A New York appeals court has overturned the nearly $500 million civil fraud penalty against President Donald Trump but upheld the findings that he and his company committed fraud.
The Thursday ruling, issued by a split panel of judges, eliminates the substantial financial penalty while allowing the case to proceed through further appellate review. New York Attorney General Letitia James has pledged to appeal the decision to the state’s highest court.
In their opinion, the judges stated: “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 significantly reduces Trump’s financial liability, easing pressure from a February 2024 judgment that initially imposed a $354 million fine, which had grown to nearly $500 million with accrued interest. Trump was previously required to post a $175 million bond to halt collection during the appeals process—funds he is now set to recover pending further legal action.
Although the penalty was voided, the court reaffirmed that Trump, his company, and two of his children were liable for fraud, citing years of inflated financial statements designed to mislead lenders and insurers.
Attorney General James insisted that the core of her case remains intact: “Yet another court has ruled that the president violated the law, and that our case has merit,” she said.
Trump hailed the decision as a “total victory,” describing the case as politically motivated. His legal team called the ruling evidence that the original penalty was “grossly excessive.”
The civil case, brought by James in 2022, alleged systemic inflation of property values to obtain favorable financing. The appeals panel issued multiple opinions in a detailed 322-page decision, with some judges suggesting a retrial and others deeming it unnecessary.
Further appeals are expected, leaving the final outcome unresolved.
