New York appeals court overturns nearly $454 million civil fraud penalty against Trump and the Trump Organization, upholding fraud findings but ruling the punishment excessive
A New York appeals court on the First Department of the Appellate Division threw out the nearly half-billion-dollar civil fraud penalty imposed last year on former President Donald Trump, his family, and the Trump Organization. While the court affirmed that the defendants engaged in a decade-long scheme of inflating asset values to secure favorable deals, it ruled that the $454 million sanction was excessive and inconsistent with constitutional limits.
The panel said the documentary record supports the state attorney general’s showing that each defendant participated in the fraudulent scheme and that the individual defendants acted with the intent to defraud. However, the court indicated that, although harm did occur, it did not rise to the level that would justify a penalty approaching half a billion dollars. As a result, the court remanded the case for possible retrial or further proceedings regarding penalties, and left open the path for either side to appeal to New York’s highest court, the Court of Appeals.
Trump’s side framed the decision as awin. Former Trump attorney Alina Habba called the ruling a “resounding victory” for the president and the business, arguing that the original penalty was politically motivated and legally unfounded. She noted that the appellate ruling rejects the extraordinary size of the penalty while leaving intact the finding of fraud, setting the stage for further appellate action if pursued.
Engoron’s 2023 ruling found that Trump and his co-defendants inflated asset values to obtain better financing and business terms. Specific examples cited in the decision included overstating the size of Trump’s penthouse and valuing the Mar-a-Lago estate as a personal residence rather than a social club, misrepresentations the judge described as shocking and without remorse. The decision also referenced Trump’s broader legal and business strategy as part of a longstanding pattern of alleged misstatements to gain advantage in deals.
The appeals court’s decision comes as Trump faces a separate defamation judgment tied to an E. Jean Carroll case and other civil actions that, together, bring total civil liabilities cited in some records to more than $550 million. Lawyers for James have argued that the civil proceedings should continue independently of Trump’s ongoing political and personal considerations.
This is a developing story. Check back for updates as the case moves toward potential further appeals or resolutions.
Summary
– New York appellate court overturned the nearly $454 million civil fraud penalty against Trump and the Trump Organization, while upholding that fraud occurred.
– The court said the penalty was excessive but did not overturn the finding of fraud, leaving room for further appeals.
– Trump and his lawyers called the ruling a victory and criticized the original penalty as politically motivated.
– The case may proceed to higher court or be subject to further legal action regarding penalties.
Additional context and possible implications
– The ruling narrows the punitive impact of the original judgment but maintains the possibility of future action to determine appropriate sanctions or penalties.
– Courts continue to weigh civil fraud claims against Trump tied to asset valuations and business practices, which could influence ongoing civil disputes and corporate governance scrutiny.
– The decision may affect how similar fraud-related penalties are calculated in New York civil cases, prompting potential changes in strategy for both plaintiffs and defendants in high-profile corporate litigation.
– The political dynamic surrounding Trump’s other legal battles remains a backdrop to how these civil actions are perceived publicly and in the court of public opinion.