A New York appeals court on Thursday struck down a $464 million civil fraud penalty imposed on former President Donald Trump, handing him a major legal and financial victory.
According to Daily Mail, the ruling upheld findings that Trump and his associates engaged in fraud but determined the penalty itself was disproportionate and therefore invalid.
The civil case was originally brought by New York Attorney General Letitia James in September 2022, following a three-year investigation into the Trump Organization’s financial dealings. The lawsuit accused Trump, along with his sons and business associates, of inflating property values to obtain favorable loans and insurance terms. Examples submitted in court noted substantial overestimations of assets such as Trump Tower and Mar-a-Lago.
In February 2024, Manhattan Judge Arthur Engoron ruled that Trump had illegally enriched himself by manipulating asset valuations on official documents. The court found him guilty of several violations, including conspiracy and falsifying records. The $464 million figure in penalties was determined based on what the court viewed as ill-gotten gains and interest.
Trump quickly appealed the February ruling. The former president’s legal team argued that the penalties were excessive and politically driven. While the court agreed that laws had been violated, the five-judge appellate panel concluded that the financial punishment was beyond legal standards and should be voided.
The decision by the appellate court does not reverse the determination that Trump broke the law. Instead, it only vacates the monetary judgment, which had been one of the largest civil penalties ever issued in a case involving a public figure. It marks a dramatic reduction in Trump’s potential personal financial exposure as he pursues a second presidential term.
In the wake of the ruling, celebrations were reported among Trump supporters who gathered outside Trump Tower in Manhattan. Many viewed the decision as a rebuttal to what they believe is an unfair legal pursuit. The victory also further energizes Trump’s narrative that legal actions against him are politically motivated.
The former president reacted on his Truth Social platform, calling the case a targeted attack from the current administration. “This was an attack by the Biden/Harris Administration on their political opponent, ME,” Trump wrote. He added that he considered it “an honor” to have “withstood it" and "even become president of the United States despite the horrible things" done to him.
The original lawsuit was the result of a lengthy probe by the attorney general’s office, which began in 2019. Letitia James accused Trump and his organization of systematically misrepresenting property values over the course of more than a decade. Her office claimed the effort was not a series of isolated incidents but part of a calculated business model dating back to 2011.
Despite Trump’s claims that his statements were typical industry estimates accompanied by disclaimers urging banks to conduct separate appraisals, James’ office insisted the false valuations amounted to a pattern of deception. No financial institutions involved in the loans have reported suffering losses due to the valuations.
Trump’s son, Eric, also commented on the ruling via social media. On X, formerly known as Twitter, he wrote, “Total victory in the sham NY Attorney General case!!! After 5 years of hell, justice prevailed!”
Earlier this month, the Justice Department convened a grand jury in Albany, New York, to examine whether Attorney General James used her office improperly during the course of the litigation. Trump’s administration, now in its second term, initiated the probe to determine whether her actions were politically motivated, particularly during the 2024 presidential campaign season.
This marks the second such investigation into James by the federal government since Trump returned to office. The attorney general’s office responded critically, saying such probes represent a disturbing example of “weaponization of the justice system.” Her office argued that these investigations raise concerns about the use of federal power to punish state-level legal decisions.
In her suit, James described Trump’s pattern of exaggeration in financial statements as deliberate and recurring. However, the appeals court ruled that although the misrepresentations were indeed violations of civil laws, the financial penalty overreached the bounds of fairness established in similar cases.
The appellate ruling does not erase the fact that Trump was found liable for fraud. Instead, it changes the consequences by eliminating the enormous financial cost previously attached to the civil judgment. Though the court acknowledged wrongdoing, it emphasized that penalties must be proportional.
The decision may affect how future high-profile civil cases are handled in terms of penalty assessments. Legal analysts have noted that while Trump did not win exoneration, the removal of the monetary burden clears a substantial obstacle as he continues his 2024 reelection campaign.
This ruling, combined with the separate celebrations earlier this year after Trump’s conviction in the Stormy Daniels-related case, signals that legal outcomes continue to be a driving force in public discourse ahead of the next election cycle.
