NEW YORK: A judge ruled on Friday that Donald Trump must pay $354.9 million in penalties for fraudulently overstating his net worth to dupe lenders, handing the former US president another legal setback in a civil case that imperils his real estate empire.

Justice Arthur Engoron also banned Trump from serving as an officer or director of any New York corporation for three years.

Engoron cancelled his prior ruling from September ordering the “dissolution” of companies that control pillars of Trump’s real estate empire, saying on Friday that this was no longer necessary because he is appointing an independent monitor and compliance director to oversee Trump’s businesses.

In the ruling, Engoron wrote that Trump and the other defendants in the case “are incapable of admitting the error of their ways”.

“Their complete lack of contrition and remorse borders on pathological,” Engoron wrote. “Instead, they adopt a ‘See no evil, hear no evil, speak no evil’ posture that the evidence belies.”

The lawsuit brought by New York Attorney General Letitia James accused Trump and his family businesses of overstating his net worth by as much $3.6 billion a year over a decade to fool bankers into giving him better loan terms. Trump’s lawyer Alina Habba said in a statement that the ruling was a “manifest injustice” and “culmination of a multi-year, politically fuelled witch hunt” against him.

“This is not just about Donald Trump — if this decision stands, it will serve as a signal to every single American that New York is no longer open for business,” Habba said, adding that she plans to appeal.

Trump and his adult sons, Donald Jr and Eric, were defendants in the case. Donald Jr and Eric Trump were each ordered by the judge to pay $4m.

Trump has denied wrongdoing and called the case a political vendetta by James, an elected Democrat. Trump is expected to appeal Friday’s ruling by Engoron.

The civil fraud case could deal a major blow to Trump’s real estate empire as the businessman-turned-politician leads the race for the Republican nomination to challenge Democratic President Joe Biden in the Nov 5 election. Engoron had previously ruled in September that Trump had engaged in fraud and ordered his business empire be partially dissolved.

Defiant testimony

During defiant and meandering testimony in November, Trump conceded that some of his property values were inaccurate, but insisted banks were obligated to do their own due diligence.

He used his court appearances as impromptu campaign stops, delivering incendiary remarks to reporters and insisting his enemies are using the courts to prevent him from retaking the White House.

Published in Dawn, February 17th, 2024