The Excerpt: Trump hit with $453.5 million penalty in New York real estate fraud lawsuit

On Saturday's episode of The Excerpt podcast: Former President Donald Trump has been hit with a $453.5 million penalty in his New York real estate fraud lawsuit. USA TODAY Justice Department Correspondent Bart Jansen puts the ruling in context. A second Fani Willis hearing saw her father testify. Russian opposition figure Alexei Navalny has died. USA TODAY Breaking News and Education Reporter Zach Schermele has the latest from the Education Department's FAFSA headache. Marijuana is in legal limbo.

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Taylor Wilson:

Good morning. I'm Taylor Wilson and today is Saturday, February 17th, 2024. This is The Excerpt.

Today, Trump has been hit with a giant penalty in his New York real estate fraud lawsuit. Plus, we look at day 2 of Fani Willis hearings, and a major opposition leader in Russia has died.

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Former President Donald Trump and his namesake company have been hit with a massive penalty and a New York real estate fraud lawsuit. I caught up with USA Today Justice Department correspondent Bart Jansen for more on what the ruling means for Trump's business going forward. Bart, thanks for making the time.

Bart Jansen:

Thanks for having me.

Taylor Wilson:

Bart, a New York judge has made a decision on damages here for Donald Trump in the real estate fraud lawsuit. What did he ultimately decide?

Bart Jansen:

Well, this judge, Arthur Engoron, really brought down the hammer on Trump. He ordered Trump and his revocable trust to pay just north of $450 million in damages and interest. He found $354 million in damages from fraud from the various properties, and then added interest that started accruing from different points for the different properties of about 100 million more, so more than a total of $450 million. He also ordered each of his two sons who were running the company, Eric and Donald Trump Jr., to pay 4 million, and the former chief financial officer for the company, Allen Weisselberg, 1 million. It's an enormous verdict and a huge financial setback for the former president. And of course, Trump has said he will appeal. He's derided the case from the start.

Taylor Wilson:

And Bart, how exactly did we get to this point? What was Trump found to have done here?

Bart Jansen:

Engoron basically ruled that Trump the company and top executives were committing fraud repeatedly by overstating the value of their real estate properties and doing that to get better terms on loans and on insurance. Trump's reply was that there were no victims. The banks got repaid and that banks go into loan agreements with realtors with open eyes. They understand it's a big office building, what is the value of the office building. Well, Trump and his company provided estimates on the different values that the judge ruled were exorbitant, that they were unrealistic, unjustified. Trump contends that the banks should have known to take the numbers basically with a grain of salt. Engoron said their complete lack of contrition and remorse borders on pathological. Now, he said they didn't murder anyone. They didn't commit arson. But he said the defendants basically were incapable of admitting the errors of their ways.

Taylor Wilson:

Bart, what does this functionally mean now for the Trump business going forward?

Bart Jansen:

In addition to the financial order, Engoron ordered Trump not to do business in New York State for three years, and he ordered the two sons not to do business in New York State for two years. So experts and Trump himself have called that sort of decision a death penalty in terms of his business. He plans to appeal. We'll have to see how that appeal plays out and basically how the payments would work if it ever came to the point where he had to start making some of these payments. The judge kept in place a federal trustee who's been basically looking over the shoulder of the Trumps in how they manage the business for a couple of years now. She will remain in place for another three years under this order. If this judgment were to stand, it really prevents Trump from doing business in New York and it prevents his day-to-day oversight of his namesake company. So that's why it's called a death penalty.

Taylor Wilson:

And Bart, how big of a blow might this be for the personal finances of Donald Trump and his sons?

Bart Jansen:

Well, it's a second huge verdict for the former president. Of course, his overall worth is often disputed. He claims to be well into the billions, but a $350 million order would be an enormous setback to him. He also recently was ordered to pay a columnist, E. Jean Carroll, $83 million for defaming her again. In that case, he plans to appeal and claims he did not defame her. He's basically denying an allegation of sexual assault from the '90s, but she won the trial and then she won an enormous verdict. So together, it's well over $400 million combined in the two cases, an enormous financial setback if these judgments are to stand.

Taylor Wilson:

All right. Bart Jansen covers the Justice Department for USA Today. Thank you, Bart.

Bart Jansen:

Thank you.

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Taylor Wilson:

Perjury accusations and reports of death threats highlighted a second hearing in Georgia yesterday to determine if District Attorney Fani Willis will be disqualified from the trial of Donald Trump on election interference charges. At issue are the questions of whether Willis and Nathan Wade, the special prosecutor she hired for the case, should be removed because of their romantic relationship. Willis and Wade each took the witness stand this week, insisting the relationship had nothing to do with the case against Trump. Yesterday's action featured Willis's dad testifying about death threats from the time Willis was sworn in to her job. And defense lawyers accused Nathan Wade of perjury for denying his romantic relationship with Willis began before he was hired in November of 2021 to help prosecute Trump and 14 remaining defendants on charges of election interference. Fulton County Superior Judge Scott McAfee said he would not make any decisions this week.

Alexei Navalny has died in an Arctic circle maximum security prison, according to a Russian state media report yesterday. The prominent critic of Russian President Vladimir Putin previously survived a poisoning. Of his death, Russia's Federal Penitentiary Service said the 47-year-old felt unwell after going for a walk and almost immediately lost consciousness. His wife, Yulia Navalnaya, blamed the Kremlin and called for justice, saying, "We cannot believe Putin and his government." Some world leaders had similar comments. President Joe Biden said that what has happened is more proof of Putin's brutality.

Pres. Joe Biden:

As people across Russia and around the world are mourning Navalny today because he was so many things that Putin was not. He was brave. He was principled. He was dedicated to building of Russia where the rule of law existed and where it applied to everybody.

