Trump’s New York civil fraud penalty swells by $24M before court showdown

The financial burden facing former President Donald Trump continues to escalate rapidly. As he fights against a substantial $454 million civil fraud ruling issued by a Manhattan judge, interest has been accumulating at an alarming rate of $1 million every nine days. This rising cost reflects the ongoing appeal process that Trump has engaged in since the judgment was finalized back on February 23.

As of Thursday, the total amount he owes to the state of New York is expected to increase by $24 million due solely to post-judgment interest. This added financial penalty is significant, especially when considering that previous settlements from 2016 related to Trump University fraud cases totaled only $25 million.

When Trump’s attorneys, led by D. John Sauer, present their appeal arguments in court, the total debt to the New York attorney general’s office is projected to reach $478 million. This figure will continue to climb as Trump defends himself against the state’s findings, which accused him of inflating the value of his assets by billions over the course of a decade.

Judge Arthur Engoron, who has presided over this case for more than five years, expressed the gravity of the situation stating, “The frauds found here leap off the page and shock the conscience.” This reflects the court’s stance on the severity of Trump’s financial discrepancies.

In his defense, Trump has consistently denied any wrongdoing, claiming the judgment is unwarranted, legally flawed, and excessively punitive. The stakes are incredibly high for him: should he succeed in overturning the ruling—whether at the state appellate level or in federal court—he could not only nullify the financial judgment but also eliminate the severe non-monetary penalties associated with the case.

These non-monetary penalties would impose significant restrictions on Trump’s business operations. After the trial, the judge ordered an initial cash judgment amounting to $355 million, which increased to $454 million once the retroactive interest and a 9% annual interest rate were applied. Winning the appeal would mean Trump could avoid ongoing scrutiny from a court-appointed financial overseer who has been monitoring his business practices since late 2022.

Additionally, if the appeal succeeds, Trump would no longer be subjected to the extensive oversight that includes having a compliance director reviewing all major decisions regarding financial management. The ruling also includes a two-year ban for Trump, along with his sons Donald Jr. and Eric, from running Trump Organization or any business within New York, as well as a three-year prohibition preventing Trump and his companies from applying for loans through any New York-based financial institution.

Another financial element to consider is the $175 million bond that Trump had to post to block the attorney general’s actions temporarily. If granted a favorable ruling, he would reclaim that bond along with accrued interest, which exceeds a million dollars.

On the contrary, a failure to overturn the ruling would have dire consequences. The appeal process, which is currently in motion, has provided a temporary reprieve from the penalties, with the exception of the ongoing oversight over the Trump Organization. However, if Trump exhausts his appeals without success, those penalties will become enforceable.

Moreover, the total debt owed to New York could approach half a billion dollars if the appeals process extends into the Spring of 2025, and the amounts would become immediately payable if he loses the appeal.

As he navigates this challenging legal landscape, the implications of the final ruling remain substantial and could potentially reshape Trump’s business empire in New York.

Source: Business Insider