A New York appeals court has thrown out the hefty civil fraud penalty against former U.S. President Donald Trump, ruling Thursday in the state’s high-profile lawsuit that accused him of exaggerating his net worth.
The decision comes more than half a year after Trump left office. According to KTVH, a five-judge panel of the Appellate Division found the earlier judgment — which could have cost Trump over $515 million and jeopardized his real estate holdings — to be “excessive.”
Judge Arthur Engoron had ruled last year that Trump misrepresented his financial statements to lenders and insurers, ordering him to pay $355 million in penalties. With accumulated interest, the figure had surpassed $515 million.
Including fines levied against Trump’s sons, Eric and Donald Jr., the total obligations under the lower court’s order had risen above $527 million.
In their opinion, Judges Dianne T. Renwick and Peter H. Moulton wrote: “While the injunctive relief ordered by the court is well crafted to address defendants’ business culture, the disgorgement order directing payment of nearly half a billion dollars to the State of New York is an excessive fine in violation of the Eighth Amendment.”
Engoron had also imposed restrictions barring Trump and his two eldest sons from holding executive roles in companies for several years. These provisions were paused during the appeal, allowing Trump to defer immediate payment by posting a $175 million bond.
The appellate panel, while divided over the underlying fraud claims, completely vacated Engoron’s penalties but left the door open for the case to be reviewed by New York’s highest court, the Court of Appeals.
The Appellate Division took nearly 11 months to issue its decision after hearing oral arguments last fall — a far longer period than the usual few weeks or months such appeals typically require.
Attorney General Letitia James, who brought the case on behalf of the state, had accused Trump of “lying, cheating, and staggering fraud.” Her office did not immediately comment on Thursday’s ruling.
Trump and his co-defendants have repeatedly denied any misconduct.
Following the lengthy trial that ended in January 2024, Trump described himself as “an innocent man,” calling the lawsuit “a fraud on me.” He insisted the case was politically driven by James and Engoron, both of whom are Democrats.
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