Trump held in contempt, fined $10K a day until he complies with probe

[April 26, 2022]  By Luc Cohen and Karen Freifeld

(Reuters) -A New York judge on Monday held former President Donald Trump in contempt of court for not producing documents subpoenaed in the state attorney general's civil probe of his business practices, and ordered Trump to be fined $10,000 per day until he complies.

Trump lost a bid to quash a subpoena from state Attorney General Letitia James, and then failed to produce all the documents by a court-ordered March 3 deadline, later extended to March 31 at his lawyers' request.

Justice Arthur Engoron ruled that a contempt finding was appropriate because of what the judge called "repeated failures" to hand over materials and because it was not clear Trump had conducted a complete search for responsive documents.

"Mr. Trump ... I know you take your business seriously, and I take mine seriously. I hereby hold you in civil contempt," the judge said, although Trump himself was not in the courtroom.

Trump intends to appeal the contempt ruling, said his attorney Alina Habba. "We respectfully disagree with the court's decision," Habba said in a statement.

Should Trump fail to pay the fine, he could be jailed, according to Sarah Krissoff, a New York lawyer not involved in the case, though she said such a scenario was unlikely and the judge could opt for other remedies such as increasing the amount of the fine.

James is investigating whether the Trump Organization, the former president's New York City-based family company, misstated the values of its real estate properties to obtain favorable loans and tax deductions.

She has said the more than three-year-old probe found "significant evidence" that the company included misleading asset valuations in its financial statements for more than a decade.

"Today's ruling makes clear: No one is above the law," James said in a statement on Monday.

Trump, a Republican, denies wrongdoing and has called the investigation politically motivated. James is a Democrat.

The attorney general has questioned how the Trump Organization valued the Trump brand, as well as properties including golf clubs in New York and Scotland and Trump's own penthouse apartment in Midtown Manhattan's Trump Tower.

Former President Donald Trump speaks to his supporters during the Save America Rally at the Sarasota Fairgrounds in Sarasota, Florida, U.S. July 3, 2021. REUTERS/Octavio Jones

Also on Monday, Engoron granted a motion by James' office to compel real estate firm Cushman & Wakefield to comply with certain subpoenas. Cushman conducted appraisals for several Trump Organization properties.

Trump and two of his adult children, Ivanka and Donald Jr., also were subpoenaed and ordered to provide testimony to the attorney general. An appeal is pending for the testimony.

COERCION, NOT PUNISHMENT

Andrew Amer, special litigation counsel with the attorney general's office, said during the hearing that the $10,000-a-day fine was meant to coerce Trump into complying with the subpoena, not punish him.

Habba told the judge that Trump did indeed comply with the subpoena, but that he did not have any documents responsive to James' request. Engoron said she would have to submit a detailed affidavit about her search of Trump's records in order to be in compliance with the subpoena.

Such an affidavit would need to show that Trump's team had conducted a diligent search for documents, said Halim Dhanidina, a former California judge now practicing as a lawyer.

"The court's not going to just take someone's word for it," Dhanidina said.

The Trump Organization's property valuations are also the subject of a criminal probe in Manhattan, which last year led to the indictment of the company's chief financial officer.

Manhattan District Attorney Alvin Bragg said this month that probe is ongoing despite the departure of its two top lawyers.

(Reporting by Luc Cohen and Karen Freifeld; editing by Jonathan Oatis, Noeleen Walder and Howard Goller)

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