A retired judge overseeing Donald Trump’s New York companies will not punish him for transferring $40 million without her permission, a financial attorney has said.
The payments include $5.5 million to the woman that Trump was found to have sexually assaulted in a Manhattan dressing room, E. Jean Carroll.
Former U.S. District Court Judge Barbara Jones said in an email on Wednesday that Trump should have notified her of the transfers from his companies, which are at the center of Trump’s New York fraud trial. The email was sent to Judge Arthur Engoron, the judge presiding over the trial.
The transactions include a transfer of $29 million to Trump, which Jones said was used for tax payments. The other transfers in question were used for insurance premiums, as well as a $5.5 million payment related to the civil suit brought against Trump by Carroll.
In May, a New York court ordered Trump to pay Carroll $5 million for sexually assaulting her in the dressing room of a Manhattan department store in the mid-1990s. Part of the payment was for defamatory comments Trump made about her after she took her lawsuit against him.
Newsweek reached out to Trump’s attorney via email for comment on Friday.
Paul Golden, a partner at New York law firm Coffey Modica LLP, told Newsweek that Jones “appears to believe the transfers were made for legitimate purposes: tax payments, insurance premiums, and to an attorney escrow account” and that she would likely not sanction the former president.
Engoron ruled that Trump had used fraudulent evaluations of his corporations’ assets to obtain bank loans and to boost his public prestige. Engoron then ordered that the corporations be stripped of their business licenses—ending their right to trade. Jones was then appointed to oversee the corporations that own Trump Tower in Manhattan, the Mar-a-Largo estate in Florida, several New York golf courses and other major Trump properties.
Reviewing the documents in the case, Golden said that Jones had set up a “review protocol” through which Trump was supposed to notify her of $5 million transfers from the companies, which have been placed in a court-approved trust.
“In an April 11, 2023 email to the court, which was e-filed, Hon. Jones indicated that ‘I have established a Materiality Threshold and Review Protocol that has been accepted by the parties and is being submitted for the Court’s review,’ he said.
“Based on Hon. Jones’s November 29, 2023 email, one of the terms of the Materiality Threshold document was that defendants were obligated to “provide notice when entities within the Trust make transfers outside of the Trust with an aggregate value in excess of $5 million.
“It appears that Hon. Jones was indicating in that recent email that there were indeed transfers over that sum without notice. Hon. Jones further indicated that in response, she ‘clarified’ to defendants that ‘all transfers of assets out of the Trust exceeding $5 million must be reported,'” Golden said.
“Hon. Jones does not appear to be suggesting that defendants should be sanctioned if there was a breach of the Materiality Threshold document. This may be because Hon. Jones appears to believe the transfers were made for legitimate purposes: tax payments, insurance premiums, and to an attorney escrow account.”
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New York attorney Colleen Kerwick agreed that Jones likely saw that Trump was not trying to move assets to escape potential financial penalties in his fraud trial.
“The purpose of a fiscal monitor is to ensure that there was no dissipation of assets to defeat a potential future judgment. While there was an oversight with respect to noticing three transfers of funds in ten months above the materiality threshold to the monitor, those transfers transpired to be for legitimate purposes—tax payments, premiums and to an attorney escrow account, respectively. Moving forward, Trump has to disclose all transfers above the materiality threshold ($5M in aggregate) to the monitor,” Kerwick told Newsweek.
Trump, his two eldest sons, Donald Trump Jr. and Eric Trump, as well as the Trump Organization, are co-defendants in the $250 million civil fraud trial brought by New York Attorney General Letitia James. She is accusing Trump of inflating his net worth by billions of dollars to obtain benefits such as better bank loans and reduced tax bills.
The former president has pleaded not guilty and denies any wrongdoing. Trump has repeatedly said that the litigation was politically motivated to derail his 2024 presidential campaign, given that he is the front-runner for the Republican nomination.
In September, Engoron ruled that Trump, his adult sons, their businesses and executives committed fraud in their property valuations. The court will decide on six other accusations, including falsifying business records, insurance fraud and conspiracy claims.
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