Ahmed Kamel – Egypt Daily News
In a major legal and political win for President Donald Trump, a New York state appeals court on Thursday overturned a $464.6 million civil fraud penalty against President Trump, while allowing the underlying fraud ruling to stand. The decision marks a dramatic turn in one of the most high-profile cases against Trump, who had been found liable for inflating the value of his wealth and assets to secure favorable business terms.
The deeply divided decision by the Appellate Division in Manhattan wipes out nearly the entire financial judgment previously imposed on President Trump, his adult sons, and senior Trump Organization executives. The original penalty, handed down in February 2024 by Manhattan trial judge Arthur Engoron, had grown with interest to over $527 million by the time of the appeal ruling.
Though the appeals court upheld the finding that President Trump engaged in fraud, it unanimously found that the financial punishment far exceeded what was appropriate under the circumstances. Two of the five judges even argued the case warranted a full retrial, while a fifth judge pushed to dismiss the case entirely.
Despite the lack of a majority opinion, all five appellate judges agreed to void the massive monetary award, significantly weakening the impact of the original judgment.
Legal and Political Stakes
The ruling is a blow to New York Attorney General Letitia James, a Democrat who had led the civil fraud investigation and brought the lawsuit. James had accused President Trump of committing “persistent and repeated fraud” to mislead lenders and insurers by inflating the value of his assets, including Trump Tower and Mar-a-Lago. President Trump and his attorneys denied any wrongdoing, maintaining that no parties suffered financial harm.
James vowed to continue pursuing the case, stating she would appeal the decision to the New York Court of Appeals, the state’s highest court. “Another court has ruled that the president violated the law, and that our case has merit,” she said.
President Trump, for his part, celebrated the appeals court’s ruling as a sweeping vindication. “TOTAL VICTORY,” he declared in a post on social media, calling the original decision “unlawful and disgraceful.”
Court: Fraud Occurred, But No “Cataclysmic Harm”
While agreeing that the Trump Organization had engaged in deceptive business practices over a decade, several judges found that the Attorney General failed to show the kind of catastrophic harm that would justify a penalty of over half a billion dollars.
Justice Peter Moulton, writing for two judges who supported partial injunctive relief but not the massive fine, said the ruling should serve as a deterrent against future fraud, not a vehicle for excessive punishment. “The state is not entitled to compound its victory with a massive punitive fine,” he wrote.
Moulton also emphasized that the Attorney General has the authority to act before financial catastrophe strikes, which, in this case, helped prevent significant damage. He and Chief Judge Dianne Renwick supported allowing the case’s non-monetary penalties, such as bans on applying for loans from New York-regulated banks to take effect.
Dissenting Views and Political Overtones
The panel was starkly split, reflecting the high political stakes of the case. Justices John Higgitt and Llinet Rosado supported James’ right to sue but believed a new trial was necessary, citing what they called Judge Engoron’s overly hasty conclusions of fraud without a full evidentiary process.
Justice David Friedman, the only Republican-appointed judge on the panel, was even more critical. He argued the case was politically motivated and warned that further legal actions could destabilize the U.S. political system during a volatile global moment.
“Another trial would disrupt the political life of the United States and would undermine its national interest,” Friedman wrote, adding that voters had already delivered their own verdict on Trump’s political future.
Broader Legal Context
The appeals court decision comes amid a broader unwinding of legal pressure against President Trump following his re-election in 2024. His return to the White House has effectively paused or ended multiple criminal cases, including two related to efforts to overturn the 2020 election results.
In a separate criminal case, President Trump was convicted in May 2024 in Manhattan on charges related to hush money payments to adult film actress Stormy Daniels but received no punishment.
President Trump is still appealing more than $88 million in civil judgments in lawsuits brought by writer E. Jean Carroll, who accused him of rape and defamation. Trump denies all allegations.
Financially, President Trump appears to be on stronger footing than a year ago, when he struggled to post bond for the fraud penalty. His recent business ventures, including those tied to cryptocurrency, have reportedly improved his liquidity, enabling him to navigate the legal battles more effectively.
Meanwhile, Attorney General Letitia James herself is reportedly under federal investigation for potential mortgage fraud, and a grand jury has been convened to examine whether her prosecution of President Trump violated his civil rights, a move seen by critics as part of a broader pattern of political retaliation under Trump’s administration.
What Comes Next
While President Trump walks away from the largest financial threat hanging over him, the court’s decision is not the end of the legal saga. Letitia James has vowed to appeal to the state’s highest court, where the case could take a new turn. The non-financial penalties, including restrictions on Trump’s access to New York banking institutions and limits on his sons’ business involvement, are now expected to go into effect.
For now, the decision hands President Trump a powerful talking point as he continues his third campaign for the presidency, not just as a political figure who defies legal attacks, but now as one who can claim to have legally outlasted them.