Taylor Wilson:

Navalny was a thorn in Putin's side for more than a decade, leading multiple investigations into the wealth of Putin and his inner circle. Navalny tried running for president in 2018, but was barred from the vote. Two years later, he was poisoned by a nerve agent while on a trip to Siberia. After he was treated in Germany, he then returned to Russia where he was immediately arrested. He's been detained on extremism and fraud charges that were widely viewed as retribution for his opposition to the Kremlin.

Stay tuned to the excerpt tomorrow when my colleague Dana Taylor sits down with USA Today Pentagon correspondent Tom Vanden Brook to look at Russia's possible shifting ambitions in Europe and beyond. You can find the episode right here on this feed. And on Monday's show, we'll take a closer look at Navalny's impact inside Russia and what his death means for opposition to Putin going forward.

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The Education Department is working to address delays with its overhaul of FAFSA or the Free Application for Federal Student Aid, and there could be remedies on Capitol Hill. I discussed the latest with USA Today Breaking News and Education reporter Zach Schermele. Zach, thanks for hopping on The Excerpt today.

Zach Schermele:

Thanks for having me, Taylor.

Taylor Wilson:

The Education Department is working to address delays with its overhaul of FAFSA. This is of course the Free Application for Federal Student Aid. Zach, what exactly has happened with these delays?

Zach Schermele:

If you've ever had a kid in college or will have a kid in college, you know what this is, the FAFSA, the Free Application for Federal Student Aid. It's an online form used by millions of American families and thousands of colleges each year. Students often with help from their parents fill it out with their financial information. They send it off to the government. The government sends their info to colleges, and then colleges say to students, "Hey, based on how much money your parents make or how many expenses your family typically has, this is what you can expect to pay for college."

The problem is the form has been running on a system that's in some cases older than some of the parents filling it out. So Congress passed legislation that was bipartisan in 2020 to overhaul the form and simplify it, potentially making hundreds of thousands of more lower income students eligible for financial aid. The changes were supposed to take effect last year, but the Education Department has struggled to implement them. The form was required by law to come out in December, but instead it was soft launched and only available for a few hours at a time. And even once that period ended, something we hear at USA Today first reported by the way, officials realized they weren't accurately adjusting family incomes to account for inflation. The Department fixed that issue, but said on the same day that colleges wouldn't start getting students information until weeks later than expected.

Taylor Wilson:

Zach, the Education Department is making some news this week on the FAFSA front. What are the latest developments here?

Zach Schermele:

Agency officials tell us they really are doing everything they can to catch up, but keep in mind all of these delays are compressing a six-month timeline into about a month and a half. Colleges won't have nearly as much time as they're used to to put together financial aid offers. So this week, the Department said it's going to be suspending some of what are called program reviews of schools, which the administration says will free up time for financial aid administrators to work on getting more offers out to students. I spoke to Under Secretary James Kvaal from the Education Department this week, and he said flat funding for his agency from lawmakers on Capitol Hill hasn't made things any easier. Take a listen to what he said.

Under Secretary James Kvaal:

This is really a massive undertaking. We talk about a new form, but it is a different eligibility. It's different terminology. We have redone computer systems across our entire operation, some of which are older than parents who are now filling out the FAFSA, and we've done all of that without the resources requested from Congress.

Taylor Wilson:

Zach, we've also seen a lot of stop-and-start action on Capitol Hill. You mentioned some of it. Is there anything Congress can do to make things easier for families right now?

Zach Schermele:

In the current college environment, the way that financial aid offers are written can really vary depending on the school a student attends or hopes to attend. For that reason, comparing offers from different schools can be a challenge for high school seniors or transfer students. But lawmakers from across the spectrum have indicated they support standardizing the terminology and some of the formatting requirements that colleges use.

So a bill was introduced by Republicans in Congress earlier this year that included a provision to do just that. The bill writ large is pretty controversial though, would take a machete to the federal student loan program. But if lawmakers stripped it into its own smaller bill, similar to one that was introduced last year, it could potentially ease some of the burdens families are seeing and enjoys a bit of support. Whether that'll happen in this Congress though, Taylor, is a totally different question. It's almost certainly too late to standardize financial aid forms this cycle, but it could make a big difference for folks next year.

Taylor Wilson:

All right. Zach Schermele covers Education and Breaking News for USA Today. Thanks as always, Zach.

Zach Schermele:

Thanks for having me, Taylor.

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Taylor Wilson:

Marijuana remains in a legal limbo across the country, and that's largely due to one organization, the Drug Enforcement Administration. The DEA has for decades maintained that marijuana is among the most dangerous drugs and has no medical value. That's despite growing state laws and medical evidence to the contrary. The results, pot is widely available in some states, heavily criminalized in others, and federally illegal everywhere. Experts and advocates say that in the absence of bold congressional action on marijuana, they're looking to the DEA to make the next move to change the nation's position on weed. The DEA is currently considering reclassifying the drug as a lower level controlled substance, though that still would not make it legal. And experts say that in order to eliminate a stark conflict between state and federal laws, marijuana would need to be removed from the Controlled Substances Act list altogether. Experts say there's a chance of that happening eventually, but that we're still a long ways off. You can read more with a link in today's show notes.

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And happy National Random Acts of Kindness Day, a chance to spread some kindness in your neck of the woods. Thanks for listening to The Excerpt. Dana Taylor will be in with Tom Vanden Brook tomorrow, and I'll see you Monday with more of The Excerpt from USA TODAY.

This article originally appeared on USA TODAY: The Excerpt: Trump hit with $453.5 million penalty in NY fraud lawsuit