A New York appeals court has delivered a significant victory to United States President Donald Trump, throwing out a civil fraud penalty that would have cost him and his business associates nearly half a billion dollars.
The court’s ruling cited the Eighth Amendment of the US Constitution, which prohibits the government from imposing excessively harsh penalties on its citizens.
The case originated from a civil suit filed by New York Attorney General Letitia James, who alleged that Trump had inflated his financial records to secure advantages with insurance companies, banks, and other financial institutions.
In February 2024, a lower court ordered Trump to pay $355 million in penalties, which grew to approximately $515 million due to accumulating interest.
The appeals court judges were divided over the merits of the lower court’s ruling but agreed that the penalty was excessive.
Judges Dianne T. Renwick and Peter H. Moulton wrote, “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.”
The initial decision was made by Judge Arthur Engoron, a Democrat, who found that “the frauds found here leap off the page and shock the conscience.”
Engoron expressed frustration over Trump’s refusal to answer questions and acknowledge misrepresentations in his financial documents.
He wrote, “Their complete lack of contrition and remorse borders on pathological. They are accused only of inflating asset values to make more money. The documents prove this over and over again. This is a venial sin, not a mortal sin.”
Trump and his co-defendants, including his sons Eric Trump and Donald Trump Jr, were dealt a combined financial penalty totaling approximately $527 million, including interest.
Trump has repeatedly denied wrongdoing in various legal cases. In 2023, a jury found him liable for sexual abuse and defamation in a case involving writer E. Jean Carroll, awarding her $5 million.
A second defamation suit resulted in an $83.3 million damages award, both of which Trump continues to appeal.
Trump also faced four criminal indictments and became the first president to be convicted of a felony, with 34 counts of falsifying business records. He continues to appeal this case.