Trump faces a $370m fine in New York fraud trail. How will he pay it?

The future of Donald Trump’s family business may be decided on Friday when a New York judge is expected to deliver a verdict in his civil fraud trial.

The former president, his adult sons and his namesake company have already been found liable for fraudulently inflating the value of assets in statements to lenders.

Prosecutors have asked the judge to fine Mr Trump $370m (£291m) and to put restrictions on his ability to conduct business in the state.

That’s a lot of money, even for a billionaire. Legal experts told the BBC that a penalty that large, coupled with a potential final verdict that may greatly impact his real estate empire, could deliver a serious blow to Mr Trump’s finances.

“He’s not going to suddenly become working class,” said former federal prosecutor Diana Florence. “But it’s just going to be a lot of cash. His fortune will be significantly reduced.”

The New York Attorney General Letitia James told the court that $370m was the appropriate amount the Trumps should pay in disgorgement, a financial penalty that involves paying back the money gained through fraudulent means.

She calculated the sum based on three factors: money Mr Trump allegedly earned in interest rate savings on loans due to misstating his assets; “bonuses” paid to Trump Organization employees who participated in the scheme; and profit realised from two property deals that Ms James alleges were obtained fraudulently.

It is up to Judge Arthur Engoron to determine the financial penalties when he delivers his ruling.

Whatever the amount, Mr Trump would also have to pay annual interest on that fine, dating back several years to when the alleged offences took place. New York’s 9% interest rate means Mr Trump might have to pay an additional nine-figure sum on top of the penalty.

Mr Trump denies committing fraud and says there was no crime because the banks made money on his investments. He is expected to launch an appeal, which would put the verdict on hold until a higher court reviews the case.

But if he wants to avoid paying the fine or have personal assets seized while the appeal process plays out, he still has to deposit the full amount to be held by the court within 30 days.

One calculation from Forbes Magazine put Mr Trump’s total net worth at $2.6bn. The New York Attorney General’s Office estimated his annual net worth at $2bn in 2021.

Based on those estimates, a penalty of $370m would cost Mr Trump roughly 15-18% of his wealth.

On top of this looming penalty, however, he already owes the writer E Jean Carroll $83.3 million in damages from a separate defamation case that concluded in January. His legal fees are also mounting as he battles four criminal cases at the federal and state level.

These combined financial burdens may constitute more cash than Mr Trump has available. Legal experts say he has several potential options.

To avoid paying everything upfront, Mr Trump could try to secure a bond – a third-party guarantee that he can pay the full fine. That would cost him many more millions, with added interest and fees. He would also likely be required to put up collateral.

To secure a bond from a bonding company, a person typically needs to put up about 10% of the total amount owed, Steven Cohen of the New York Law School explained.

So if Mr Trump owed $370m in disgorgement, he might have to pay a bond company $37m (£29m) to issue the bond. And he will not get that fee back.

In a deposition in this case, Mr Trump said he had $400m in cash on hand (the BBC could not verify that sum independently). With his other legal liabilities and fees, however, that would not be enough to cover a new $370m fine.

“He’s got to think about what to do with his assets, how to perhaps liquidate businesses to come up with that money,” said Sarah Kristoff, a former federal prosecutor.

Much of Mr Trump’s fortune is tied to his real estate ventures. Forbes found his New York real estate empire to be valued at $490m (£384m) including his flagship condominium skyscraper, Trump Tower, worth $56m (£44m) by the outlet’s count.

His portfolio includes many other properties around the country, with golf courses, condominium towers, hotels and even a winery.

“Something is going to have to be sold or realised in order to get the money to pay for that kind of cost,” said William Thomas, a professor at the University of Michigan Ross School of Business.

Mr Trump may also turn to the massive fundraising engine he uses to pay his tens of millions in legal fees. According to the New York Times, 10% of every dollar that is raised from his supporters goes to pay for his defence in his civil and criminal trials.

He has used two political action committees – Save America, which has been his primary vehicle for legal fees, and Make America Great Again, which funds his presidential bid – to raise money to cover the costs of these trials, even though such structures are typically used for political purposes. These entities are separate from his official presidential campaign account.

Between his first indictment in March of 2023 to the end of the year, his Save America political action committee spent nearly $40m on lawyers and other related fees, Forbes calculated.

Under federal campaign finance rules, Mr Trump could potentially use Save America to pay a court-ordered penalty, said Shanna Ports, a senior counsel at the Campaign Legal Center. He would not be allowed to make this payment with official campaign funds, she added.

But fundraising might not be practical in Mr Trump’s case anyway, attorneys told the BBC.

A large penalty would “create a real cash-flow crunch for him to come up with nine figures in cash in very short order,” said former federal prosecutor Michel Epner. He added it would be an extraordinary amount to fundraise from his supporters in a brief time period.

According to filings with the Federal Election Commission, his Save America PAC started the new year with $5m in cash on hand.

Mr Trump will only get a clearer picture of what this means for his business and personal fortune when Judge Engoron delivers his final ruling. But no matter how he chooses to pay, any major penalty will likely cause serious financial headaches for the former president.

“Trump, for all of his misrepresentations and lies about his wealth, really is a wealthy person,” said Mr Thomas, the business professor. “But most people don’t have $400m lying around.”