A New York appeals court on Thursday threw out Donald Trump’s civil fraud penalty in a major win for the president and his family, even as another appeal is anticipated.
State Judge Arthur Engoron last year found Trump and his sons Donald Trump Jr. and Eric Trump and their business liable for business fraud and falsifying records in order to qualify for favorable loans. Trump was ordered to pay more than $350 million in penalties, a figure that has ballooned with interest to $527 million.
But a divided five-judge panel concluded that the punishment was “excessive.” New York Attorney General Letitia James vowed to appeal, while Trump praised the ruling in a post on Truth Social, thanking the court for “having the Courage to make this Decision.”
Judge Peter H. Moulton wrote in one of the opinions that shaped the court’s ruling: “While the injunctive relief ordered by the court is well crafted to curb defendants’ business culture, the court’s disgorgement order, which directs that defendants pay nearly half a billion dollars to the State of New York, is an excessive fine that violates the Eighth Amendment of the United States Constitution.”
Trump has repeatedly lambasted the judgment against him, saying he is innocent. His lawyers have argued that the financial statements were not “deceptive” as they have been characterized, because it was disclosed they were unaudited.
James, one of Trump’s most vocal political foes, began investigating the case in 2020 and announced the lawsuit against Trump at a news conference in 2022.
The Justice Department recently launched a federal grand jury investigation into James over the investigation, saying Trump was possibly deprived of his legal rights. A lawyer for James said the investigation into her investigation “has to be the most blatant and desperate example of this administration carrying out the president’s political retribution campaign.”
The DOJ is also separately investigating James, as well as two other Democrats — Sen. Adam Schiff, D-Calif., and Federal Reserve Governor Lisa Cook — over alleged mortgage fraud. (James, Schiff and Cook have all denied any wrongdoing.)
But it’s not over for Trump yet. The case can be appealed to New York’s highest court, the Court of Appeals.
