In a significant legal development, a New York state appeals court has overturned a fraud penalty of approximately $464.6 million against former President Donald Trump. The ruling, issued by the Appellate Division in Manhattan, marks a considerable victory for Trump, who previously faced this penalty as one of his most critical legal challenges while eyeing a return to the White House.
The civil fraud case, brought forth by New York Attorney General Letitia James, alleged that Trump had fraudulently inflated his wealth and the value of his properties to benefit his family business. In February 2024, a trial judge found Trump liable and imposed the hefty penalty, which included interest that continued to accrue. Trump has consistently denied any wrongdoing, with his legal team arguing that any inaccuracies in financial statements did not harm any lenders or business partners.
The recent decision from the five-judge appeals panel was notably divided. Some judges concurred that Trump should be held liable for his actions, while others suggested a new trial or outright dismissal of the case. Following the ruling, Trump declared the outcome a “TOTAL VICTORY” on social media, expressing gratitude towards the court for what he deemed an unlawful decision being overturned.
James, however, indicated plans to request a review from the New York Court of Appeals, the state’s highest court. She stated, “It should not be lost to history: yet another court has ruled that the president violated the law, and that our case has merit.”
In a separate legal matter, Trump was convicted in May 2024 on criminal charges related to payments made to adult film actress Stormy Daniels, yet he faced no penalties from that ruling. The appeals court’s decision on the fraud case encompassed around 320 pages of opinions, revealing a complex judicial stance. Two judges affirmed that James acted in the public interest by pursuing the lawsuit but deemed the initial penalty excessively punitive.
Another pair of judges acknowledged James’s authority to file the suit but determined that errors in the trial proceedings warranted a new trial. The fifth judge opined that the case should be dismissed entirely.
The ruling arrives amidst an investigation by the U.S. Department of Justice into James for potential mortgage fraud, a probe that some view as politically motivated against those who have scrutinized or opposed Trump.
In the initial judgment, Judge Arthur Engoron had imposed various restrictions on Trump and his organization, including a three-year ban on applying for loans from banks registered in New York. Furthermore, he restricted Trump’s sons, Donald Trump Jr. and Eric Trump, from operating in the business for two years. The appeals court has suspended these restrictions while the case is under review but has allowed a court-appointed monitor to continue overseeing the Trump Organization’s operations.
As the legal landscape continues to evolve, both Trump’s supporters and opponents will be closely watching the next steps in this high-profile case.
