A New York appeals court has thrown out the massive half-billion-dollar civil fraud penalty imposed on President Trump, his sons, and their business interests. The ruling by a five-judge panel of the Appellate Division ruled that the $355 million fine, which, with interest, now exceeds $527 million, was unconstitutionally excessive.
The panel was split on the merits of the fraud finding but united in dismissing the fine. “While the injunctive relief ordered by the court is well crafted to curb defendants’ business culture, 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.”
This case was part of the lawfare campaign conducted against President Trump in the aftermath of his controversial 2020 defeat for a second term. The essence of the case was that Trump and his sons had massively inflated their wealth on loan applications. As was pointed out at trial, not only were the financial statements accompanied by a disclaimer stating they were not audited, but the statements were also independently investigated by the banks and insurance companies involved, and the loans were repaid in full. In short, Trump was convicted of fraud for applying for, receiving, and repaying a loan from willing business partners.
Letitia James is now under a federal investigation for violating President Trump's constitutional rights in bringing this action (see Grand Jury Investigation Targets Letitia James, NY AG Hit With Subpoenas Over Fraud Case Against Trump – RedState) and under criminal investigation for mortgage fraud (Letitia James Really Stepped in It This Time - Can You Say Mortgage Fraud? – RedState).
In New York's court system, the Appellate Division is one level below the Court of Appeals, the state's highest court.
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