‘Excessive’: Trump rejoices as $700m New York fraud fine tossed out
By Erik Larson
New York: A Manhattan appeals court struck down a roughly $US500 million ($780 million) fraud penalty against US President Donald Trump and his company, even as it upheld the finding that he broke the law by inflating the value of assets such as Mar-a-Lago.
A five-judge panel on Thursday, New York time, agreed with Trump that the size of the fine was unconstitutionally “excessive”.
Donald Trump argued that his method of valuing his real estate was typical of the industry and that no banks lost money on his loans.Credit: AP
The long-awaited ruling by New York’s intermediate appeals court is a major victory for Trump over New York Attorney-General Letitia James, whose office brought the case, though other aspects of the April 2024 judgment remain intact.
On top of the financial penalty, Trump and his sons faced a temporary ban on serving as corporate officers in New York. The company was also ordered to submit its financial records for review by an independent monitor. Those sanctions stand, though they remain on hold for possible further appeal by Trump.
In a statement, James said her office would challenge the ruling at the New York Court of Appeals, the state’s highest court. She also said that “yet another court has ruled that the president violated the law”.
Still, the massive fine had been the heart of Justice Arthur Engoron’s judgment. The judge had ordered Trump last year to pay $US355 million in penalties after finding that he had flagrantly padded financial statements provided to lenders and insurers. With interest, the sum has topped $US515 million. Additional penalties for executives at his company, the Trump Organisation, including sons Eric and Donald Trump jnr, have brought the total to $US527 million with interest.
New York Attorney General Letitia James.Credit: AP
The elimination of the fine adds to the list of Trump’s legal woes that have essentially melted away since he won re-election as president.
The Justice Department dropped two federal criminal cases against him, citing a longstanding policy against prosecuting a sitting president. Though he was convicted of falsifying business records to conceal hush money payments to porn star Stormy Daniels, he was sentenced to no jail time.
On Truth Social, Trump hailed the appellate decision as “A GREAT WIN FOR AMERICA!!!“.
James sued Trump and his sprawling real estate company in September 2022, more than two years before his successful bid to retake the White House.
An aerial view Mar-a-Lago in Palm Beach, Florida.Credit: nna\advidler
She won after an 11-week trial in which she presented extensive evidence that Trump inflated the value of assets – including his Florida club and Trump Tower penthouse on Fifth Avenue – for years to get better terms on loans.
The conduct saved Trump millions of dollars in lower interest rates, which the state sought to claw back.
Trump argued that his method of valuing his real estate was typical of the industry and that disclaimers on his financial statements advised banks they should do their own valuations anyway. One of his biggest defence arguments was that no banks lost money on his loans, and the state didn’t dispute that.
One of the five judges who issued Thursday’s ruling dissented from the others and said the verdict should have been thrown out along with the penalty.
Justice David Friedman accused James, a Democrat, of bringing the case for “partisan political motives” in the hopes of destroying both the Republican president’s political career and his real estate business.
“The voters have obviously rendered a verdict on his political career,” Friedman wrote. “This bench today unanimously derails the effort to destroy his business.”
Two other judges on the panel suggested that James’ case was weak, but agreed on Trump’s liability solely for the purpose of allowing the court to issue a final decision the president can appeal against.
The ruling puts fresh pressure on James, who has become the focus of a federal probe into whether her lawsuit violated Trump’s legal rights.
Trump Tower in New York.Credit: Bloomberg via Getty Images
On August 8, people familiar with the federal probe into James’ case against Trump said Justice Department officials had convened a grand jury in Albany, New York, and sent subpoenas to James’ office. The subpoena also seeks information on James’ case against the National Rifle Association, said one of the people. The state attorney-general won a court case last year accusing the gun-rights group of misusing donor funds.
Abbe Lowell, a lawyer for James, has said the investigation was a “blatant and desperate example of this administration carrying out the president’s political retribution campaign”.
Trump has long criticised James and Engoron, who oversaw the non-jury trial, calling both of them politically biased against him.
Trump has also appealed against his conviction in the hush money case, seeking to erase his criminal record.
He has also appealed against two civil jury verdicts against him in lawsuits brought by New York writer E. Jean Carroll, who claims Trump raped her in a department store dressing room in the 1990s. She sued him for sex abuse and defamation and won nearly $90 million in total damages. Trump has consistently denied Carroll’s allegations.
Bloomberg, AP
Get a note directly from our foreign correspondents on what’s making headlines around the world. Sign up for our weekly What in the World newsletter.