NY Court Throws Out Massive Fraud Penalty Against Trump

An appeals court has thrown out the massive civil fraud penalty against President Trump, ruling Thursday in New York state's lawsuit accusing him of exaggerating his wealth. A panel of five judges in New York's mid-level Appellate Division said the verdict, which stood to cost Trump more than $515 million and rock his real estate empire, was "excessive," reports the AP. After finding that Trump engaged in fraud by flagrantly padding financial statements that went to lenders and insurers, Judge Arthur Engoron ordered him last year to pay $355 million in penalties. With interest, that sum has topped $515 million. The total—combined with penalties levied on some other Trump Organization executives, including Trump's sons Eric and Donald Jr.—now exceeds $527 million, with interest.

"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," judges Dianne T. Renwick and Peter H. Moulton wrote in one of several opinions shaping the appeals court's ruling. Engoron also imposed other punishments, such as banning Trump and his two eldest sons from serving in corporate leadership for a few years. Those provisions have been on pause during Trump's appeal, and he was able to hold off collection of the money by posting a $175 million bond.

The court, which was split on the merits of the lawsuit and the lower court's fraud finding, dismissed the penalty Engoron imposed in its entirety while also leaving a pathway for further appeals to the state's highest court, the Court of Appeals. The appeals court, the Appellate Division of the state's trial court, took an unusually long time to rule, weighing Trump's appeal for nearly 11 months after oral arguments last fall. Normally, appeals are decided in a matter of weeks or a few months. New York Attorney General Letitia James, who brought the suit on the state's behalf, has said the businessman-turned-politician engaged in "lying, cheating, and staggering fraud." Her office had no immediate comment after Thursday's decision.