Trump’s $527M Fraud Fine Tossed by NY Court

New York appeals court threw out a massive $527 million civil fraud penalty against President Donald Trump, ruling it “excessive” and unconstitutional under the Eighth Amendment. The decision, stemming from a lawsuit by New York Attorney General Letitia James, spares Trump from a financial blow that could have crippled his real estate empire but upholds findings that he, his company, and his sons Eric and Donald Jr. engaged in fraud by inflating asset values for decades.

The 323-page ruling by a divided five-judge panel in the Appellate Division found that while Trump’s actions caused harm, the penalty—originally $355 million plus interest—was disproportionate. “While harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half billion-dollar award,” wrote Judges Dianne T. Renwick and Peter H. Moulton. The court upheld non-monetary sanctions, including a three-year ban on Trump serving as a corporate officer and two-year bans for his sons, which remain paused pending further appeals.

Trump hailed the ruling as a “TOTAL VICTORY” on Truth Social, claiming it ended a “Political Witch Hunt” that hurt New York businesses. “They stole $550 million from me with a fake case, and it was overturned,” he said in Washington, D.C. His son, Donald Trump Jr., mocked James, referencing her February 2024 post tallying the penalty at $465 million: “I believe you mean $0.00.” Eric Trump called it “the biggest victory in the world.”

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James, who plans to appeal to the New York Court of Appeals, emphasized that the court affirmed Trump’s fraud liability. “It should not be lost to history: yet another court has ruled that the president violated the law,” she said. The lawsuit, filed in 2022, accused Trump of inflating property values, such as tripling the size of his Trump Tower penthouse, to secure favorable loans and insurance terms. State attorneys argued this misled lenders into riskier deals, harming honest borrowers.

The panel’s 11-month deliberation, far longer than typical, reflected deep divisions. Two judges supported James’ case but deemed the fine too severe, while another argued she lacked authority, suggesting lenders could have sued if harmed. Justice David Friedman, appointed by a Republican governor, accused James of targeting Trump’s political career and business for “political hygiene.” Trump’s team, led by former attorney Alina Habba, called the ruling a “resounding victory,” alleging the case was “politically motivated, legally baseless, and grossly excessive.”

Trump’s defense insisted his financial statements, with disclaimers noting they weren’t audited, caused no harm since loans were repaid. The ruling returns the $175 million bond Trump posted to delay penalty collection. However, James’ investigation faces scrutiny, with Trump’s Justice Department subpoenaing her records, probing potential civil rights violations. Her attorney, Abbe D. Lowell, called this a “desperate” act of “political retribution.”

The decision marks a significant win for Trump, who faced multiple legal challenges during his campaign, including a criminal hush money conviction—spared punishment—and ongoing appeals in E. Jean Carroll defamation cases totaling $88.3 million. With his cryptocurrency ventures boosting his finances, the ruling eases a major burden as he navigates his second term.

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