Friday, August 22, 2025 - A New York appeals court has overturned the nearly $500 million civil fraud penalty against President Donald Trump but upheld findings that he and his company committed fraud.
The Thursday ruling, which was split among the judges,
removes the substantial financial judgment while allowing the case to continue
through further appellate review. New York Attorney General Letitia James has
vowed to appeal the decision to the state’s highest court.
In their opinion, the judges wrote:“While the injunctive
relief ordered by the court is well crafted to curb defendants’ business
culture, the court’s disgorgement order … is an excessive fine that violates
the Eighth Amendment of the United States Constitution.”
The ruling eases Trump’s financial liability, reducing the
pressure from a February 2024 judgment that initially set a $354 million fine,
which had grown to nearly $500 million with interest. Previously, Trump was
required to post a $175 million bond to pause collection during the appeals
process—funds he is now set to recover pending further legal proceedings.
Despite voiding the penalty, the court affirmed that Trump,
his company, and two of his children were liable for fraud, citing years of
inflated financial statements to mislead lenders and insurers.
James maintained that the core of her case was validated:
“Yet another court has ruled that the president violated the law, and that our
case has merit,” she said.
Trump celebrated the decision, calling it a “total victory”
and characterizing the case as politically motivated. His legal team echoed the
sentiment, describing the ruling as proof the original penalty was “grossly
excessive.”
The civil case, brought by James in 2022, alleged systemic
inflation of property values to secure favorable financing. The appeals panel
issued multiple opinions in a 322-page decision, with some judges suggesting
retrial while others found it unnecessary.
Further appeals are expected, meaning
the final outcome remains unresolved.
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