Appeals Court Tosses $515M Fraud Penalty Against Trump/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ A New York appeals court has thrown out the $515 million civil fraud penalty against President Donald Trump, calling it “excessive.” The ruling lifts a major financial threat to Trump’s real estate empire but leaves other punishments pending. Attorney General Letitia James’ office had no immediate comment.
Trump Civil Fraud Appeal Quick Looks
- Appeals court strikes down Trump’s $515M civil fraud penalty.
- Judges call the fine an “excessive” Eighth Amendment violation.
- Original $355M penalty ballooned with interest to over $515M.
- Other sanctions, like Trump family leadership bans, remain paused.
- Case brought by NY Attorney General Letitia James.
- Trump posted $175M bond while appealing the penalty.
- Trump denies fraud, says financial statements were “lowball” estimates.
- Ruling leaves path open for New York’s highest court appeal.
- Decision comes seven months after Trump’s White House return.
- Case one of several legal battles facing Trump.
Deep Look: Appeals Court Overturns Trump’s Massive Civil Fraud Penalty
NEW YORK (AP) — President Donald Trump won a significant legal victory Thursday after a New York appeals court threw out the massive civil fraud penalty against him, concluding that the judgment violated constitutional protections against excessive fines.
The ruling, issued by a panel of five judges on the state’s Appellate Division, nullifies the more than $515 million Trump had been ordered to pay in New York’s civil fraud lawsuit. The decision removes a looming financial burden that threatened Trump’s real estate empire just months into his second term.
The Overturned Penalty
The case stemmed from findings by Judge Arthur Engoron, who ruled last year that Trump inflated his wealth on financial statements given to banks and insurers. Engoron imposed a $355 million penalty, which with interest swelled to more than $515 million. With additional penalties on Trump’s sons, Eric and Donald Jr., the total topped $527 million.
But the appeals court determined that the disgorgement order — requiring Trump to pay nearly half a billion dollars to the state — went too far.
“The court’s disgorgement order… is an excessive fine that violates the Eighth Amendment of the United States Constitution,” wrote Judges Dianne T. Renwick and Peter H. Moulton.
While the court struck down the financial penalty, it noted that other measures, such as temporary bans on Trump and his sons serving in corporate leadership, could still proceed depending on further appeals.
A Long Road to the Ruling
The appellate panel took an unusually long 11 months to decide, far longer than the typical few weeks or months for similar cases. During that time, Trump secured a $175 million bond to delay collection while pursuing his appeal.
The decision leaves open the possibility of further review by New York’s highest court, the Court of Appeals.
Attorney General’s Office Response
Attorney General Letitia James, who brought the lawsuit, had accused Trump of “lying, cheating, and staggering fraud.” Her office offered no immediate comment after Thursday’s ruling.
Trump and his defense team maintain that the lawsuit was politically motivated.
“I am an innocent man,” Trump declared during closing arguments in 2024. “This case was a fraud on me.”
Defense Arguments
Trump’s lawyers argued that his financial statements were not deceptive because they carried disclaimers noting they weren’t audited. Banks and insurers, they said, conducted their own evaluations and were repaid in full.
Even when evidence showed Trump tripled the size of his Trump Tower penthouse on paper, he claimed his statements were actually conservative estimates of his net worth.
Defense attorneys also argued the case improperly applied a consumer-protection law to private business transactions, which they said harmed no one.
Broader Legal Context
The civil fraud ruling was one of several legal cases shadowing Trump as he campaigned for and reclaimed the presidency:
- Hush Money Case: In January, Trump was sentenced to an unconditional discharge — a conviction left on record without jail, fines, or probation. He is appealing.
- E. Jean Carroll Lawsuits: A federal appeals court upheld a $5 million judgment against Trump for sexual abuse and defamation, and another jury awarded Carroll $83.3 million for additional defamation claims. Appeals are ongoing.
The fraud penalty, however, stood out as Trump’s most serious financial threat — until now.
What Happens Next
Though Trump avoided the half-billion-dollar penalty, New York’s attorney general may still pursue further appeals. The court’s decision also doesn’t erase findings that Trump engaged in fraud, only that the financial punishment was disproportionate.
For Trump, the ruling provides a political and financial reprieve at a time when his administration has moved aggressively to investigate critics like James and other officials.
Whether the case resurfaces at New York’s top court or not, the appeals court’s decision represents a major win for Trump in his long-running legal battles.
You must Register or Login to post a comment.