April 24, 2024

New York AG says it will seize Trump’s property if he can’t pay the fine

Donald Trump could risk losing some of his valuable assets if he cannot pay his staggering civil fraud fine in New York. With interest, he owes the state nearly $454 million — and the amount will rise by $87,502 every day until he pays up.

New York Atty. Gen. Letitia James told ABC News on Tuesday that she will seek to seize some of the former president’s assets if he fails to pay the bill from Judge Arthur Engoron’s Feb. 16 ruling.

Engoron concluded that Trump lied about his wealth for years as he built the real estate empire that took him to stardom and the White House. Trump denies wrongdoing and has promised to appeal.

“If he does not have the money to pay off the judgment, we will pursue mechanisms in court to enforce the judgment, and we will ask the judge to seize his assets,” James said in an interview with ABC reporter Aaron Katersky.

Trump’s ability to pay his mounting legal debts is growing murkier after back-to-back courtroom losses. In January, a jury ordered him to pay $83.3 million for defaming writer E. Jean Carroll.

Trump claimed last year that he has about $400 million in cash — reserves that would be eaten up by his legal penalties. The rest of his wealth, which he estimates to be several billion dollars, is tied up in golf courses, skyscrapers and other properties, along with investments and other assets.

But don’t expect James to immediately try to grab the keys to Trump Tower or Mar-a-Lago. Trump’s promised appeal will likely halt collection of his sentence while the trial plays out.

Here’s a look at where things stand after Trump’s costly verdict.

Could the state really seize Trump’s assets?

Yes. If Trump can’t pay, the state could “seize and sell his assets, seize his real estate and seize anyone who owes him money,” said Gregory Germain, a law professor at Syracuse University.

Seizing assets is a common legal tactic when a suspect does not have enough cash to pay a civil fine. In one famous example, OJ Simpson’s Heisman Trophy was seized in 1999 and sold at auction to cover part of a $33.5 million wrongful death judgment against him.

Trump could avoid losing assets to seizure if he has enough money — or can free up enough money — to pay his fine and rising interest.

How much he has is not clear because most of the information about Trump’s finances comes from Trump himself, through his government statements and the annual financial statements that Engoron has deemed fraudulent.

Trump reported having approximately $294 million in cash or cash equivalents in his most recent financial statements for the fiscal year ending June 30, 2021.

Then, according to state attorneys, he added about $186.8 million to the sale of the lease for his Washington hotel in May 2022 and the rights to manage a golf course in New York City in June 2023. Part of the sentence Trump requires that he donate those proceeds to the state, plus interest.

Engoron’s decision last week spared Trump’s real estate empire from what the Republican frontrunner considered the “death penalty for corporations,” reversing an earlier ruling and opting to keep his company in business, albeit with strict restrictions, including oversight of a court-appointed supervisor.

James did not specify to ABC which Trump assets the state might want to seize, though she noted that her office is right across the street from a Trump office building in Lower Manhattan that was the subject of some of the fraud . allegations in her lawsuit.

“We are prepared to ensure that the judgment is paid to New Yorkers,” James told ABC. “And yes, I watch 40 Wall Street every day.”

How will an appeal impact Trump’s sentence?

With Trump vowing to appeal, it’s unlikely he’ll have to pay the fine for a while — or face the prospect of having some of his assets seized. If he wins, he might not have to pay anything.

Under state law, Trump will receive an automatic reprieve if he posts money, assets or an occupational bond to cover the amount he owes. A stay is a legal mechanism that stops the enforcement of a court decision while the appeal process is ongoing.

“Even if we choose to appeal this – which we will – we have to pay the bail, which is the full amount and part of it, and we will be prepared to do that,” Trump attorney Alina told reporters. Habba told Fox News on Monday.

Trump’s lawyers could also ask the appeals court to grant a stay without bail or with bail set for a lesser amount.

In his criminal case against election interference in Georgia, Trump paid $20,000 – or 10% – for a $200,000 bond. After losing in an initial trial involving Carroll last year, Trump has put up $5.55 million in escrow to cover the costs of the verdict while he appeals. He has said he would appeal the January judgment, worth $83.3 million, but has not yet done so.

“If he is unable to post bail or comply with the bail department’s requirements, then I expect him to file for bankruptcy to take advantage of the automatic stay of collections,” Germain said. “But that’s still a few chess moves away, so we’ll just have to see what happens.”

Trump’s vow to appeal all but ensures that the legal battle over his business practices will continue into the middle of the presidential primary season as he tries to clinch the Republican nomination in his quest to retake the White House.

The appeal is also likely to overlap with his criminal trial next month in his hush money case in New York, the first of his four criminal cases to go to trial.

Trump cannot yet appeal because the clerk of the Engoron courthouse must first file paperwork to make the verdict official. Once that happens, Trump has 30 days to appeal and have the sentence suspended or paid. Trump’s lawyers argued Wednesday with state attorneys and the judge over what should be on that paperwork. Trump attorney Cliff Robert told Engoron in a letter late Wednesday that he wants the execution of the sentence to be postponed for 30 days “to allow for an orderly post-judgment process, especially given the magnitude of the judgment.”

Does Trump really owe $87,502 a day in interest?

With each passing day, Trump owes another $87,502 in interest on his civil fraud penalty. On Thursday, that will be an additional $525,000 since the decision was issued on February 16. Interest will continue to accrue even if he appeals. Barring court intervention or an earlier resolution, his bill will increase to half a billion dollars by August 2025.

Trump’s underlying fine is $355 million, the equivalent of what the judge said were “ill-gotten gains” from savings on lower interest rates and windfalls from development deals that he would not have been able to make if he had been honest about his wealth.

Under state law, he will be charged 9% annual interest on that amount.

As of Wednesday, Trump owed just over $99 million in interest, bringing his total to just under $454 million — that’s $453,981,779 to be exact, according to Associated Press calculations. Trump’s interest will continue to grow until Trump pays up. Trump is owed the money individually and as the owner of business entities named as defendants in James’ lawsuit.

Engoron said the interest Trump owes on about half of the total fine amount – relating to savings – can be calculated from the start of James’ investigation in March 2019. The interest on the remaining amount – which relates to the sale of Trump’s Washington hotel and Bronx golf course rights — could be calculated as of May 2022 or June 2023.

In total, Engoron ordered Trump and his co-defendants to pay $363.9 million in fines, or about $464.3 million with interest. According to AP’s calculations, the total bill will increase by $89,729 per day.

Trump’s sons, Eric and Donald Jr., must each pay about $4.7 million, including interest, to the state for their share of Washington hotel sales. Weisselberg was ordered to pay $1 million — for half of the $2 million severance package he receives — plus about $100,000 in interest.

Until they pay, Weisselberg must pay another $247 per day, while Trump’s sons each owe an additional $990 per day, according to the AP’s calculations.

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