NY appeals court dumps Trump’s $500 million fraud fine but upholds judgment

A New York appeals court threw out the roughly $500 million civil fraud penalty against President Trump on Thursday, but it declined to toss the case entirely.

It deals a significant blow to New York Attorney General Letitia James’s (D) sprawling case against the president and his business.  

In a deeply divided decision, the court upheld a lower court’s finding that Trump, his eldest sons and another executive conspired to alter his net worth for tax and insurance benefits. 

However, the eye-popping financial penalty against the president and his business will not stand, with the judges saying it amounts to an unconstitutional excessive fine. The ruling enables the case to move toward New York’s top court. 

The case, brought in 2022, made James one of the president’s most prominent adversaries, as it threatened his billionaire status and the future of the business that built his fame — and paved his path to the White House.  

A bench trial culminated in a $464 million judgment against Trump and his business, plus interest that has mounted every day. The total had reached more than $527 million, including interest, as of Thursday.  

Beyond the agreement the fine must be tossed, the decision was deeply split. Two judges said the trial court’s findings were justified, another two wanted to order a new trial while the fifth judge voted to dismiss the case outright. 

“It is difficult to imagine that a trial could proceed while one of the principal defendants, and a central witness, is President of the United States,” the first pair wrote. 

“The inevitable elapse of time and the attendant difficulties in recreating a vast record of testimony and documents – an exercise that is both Sisyphean and unneeded, because an extensive trial record already exists – would likely consign this meritorious case to oblivion,” they said.

But the 2-2-1 split left no opinion garnering a majority. So to ensure finality, the second pair agreed to join the first in upholding the lower decision, providing a clean path for the case to proceed to a higher court. 

The elimination of the nine-figure sum has left Trump and his sons painting the ruling as a win. 

“Total victory in the sham NY Attorney General case!!! After 5 years of hell, justice prevailed!” Eric Trump wrote on X. 

But it’s not entirely so. 

The panel found that the trial court’s injunctive relief barring Trump, his sons and other executives from serving in key leadership roles in the near term was justified.  

This story was updated at 12:04 p.m.