A New York appeals court has overturned a $500 million civil fraud penalty against US President Donald Trump, ruling that while he and his company were liable for fraud, the fine imposed last year was excessive.
The decision was handed down by the New York Supreme Court’s Appellate Division, which found that the penalty, originally set at $355m but expanded to more than half a billion dollars with interest, violated constitutional protections against excessive punishment. Judge Peter Moulton noted that harm had occurred, but it was not the kind of “cataclysmic harm” that justified such a large award to the state.
The case is rooted in the accusations made by Attorney General of New York Letitia James, arguing that Trump, along with his company and two of his children, repeatedly inflated property values in financial statements to secure loans. Judge Arthur Engoron, in September 2023, found Trump accountable for fraud, citing examples such as misstating the size of his Trump Tower penthouse. A separate trial that took place in 2024 determined the penalties, which included both financial and non-financial restrictions.
While the appeals court struck down the monetary fine, it upheld several of Engoron’s other penalties, including a three-year ban preventing Trump from serving as a company director or applying for loans from banks in New York. The Attorney General’s Office said the decision on the penalty would be appealed to the state’s highest court, the New York Court of Appeals, and stressed that the ruling reaffirmed Trump’s liability for fraud.
Reactions to the judgment were mixed. On his Truth Social platform, Trump described the outcome as a “total victory” and said the case had been a politically motivated attempt to damage his business. His son, Eric Trump, also celebrated the decision on social media, saying that “justice prevailed” after years of legal battles.
Legal scholars have suggested that the appeals panel, which issued a 323-page opinion, appeared divided on the merits of the case and was effectively deferring the final decision to the Court of Appeals. Business law experts said the judgment amounted to “kicking the can down the road,” as the ultimate outcome of James v Trump now rests with the higher court.
