NEW YORK (AP) — President Donald Trump expressed triumph following a New York appeals court decision to annul a civil fraud penalty that could have cost him in excess of half a billion dollars. Yet, this ruling isn’t conclusive, as New York Attorney General Letitia James has committed to appealing to the state’s highest court.
Despite this development, Trump still faces other consequences from the lawsuit, such as the prohibition on him and his two eldest sons from holding corporate leadership roles for several years. Trump has the option to appeal these sanctions as well.
Excessive Fines Overturned by Appeals Court
A panel of five judges in New York’s mid-level Appellate Division revoked the substantial monetary penalty imposed on Trump, while partially affirming a lower court’s conclusion that he, his company, and co-defendants committed fraud by inflating his wealth on financial documents used to obtain loans and negotiate deals.
“While harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half billion-dollar award,” stated two of the judges. The penalty, initially set at $355 million and later increasing to over $515 million with interest, was deemed to breach the U.S. Constitution’s prohibition on excessive fines. Additional monetary penalties against Trump’s co-defendants, including his sons Eric and Donald Trump Jr., were also dismissed.
Fraud Allegations and Court Findings
Attorney General James sued Trump in 2022, accusing him of inflating his net worth by billions on financial documents and consistently misleading banks and others about the value of key assets like golf courses, hotels, Trump Tower, and Mar-a-Lago.
Judge Arthur Engoron ruled last year following a trial that James had demonstrated Trump’s involvement in a prolonged scheme with company executives to mislead banks and insurers concerning his wealth and assets. “The frauds found here leap off the page and shock the conscience,” Engoron mentioned in February 2024.
James Intends to Appeal
James announced her plan to challenge the Appellate Division’s decision in the State’s highest court, the Court of Appeals. Although the Appellate Division judges agreed that Trump’s monetary penalty was excessive, convincing the Court of Appeals to restore the fine could be challenging.
Trump may also choose to contest the court’s decision on the fraud finding. His lawyers have yet to provide a comment.
Potential Refund of Bond Money
Trump had not paid the hefty fine imposed by the lower court, which means no significant financial transactions will occur. However, he is now eligible to reclaim the $175 million bond posted to delay collection during the appeal. These bonds are commonly used in appeals to ensure payment.
If the Appellate Division had upheld the penalty, Trump would have been accountable for the entire amount. Now, unless reversed by the Court of Appeals, he and his co-defendants owe nothing.
Remaining Implications for the Trumps
While the monetary punishment was negated, other sanctions remain. These include a two-year prohibition on Trump’s sons, Eric and Donald Jr., from holding director or officer roles in any New York company, effectively removing them from managing the Trump Organization’s daily operations.
Additionally, Trump faces a three-year ban on holding corporate leadership positions in New York and a similar duration ban on his companies obtaining loans from New York-registered banks. These measures, paused during the appeal process, can be extended by court order pending further appeals.
Possibility of a New Trial
The Appellate Division judges were split on whether another trial is necessary. The possibility of a retrial, with Trump or his legal representatives back in a Manhattan courtroom, was among several contentious topics in the judges’ 323-page opinions.
Judges John Higgitt and Llinét Rosado argued for a new trial due to Judge Engoron’s failure to adhere to an earlier Appellate Division order to exclude allegations barred by the statute of limitations.
Conversely, Judges Dianne Renwick and Peter Moulton deemed the idea of another trial impractical while Trump is president, describing the task of reconstructing extensive testimony and documents as “Sisyphean and unneeded.” They suggested this would likely render the case obsolete.
Judge David Friedman alone contended that the case should have been dismissed outright, questioning James’ authority under state law to bring Trump to court over private business dealings when no involved parties claimed deception.
“Plainly, her ultimate goal was not ‘market hygiene’ … but political hygiene, ending with the derailment of President Trump’s political career and the destruction of his real estate business,” Friedman wrote. “The voters have obviously rendered a verdict on his political career,” he continued. “This bench today unanimously derails the effort to destroy his business.”
