NEW YORK -- Donald Trump could be at risk of losing some of his prized properties if he can鈥檛 pay his staggering New York civil fraud penalty. With interest, he owes the state nearly US$454 million 鈥� and the amount is going up US$87,502 each day until he pays.
New York Attorney General Letitia James told ABC News on Tuesday that she will seek to seize some of the former president鈥檚 assets if he鈥檚 unable to cover the bill from Judge Arthur Engoron鈥檚 Feb. 16 ruling.
Engoron concluded that Trump lied for years about his wealth as he built the real estate empire that vaulted him to stardom and the White House. Trump denies wrongdoing and has vowed to appeal.
"If he does not have funds to pay off the judgment, then we will seek judgment enforcement mechanisms in court, and we will ask the judge to seize his assets,鈥� James, a Democrat, said in an interview with ABC reporter Aaron Katersky.
Trump鈥檚 ability to pay his mounting legal debts is increasingly murky after back-to-back courtroom losses. In January, a jury ordered him to pay US$83.3 million for defaming writer E. Jean Carroll.
Trump claimed last year that he has about US$400 million in cash 鈥� reserves that would get eaten up by his court penalties. The rest of his net worth, which he says is several billion dollars, is tied up in golf courses, skyscrapers and other properties, along with investments and other holdings.
But don鈥檛 expect James to try to grab the keys to Trump Tower or Mar-a-Lago immediately. Trump鈥檚 promised appeal is likely to halt collection of his penalty while the process plays out.
Here's a look at where things stand in the wake of Trump鈥檚 costly verdict.
Could the state really seize Trump鈥檚 assets?
Yes. If Trump isn't able to pay, the state 鈥渃ould levy and sell his assets, lien his real property, and garnish anyone who owes him money,鈥� Syracuse University Law Professor Gregory Germain said.
Seizing assets is a common legal tactic when a defendant can鈥檛 access enough cash to pay a civil penalty. In a famous example, O.J. Simpson鈥檚 Heisman Trophy was seized and sold at auction in 1999 to cover part of a IS$33.5 million wrongful death judgment against him.
Trump could avoid losing assets to seizure if he has enough cash 鈥� or is able to free up enough cash 鈥� to pay his penalty and mounting interest.
How much he has isn't clear because most information about Trump鈥檚 finances comes from Trump himself via his government disclosures and the annual financial statements that Engoron has deemed fraudulent.
Trump reported having about US$294 million in cash or cash equivalents on his most recent annual financial statement for the fiscal year ending June 30, 2021.
After that, according to state lawyers, he added about US$186.8 million from selling his Washington, D.C. hotel in May 2022 and the rights to manage a New York City golf course in June 2023. Part of Trump鈥檚 penalty requires that he give those proceeds to the state, plus interest.
Engoron鈥檚 decision last week spared Trump鈥檚 real estate empire from what the Republican front-runner deemed the 鈥渃orporate death penalty,鈥� reversing a prior ruling and opting to leave his company in business, albeit with severe restrictions including oversight from a court-appointed monitor.
James didn鈥檛 specify to ABC which of Trump鈥檚 assets the state might want to seize, though she noted that her office happens to be right across the street from a Trump-owned office building in Lower Manhattan that was the subject of some of the fraud allegations in her lawsuit.
鈥淲e are prepared to make sure that the judgment is paid to New Yorkers,鈥� James told ABC. 鈥淎nd yes, I look at 40 Wall Street each and every day.鈥�
How will an appeal affect Trump鈥檚 penalty?
With Trump promising to appeal, it's unlikely he'll have to pay the penalty 鈥� or face the prospect of having some of his assets seized 鈥� for a while. If he wins, he might not have to pay anything.
Under state law, Trump will receive an automatic stay if he puts up money, assets or an appeal bond covering the amount he owes. A stay is a legal mechanism halting enforcement of a court decision while the appeals process plays out.
鈥淓ven if we choose to appeal this 鈥� which we will 鈥� we have to post the bond, which is the full amount and some, and we will be prepared to do that,鈥� Trump lawyer Alina Habba told Fox News on Monday.
Trump鈥檚 lawyers can also ask the appeals court to grant a stay without obtaining a bond or with a bond for a lower amount.
In his Georgia election interference criminal case, Trump paid US$20,000 鈥� or 10 per cent 鈥� for a US$200,000 release bond. After losing at a first trial involving Carroll last year, Trump put US$5.55 million in escrow to cover the cost of the judgment while he appeals. He has said he would appeal the US$83.3 million January verdict but has yet to do so.
鈥淚f he can鈥檛 post a bond or meet the appellate division鈥檚 bonding requirements, then I would expect him to file bankruptcy to take advantage of the automatic stay on collection,鈥� Germain said. 鈥淏ut that鈥檚 a couple of chess moves away, so we will just have to see what happens.鈥�
Trump鈥檚 vow to appeal all but assures the legal fight over his business practices will persist into the thick 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 New York hush-money case, the first of his four criminal cases to go to trial.
Trump鈥檚 30-day window to appeal won鈥檛 start until the clerk at Engoron鈥檚 courthouse files paperwork making the verdict official. Engoron sent the paperwork to the clerk鈥檚 office Thursday, but it has yet to be filed. The judge rejected a request from Trump鈥檚 lawyer Clifford Robert asking for the enforcement of the penalty to be delayed 30 days 鈥済iven the magnitude鈥� of the judgment. Engoron, replying to the lawyer by email, said: 鈥淵ou have failed to explain, much less justify, any basis for a stay. I am confident that the Appellate Division will protect your appellate rights.鈥�
Does Trump really owe US$87,502 a day in interest?
With each passing day, Trump owes an additional US$87,502 in interest on his civil fraud penalty. By Thursday, that鈥檒l be an extra US$525,000 since the decision was issued on Feb. 16. The interest will continue to accrue even while he appeals. Barring court intervention or an earlier resolution, his bill will soar to a half-billion dollars by August 2025.
Trump鈥檚 underlying penalty is US$355 million, the equivalent of what the judge said were 鈥渋ll-gotten gains鈥� from savings on lower loan interest and windfall profits from development deals he wouldn鈥檛 have been able to make if he'd been honest about his wealth.
Under state law, he is being charged interest on that amount at an annual rate of nine per cent.
As of Wednesday, Trump owed just over US$99 million in interest, bringing his total to just under US$454 million 鈥� that鈥檚 US$453,981,779 to be exact, according to the Associated Press' calculations. Trump鈥檚 interest will keep accruing until Trump pays. Trump owes the money individually and as the owner of corporate entities that were named as defendants in James' lawsuit.
Engoron said the interest Trump owes on about half of the total penalty amount 鈥� pertaining to loan savings 鈥� can be calculated from the start of James鈥� investigation in March 2019. Interest on the remaining amount 鈥� which pertains to the sale of Trump鈥檚 Washington hotel and Bronx golf course rights 鈥� can be calculated starting in May 2022 or June 2023.
In all, Engoron ordered Trump and his co-defendants to pay US$363.9 million in penalties, or about US$464.3 million with interest. The total bill increases by US$89,729 per day, according to AP's calculations.
Trump鈥檚 sons, Eric and Donald Jr., must each pay about US$4.7 million, including interest, to the state for their shares of the Washington hotel sales. Weisselberg was ordered to pay US$1 million 鈥� for half of the US$2 million severance he鈥檚 receiving 鈥� plus about US$100,000 in interest.
Until they pay, Weisselberg is on the hook for another US$247 per day, while Trump鈥檚 sons each owe an extra US$990 per day, according to AP鈥檚 calculations.
