A New York appeals court has overturned the nearly $500 million civil fraud penalty against President Donald Trump but upheld findings that he and his company committed fraud.
The Thursday ruling, which was split among the judges, removes the substantial financial judgment while allowing the case to continue through further appellate review. New York Attorney General Letitia James has vowed to appeal the decision to the state’s highest court.
In their opinion, the judges wrote:“While the injunctive relief ordered by the court is well crafted to curb defendants’ business culture, the court’s disgorgement order … is an excessive fine that violates the Eighth Amendment of the United States Constitution.”
The ruling eases Trump’s financial liability, reducing the pressure from a February 2024 judgment that initially set a $354 million fine, which had grown to nearly $500 million with interest. Previously, Trump was required to post a $175 million bond to pause collection during the appeals process—funds he is now set to recover pending further legal proceedings.
Despite voiding the penalty, the court affirmed that Trump, his company, and two of his children were liable for fraud, citing years of inflated financial statements to mislead lenders and insurers.
James maintained that the core of her case was validated: “Yet another court has ruled that the president violated the law, and that our case has merit,” she said.
Trump celebrated the decision, calling it a “total victory” and characterizing the case as politically motivated. His legal team echoed the sentiment, describing the ruling as proof the original penalty was “grossly excessive.”
The civil case, brought by James in 2022, alleged systemic inflation of property values to secure favorable financing. The appeals panel issued multiple opinions in a 322-page decision, with some judges suggesting retrial while others found it unnecessary.
Further appeals are expected, meaning the final outcome remains unresolved.