A New York judge on Friday handed Donald J. Trump a crushing defeat in his civil fraud case, finding the former president liable for conspiring to manipulate his net worth and ordering him to pay a penalty of $355 million that could wipe out his entire stockpile of cash.
The decision by Justice Arthur F. Engoron caps a chaotic, yearslong case in which New York’s attorney general put Mr. Trump’s fantastical claims of wealth on trial. With no jury, the power was in Justice Engoron’s hands alone, and he came down hard: The judge delivered a sweeping array of punishments that threatens the former president’s business empire as he simultaneously contends with four criminal prosecutions and seeks to regain the White House.
Not only did Justice Engoron impose a three-year ban preventing Mr. Trump from serving in top roles at any New York company, including his own, but the judge also applied that punishment to the former president’s adult sons for two years and ordered that they pay more than $4 million each. One of the sons, Eric Trump, is the Trump Organization’s de facto chief executive, and the ruling throws into doubt whether any member of the family can run the business in the near term.
Mr. Trump will appeal the financial penalty — which could climb to $400 million or more once interest is added — but will have to either come up with the money or secure a bond within 30 days. The ruling will not render him bankrupt, because most of his wealth is tied up in real estate.
Mr. Trump will also most likely ask an appeals court to halt the restrictions on him and his sons from running the company while it considers the case.
But there might be little Mr. Trump can do to thwart one of the judge’s most consequential punishments: extending for three years the appointment of an independent monitor who will be the court’s eyes and ears at the Trump Organization, watching for fraud and second-guessing transactions that look suspicious.
Mr. Trump’s lawyers have railed against the monitor, Barbara Jones, saying that her work has already cost the business more than $2.5 million; the decision to extend her oversight of the privately held family company could enrage the Trumps, who see her presence as an irritant and an insult.
The attorney general, Letitia James, had sought those consequences and more, asking for Mr. Trump to be permanently barred from New York’s business world. In the 2022 lawsuit that precipitated the trial, she accused Mr. Trump of inflating his net worth to obtain favorable treatment from banks and other lenders, attacking the foundation of his public persona as a billionaire businessman.
Even though the lenders made money from Mr. Trump, they were the purported victims in the case, with Ms. James arguing that absent his fraud, they could have made even more. The financial penalty reflects those lost profits, with nearly half of the $355 million — $168 million — representing the interest that Mr. Trump saved, and the remaining sum representing his profit on the recent sale of two properties, money that the judge has now clawed back.
Before the trial began, Justice Engoron ruled that the former president had used his annual financial statements to defraud the lenders, siding with the attorney general on her case’s central claim. The judge’s Friday ruling ratified almost all of the other accusations Ms. James had leveled against Mr. Trump, finding the former president liable for conspiring with his top executives to violate several state laws.
The judge’s decision for now grants Ms. James, a Democrat, a career-defining victory. She campaigned for her office promising to bring Mr. Trump to justice, and sat calmly in the courtroom during the trial as the former president attacked her, calling her a corrupt politician motivated solely by self-interest.
Her win is Mr. Trump’s second major courtroom loss in two months, following a January jury verdict in a defamation case brought by E. Jean Carroll, a writer whom he was found liable of sexually abusing. The jury penalized him $83.3 million.
And the civil fraud ruling comes as Manhattan prosecutors are set to try Mr. Trump on criminal charges late next month. He is also contending with 57 other felony counts across three other criminal cases.
But none of his legal troubles seem to have anguished Mr. Trump quite like the fraud case. During the trial, he protested its premise, pleading, “This has been a persecution of somebody that’s done a good job in New York.”
This is a developing story and will be updated.