Donald Trump’s $500 million penalty for real estate fraud has been overturned by a New York appeals court.
The court upheld a previous fraud finding against the U.S. president but ruled that the massive fine imposed was “excessive.”
“While harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half-billion-dollar award to the state,” the judges wrote in their decision.
Mr. Trump, whose net worth as of June was estimated at $5.1 billion (£3.8bn) by Forbes, praised the ruling, saying the court had the “courage to throw out this unlawful and disgraceful decision.”
New York Attorney General Letitia James, who filed the case, said she would appeal and emphasized that the fraud finding against the president still stands.
The ruling split the five-judge panel: two supported upholding the fraud finding but dismissing the fine, two argued for a new trial, and one pushed to dismiss the case entirely. The two who favored a retrial joined the majority opinion, allowing the case to proceed to the Court of Appeals.
James initially filed the civil suit in September 2022, claiming Trump and his family engaged in “persistent and staggering fraud” by manipulating the value of assets to banks and insurers, resulting in “hundreds of millions of dollars in ill-gotten gains.”
Among the allegations, Trump was accused of inflating the value of Mar-a-Lago, his Florida estate, by as much as tenfold, and exaggerating the size of his Fifth Avenue apartment in New York.
Judge Arthur Engoron had originally fined Trump $355 million (£265m), which grew to around $500 million (£373m) with interest, while also barring him from leading his company for three years.
After the appeals court ruling, Trump celebrated on Truth Social, calling it a “total victory in the fake New York State Attorney General Letitia James case” and attacking both Engoron and James as politically motivated. He also lashed out at two other New York judges, Juan Merchan, who presided over his “hush money” trial, and Lewis Kaplan, who oversaw a defamation case that led to an $83 million (£62m) judgment against him.
Alina Habba, Trump’s attorney in the fraud case, said the ruling confirmed that the lawsuit was “politically motivated, legally baseless and grossly excessive.”
James, however, stressed that the appeals court reaffirmed the fraud finding: “Donald Trump, his company, and two of his children are liable for fraud. The court upheld the injunctive relief we won, limiting Donald Trump and the Trump Organization’s ability to do business in New York.”
She added: “Yet another court has ruled that the president violated the law, and that our case has merit. We will appeal to the Court of Appeals and continue to protect the rights and interests of New Yorkers.”
Meanwhile, Ed Martin, a Trump ally recently appointed to a senior role in the Justice Department, launched a mortgage fraud probe into James earlier this month and called for her resignation as an “act of good faith.”
