A New York state appeals court has overturned a substantial fraud penalty against former President Donald Trump, bringing relief to him and his legal team. The penalty, originally set at approximately $464.6 million, was imposed by a trial judge in February 2024 after finding that Trump had fraudulently inflated his wealth and the value of his properties. This ruling had been one of Trump’s significant legal challenges prior to his potential return to the White House.
The decision, issued by the Appellate Division in Manhattan, represents a setback for New York Attorney General Letitia James. Trump has long claimed that the civil fraud lawsuit was part of a politically motivated effort to undermine his chances for reelection. In a statement on social media, Trump celebrated the ruling as a “TOTAL VICTORY,” praising the court for its courage in dismissing what he termed an “unlawful and disgraceful decision.”
While the appeals court’s ruling is a significant development, the judges’ opinions were divided. Some judges affirmed Trump’s liability, stating that James had “vindicated a public interest” by initiating the lawsuit. However, they also deemed the financial penalty as unconstitutionally excessive. Other judges argued for a new trial, citing errors made during the initial proceedings, while a fifth judge called for outright dismissal of the case.
In February 2024, Judge Arthur Engoron had ordered Trump and co-defendants to pay penalties plus accruing interest. Trump bore nearly 98 percent of the financial burden, while his sons, Donald Trump Jr. and Eric Trump, along with former Trump Organization CFO Allen Weisselberg, were responsible for the remaining amount. Engoron criticized the defendants for their “complete lack of contrition and remorse,” characterizing their behavior as bordering on pathological.
The appeals court has temporarily suspended the financial penalties during the appeal process but has maintained certain restrictions on Trump’s businesses. These include a ban on applying for loans from banks registered in New York for three years and a two-year prohibition on Donald Trump Jr. and Eric Trump from managing the business.
James has indicated her intention to escalate the matter to the state’s highest court, the Court of Appeals, seeking a review of the case. She emphasized that yet another court has found that Trump violated the law and that the case holds merit.
This ruling comes amid ongoing investigations involving James by the U.S. Department of Justice, looking into possible mortgage fraud. The inquiry is part of a larger scrutiny surrounding governmental actions against individuals who have investigated or opposed Trump.
Despite the legal victories, Trump continues to face challenges. In May 2024, he was convicted on separate criminal charges related to hush money payments made to adult film actress Stormy Daniels, although he received no immediate punishment for that case.
As the legal saga unfolds, the implications of this decision may resonate beyond the courtroom, reflecting ongoing tensions in the political landscape as Trump seeks another presidential term while navigating a series of legal battles.
