Trump's NY Fraud Case Victory Tees Up Likely Appeal Amid Ongoing Liability

A New York court threw out a $464 million penalty against Donald Trump in a civil fraud lawsuit, but he is still liable for fraud and faces other sanctions. Trump declared the ruling a "total victory," but his lawyer may appeal to remove the stain of liability. The court's decision left in place a temporary ban on Trump and his sons serving as corporate officers in New York and a requirement for the Trump Organization to submit its finances to an independent monitor.

A New York state appeals court has overturned a $464 million civil fraud penalty imposed on former President Donald Trump and the Trump Organization, ruling the fine was unconstitutionally excessive. The decision, which narrowly upheld a finding that Trump engaged in fraud by exaggerating his wealth for decades, still bans him and his two eldest sons from serving in corporate leadership for a few years. The court's ruling came seven months after Trump returned to the White House.

The appeals court, divided on the case's merits and the trial judge's fraud finding, threw out the financial judgment but left the door open for further appeals to New York's highest court. The court's decision, which took 11 months to release after hearing oral arguments last fall, upheld the fraud finding but vacated the financial judgment, leaving Trump and his sons still liable for fraud.

The penalty had been ordered in February 2024 by Justice Arthur Engoron after a three-month non-jury trial. Engoron found that Trump had fraudulently inflated asset values to obtain favorable terms from lenders and insurers. The civil trial was part of a broader legal challenge against Trump, which also included a separate criminal prosecution by Manhattan District Attorney Alvin Bragg.

The appeals court's ruling, which was sharply worded and totaled more than 300 pages, noted that while Engoron's restrictions on Trump's business practices were "well crafted," the monetary punishment was excessive under the Eighth Amendment of the United States Constitution. The court's decision to vacate the penalty leaves Trump and his sons still subject to other sanctions, including a temporary ban on serving as corporate officers in New York and a requirement for the Trump Organization to submit its finances to an independent monitor.

Trump and his sons celebrated the ruling, with Eric Trump posting on X that "Total victory in the sham NY Attorney General case!!! After 5 years of hell, justice prevailed!" However, New York Attorney General Letitia James has indicated that her office plans to appeal the ruling, with no indication as to when the appeal will be filed or how long the case would take to decide.

The ruling comes as the Trump administration faces ongoing legal challenges, including a federal investigation into James and her office. The civil fraud case and the criminal prosecution by Bragg have been part of a broader effort to hold Trump accountable for alleged financial misconduct and political interference.

References:
[1] https://www.newsweek.com/letitia-james-responds-after-trumps-nyc-civil-fraud-penalty-overturned-2117204
[2] https://www.capitalbrief.com/briefing/new-york-appeals-court-overturns-trumps-us500m-civil-fraud-penalty-cd51eeaa-5268-4911-86ef-4c280e4fa25a/
[3] https://www.newsweek.com/trump-new-york-appeals-court-fraud-net-worth-2117092