New York Court Overturns $515 Million Fraud Penalty Against Trump

A New York appellate court has overturned a civil fraud penalty of $515 million imposed on former President Donald Trump, declaring the judgment unconstitutional. The ruling, issued by a split five-judge panel of the New York Appellate Division, First Judicial Department, criticized the penalty as excessive and a violation of the Eighth Amendment.

The case stemmed from allegations by New York Attorney General Letitia James, who accused Trump of inflating his personal wealth to secure favorable loan terms. Judge Arthur Engoron initially ordered Trump to pay $354 million, plus an additional $100 million in interest, leading to a total penalty of $515 million after interest accrued. Trump had posted a $175 million bond in April 2024 while appealing the ruling.

In their decision, Judges Dianne T. Renwick and Peter H. Moulton stated, “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.”

Moulton acknowledged that while the Supreme Court found Trump liable, the penalty imposed was disproportionate. He noted, “The immense penalty in this case is troubling. How do you tether the amount that was assessed by the Supreme Court to the harm that was caused here where parties left these transactions happy?”

The ruling comes nearly 11 months after legal arguments were presented. Trump’s legal team had argued that the case constituted a “clear-cut violation of the statute of limitations.”

Justice David Friedman, one of the dissenting judges, expressed skepticism about the Attorney General’s authority to bring the case, stating, “I find it remarkable that… a three-justice majority of this five-justice panel believe that the judgment in favor of the Attorney General should not stand, as [James] has not carried her burden of proving a violation of the statute.”

The case has drawn bipartisan criticism, with former Democratic New York Governor Andrew Cuomo suggesting that the prosecution was politically motivated. Cuomo remarked, “If his name was not Donald Trump, and if he wasn’t running for president, I’m telling you that case would have never been brought, and that’s what is offensive to people.”

CNN political commentator Jonah Goldberg also criticized the prosecution, calling it “a mistake” and describing it as “very political.”

The decision to overturn the penalty has significant implications for Trump as he campaigns for the 2024 presidential election. The ruling may alleviate some legal burdens that could have impacted his candidacy.

The case has highlighted ongoing debates about the intersection of law and politics, particularly regarding high-profile figures like Trump. Critics argue that the legal actions against him are part of a broader strategy to undermine his political ambitions.

As the legal landscape continues to evolve, Trump’s team remains vigilant in challenging various legal actions, asserting that they are politically motivated and lack merit. The appellate court’s ruling marks a notable victory for Trump amid ongoing legal battles as he seeks to regain the presidency in the upcoming election.