time of the alleged offenses. With New York’s 9% interest rate, this could result in an additional nine-figure sum added to the penalty.
Mr. Trump, maintaining his innocence, denies committing fraud and contends that no crime occurred as the banks profited from his investments. Anticipating an appeal, he aims to have the verdict put on hold until a higher court reviews the case.
To evade paying the fine or prevent the seizure of personal assets during the ongoing appeal process, Mr. Trump must still deposit the entire amount with the court within a 30-day timeframe. While the $370 million penalty is substantial, it may not be financially ruinous for the former president.
Estimates from Forbes Magazine place Mr. Trump’s total net worth at $2.6 billion, with the New York Attorney General’s Office estimating his annual net worth at $2 billion in 2021. Based on these figures, the $370 million penalty would represent approximately 15-18% of his wealth.
In addition to this impending penalty, Mr. Trump is already facing a separate financial obligation – owing $83.3 million in damages to writer E Jean Carroll from a concluded defamation case in January. Coupled with mounting legal fees associated with battling four criminal cases at the federal and state levels, these combined financial challenges may pose a considerable strain on Mr. Trump’s available cash. Legal experts suggest he has several potential options to navigate this financial predicament.
