A New York appeals court has thrown out the half billion-dollar civil fraud judgment handed down last year against President Donald Trump, his family and his company.
The Appellate Division’s First Department upheld last year’s ruling finding Trump, his eldest sons and his business liable for a decade’s worth of business fraud. The appellate court, however, found the penalty of $454 million to be an excessive fine at odds with the Eighth Amendment.
“The documentary evidence supports Supreme Court’s conclusion that the Attorney General made a prima facie showing that each defendant participated in the fraudulent scheme,” the opinion said. “The trial record is also replete with evidence supporting the court’s determination that the individual defendants had the requisite intent to defraud, a necessary element of each Penal Law claim.”
However, said the opinion, “while harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half billion-dollar award to the State.”
The decision allows either side to pursue an appeal to the state’s highest court, the New York Court of Appeals.
“Today’s ruling by the New York appeals court is a resounding victory for President Trump and his company,” said Trump’s former personal attorney Alina Habba, who helped represent Trump in the case and was later named interim U.S. attorney for New Jersey. “The court struck down the outrageous and unlawful $464 million penalty, confirming what we have said from the beginning: the Attorney General’s case was politically motivated, legally baseless, and grossly excessive.”
After a three-month civil trial last year, New York Judge Arthur Engoron found Trump liable for committing a decade of business fraud by inflating his net worth to secure better business deals.
President Donald Trump meets with Ukrainian President Volodymyr Zelensky in the Oval Office at the White House, August 18, 2025 in Washington.
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In his written decision, Engoron said that Trump and his co-defendants engaged in frauds that “leap off the page and shock the conscience” including wrongly claiming that Trump’s penthouse was three times its actual size and valuing his Mar-a-Lago estate as a personal residence, rather than a social club.
“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,” Engoron wrote, claiming that Trump and his co-defendants were “incapable of admitting the error of their ways.”
The former president has long criticized the case as politically motivated, including during an impromptu closing statement he delivered in court last year where he declared himself an “innocent man.”
“I’ve been persecuted by someone running for office,” Trump said, referring to New York Attorney General Letitia James, who brought the case. “This statute is vicious. It doesn’t give me a jury. It takes away my rights.”
In his February decision, Engoron temporarily barred Trump and his sons from leading New York-based companies and ordered Trump to pay a fine of more than $454 million. That number increased to around half a billion dollars based on interest accrued on the judgement.
Trump has denied wrongdoing and argued that the alleged victims in the case were sophisticated counterparties who eagerly agreed to go into business with the Trump Organization and profited from the deals. Those arguments formed the crux of his appeal, filed in July, in which his lawyers argued that James violated the statute of limitations, misapplied the relevant law, and encouraged an exclusive penalty.
During a hearing in September, several of the judges on the appellate panel appeared receptive to Trump’s arguments seeking to reverse or reduce the his penalty, questioning the size of the massive judgment and the application of the fraud statute used to bring the case.
Since Trump’s reelection win in November, his lawyers have implored James to drop the case, citing the dismissal of Trump’s federal criminal cases. Lawyers for James have rejected the request, arguing that Trump’s return to the White House does not impact his civil cases.
“The ordinary burdens of civil litigation do not impede the President’s official duties in a way that violates the U.S. Constitution,” New York Deputy Solicitor General Judith Vale wrote in a letter to Trump’s lawyer.
Trump owed more than $550 million between three civil judgments, including a $83.3 million judgment in damages for defaming former Elle magazine columnist E. Jean Carroll and a $5 million judgment awarded after a jury found he sexually abused Carol in the 1990s.
This is a developing story. Please check back for updates.
