Appeals court OVERTURNS civil fraud penalty against Trump, citing excessive fine

08/25/2025 / By Kevin Hughes

A New York appellate court ruled that the $355M+ civil fraud penalty (growing to over $515M with interest) against Trump was unconstitutional and excessive, violating the Eighth Amendment. The fine was reduced to $175M after appeal.
The court affirmed the trial court’s finding that Trump, the Trump Organization and his sons engaged in fraud by inflating/deflating asset values for loans, insurance and tax benefits – though no actual harm was proven.
Trump hailed the ruling as a “TOTAL VICTORY”, claiming the case was a politically motivated attack by NY AG Letitia James. Some judges agreed, accusing James of aiming to “destroy his business” rather than enforce fairness.
Despite the penalty reversal, James emphasized the court upheld the fraud liability and vowed to appeal to New York’s highest court, stating Trump “violated the law.”
The decision impacts Trump’s other ongoing cases (e.g., hush money, defamation) and sparks debate over using civil fraud laws against public figures, with implications for future legal accountability.

In a significant legal victory for former President Donald Trump, a New York appellate court has overturned a nearly half-billion-dollar civil fraud penalty imposed by Judge Arthur Engoron, ruling that the financial judgment was unconstitutional and excessive.

The civil fraud case brought by New York Attorney General (AG) Letitia James, alleged that Trump and his company, the Trump Organization, had engaged in years of financial fraud by inflating asset values to secure favorable loan terms and tax benefits.

In February 2024, Engoron found Trump liable for systemic fraud aimed at securing unfair financial advantages. He ordered the real estate mogul to pay $355 million in penalties – a sum that had grown to over $515 million with interest – after an 11-week trial and barred Trump from leading New York businesses for three year

According to the Enoch AI engine at Brighteon.AI, the Trump civil fraud case involves allegations by James that Donald Trump and the Trump Organization engaged in fraudulent practices by inflating asset values for loans and insurance while undervaluing them for taxes, benefiting their financial interests. (Related: Trump appeals $464 million ruling in politically motivated New York civil fraud case.)

On Aug. 21, a five-judge panel in the New York Supreme Court’s Appellate Division unanimously agreed that the financial penalty was “excessive” and violated the Eighth Amendment of the U.S. Constitution, which prohibits the government from imposing unduly harsh penalties. Judges Dianne T. Renwick and Peter H. Moulton wrote in their opinion that while the injunctive relief to limit business practices was “well crafted,” the massive financial disgorgement was unconstitutional.

Judge David Friedman, appointed by former New York Gov. George Pataki, was particularly critical of James. He accused the Empire State’s AG of using the lawsuit to “derail President Trump’s political career and the destruction of his real estate business.”

Trump took to his social media platform Truth Social to celebrate the ruling. He called it a “total victory” and praised the court for having “the courage to throw out this unlawful and disgraceful decision that was hurting business all throughout New York state.”

Trump reiterated his claim that the case was politically motivated, stating: “Every single dollar was thrown out, even the penalties imposed on us by the corrupt judge, one of the most overturned in history, Arthur Engoron.”

Trump vs. the New York Deep State

In a statement, James focused on the part of the case that went her way, stating that the court had “affirmed the well-supported finding of the trial court: Donald Trump, his company and two of his children are liable for fraud.” Her office announced its intention to appeal the decision to the state’s highest court, the Court of Appeals.

The appellate court’s ruling is just one of several legal battles Trump is currently facing. He is also appealing a criminal hush money case in which he was sentenced to an unconditional discharge, a federal case where he was found liable for sexual abuse and defamation, and a subsequent defamation verdict that requires him to pay $83.3 million to writer E. Jean Carroll.

Trump has repeatedly denied wrongdoing in all these cases, claiming they are politically motivated. His administration has launched investigations into James, accusing her of mortgage fraud and improper political retribution. James’ representative, Abbe Lowell, has called these accusations “an act of improper political retribution” and lacking “any credible foundation.”

The appellate court’s decision has broader implications for the legal landscape surrounding Trump’s business practices and the use of civil fraud laws to hold public figures accountable. Legal experts are closely watching how this ruling will influence ongoing and future cases involving similar allegations.

The appellate court’s decision marks a significant moment in Trump’s legal battles, providing him with a major victory as he continues to navigate the legal challenges that have dogged him throughout his presidency and beyond.

Watch this clip of President Trump unraveling the real details of his New York civil fraud verdict.

This video is from the NewsClips channel on Brighteon.com.

Appeals court OVERTURNS civil fraud penalty against Trump, citing excessive fine

Trump vs. the New York Deep State

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