Former President Donald Trump’s $83.3 million punishment for defaming E. Jean Carroll may not have hurt him in the polls, but it has put a spotlight on how much money the Republican front-runner has and how much more he may lose this week when a judgment is expected in the civil fraud case brought by New York Attorney General Letitia James.
James has asked that Trump and his family be banned from doing business in New York and be forced to pay $370 million in ill-gotten gains after State Supreme Court Judge Arthur Engoron ruled last year that Trump had committed fraud in sending 11 years of inflated estimates of his net worth to Deutsche Bank and others. The inflated estimates helped Trump get lower interest rates.
In addition to the $83.3 million a New York jury ordered Trump to pay Carroll on Friday, as well as the $370 million the former president is looking at in his fraud trial, Engornon may go a step further and order Trump to be stripped of control over his companies, which includes his famous Fifth Avenue headquarters. He could also have his businesses dissolved.
While that won’t bankrupt Trump, it would arguably make a sizable dent in his wallet and pose a financial threat that Trump hasn’t faced in decades.
“This is basically a death penalty for a business,” Columbia University law professor Eric Talley said. “Is he getting his just desserts because of the fraud or because people don’t like him?”
A New York Times review of Trump’s financial records and interviews with those closest to him show that an unfavorable ruling may force him to sell various assets to stay afloat.
“The enterprise that is Trump isn’t going to be taken down by a bunch of criminal cases,” Steven M. Cohen, a former federal prosecutor and top official in the attorney general’s office who now teaches corporation law at New York Law School, said. “The enterprise that is Trump is going to be picked apart by these civil cases, and at some point, there is a risk of collapse.”
When contacted by reporters, Trump spokesman Steven Cheung did not specify how Trump plans to pay for the penalties but reiterated Trump had built a “tremendously successful, unparalleled business” before being elected to the White House.
On Sunday, Trump took to social media to attack James’s claims he had inflated his net worth multiple times over.
“I AM WORTH MUCH MORE THAN THE NUMBERS SHOWN ON MY FINANCIAL STATEMENTS,” he wrote.
Trump has been using money from a political action committee to pay for the bulk of his legal fees in the criminal cases against him, and even though some campaign finance experts say he could use it to help fund Carroll’s $83.3 million civil judgment, it would only cover a fraction of it.
He’ll likely have to open up his wallet for the rest.
In a deposition last year for the civil fraud case, Trump stated he had $400 million in cash available, though that has not been independently verified. His family business, because it is privately held, does not have to file public reports on its fiscal health with regulators.
When it comes to the fraud trial, he may have to sell a significant chunk of his portfolio or other assets, the New York Times reported.
The paper pointed to a memo prepared by Trump’s longtime CFO Allen Weisselberg when Trump entered the White House. In it, Weisselberg showed the Trump Organization had only $60 million in cash, which included $26 million that was off limits because it was tied up in a partnership. While Trump was in office, company stats shown to lenders revealed he had $75 million to $93 million in cash and “cash equivalents.”
Since then, the company has sold some assets, including a lease he controlled at his hotel in Washington, as well as the operating license at his golf club in the Bronx. The Trump Organization also inked new deals with foreign partners, including a Saudi-backed golf venture and a Saudi-based real estate company.
It is unclear what his company has done with that money, whether it is in a bank account, invested in the stock market, or was used to fund some of Trump’s other businesses, which have suffered chronic losses.
Despite the multimillion-dollar judgment Trump is facing for the fraud allegations, the judge could also order the former president’s real estate empire “dissolved.” If that happens, Trump will join a short list of those who have been slapped with the ultimate punishment for violating New York’s anti-fraud law.
The Associated Press did a deep dive into nearly 70 years of civil cases that revealed the harsh penalty has been imposed only a dozen times. If Trump’s empire is shut down, it would be the only large company that has been forced to dissolve without showing obvious victims and major losses.
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In addition to the civil suits, Trump has been charged with 91 criminal offenses in four criminal prosecutions.
He has denied wrongdoing across the board.
