Appeals Court Overturns $500 Million Penalty Against Trump in Fraud Case

New York, NY – A New York appeals court has overturned a $500 million penalty imposed on President Donald Trump and other defendants in a civil fraud case. The decision, issued Thursday, declared the monetary fine as “excessive” and in violation of the Eighth Amendment.

The ruling by the Appellate Division of the First Department addressed the civil lawsuit initiated by New York Attorney General Letitia James. In February 2024, Manhattan Supreme Court Judge Arthur Engoron found Trump liable for business fraud, ordering him to pay approximately $454 million in penalties due to inflated valuations of his assets.

According to the court, the calculated fine had grown with interest, exceeding half a billion dollars. However, the appellate judges determined that the penalty was excessive, stating, “While harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half billion-dollar award to the State.”

Eric Trump, the president’s son and one of the defendants, celebrated the ruling, terming it “total victory” in what he called a “sham” case. Alina Habba, Trump’s former attorney, described the judgment as politically motivated and legally baseless.

In a previous ruling, Engoron had outlined instances of misrepresentation by Trump and his co-defendants. He noted that Trump’s penthouse value was claimed to be three times its actual size, and that Trump’s Mar-a-Lago estate was incorrectly valued as a personal residence.

Thursday’s ruling allows either side to appeal further to the New York Court of Appeals. James’s office stated that the ruling did not change the underlying liability of the defendants.

The appeal court’s decision did uphold non-monetary penalties against Trump, indicating that the case against him would continue without the substantial financial punishment.