A New York appellate court has overturned a civil fraud penalty totaling over $500 million, previously imposed on U.S. President Donald Trump and his business associates, while reaffirming the underlying fraud findings. The court deemed the financial penalty “excessive” and in violation of the Eighth Amendment’s protections against disproportionate fines.(The Guardian, The Washington Post, Financial Times)
This civil case originated in 2022, when New York Attorney General Letitia James accused Trump and his companies of inflating the values of real estate assets to secure favorable loans and insurance. In February 2024, Judge Arthur Engoron ruled that the defendants must repay approximately $355 million—plus interest, pushing the total to over $500 million in disgorgement of “ill-gotten gains.”(The Guardian, Wikipedia)
On August 21, 2025, a five-judge panel ruled in a split decision that while the fraud was established, the financial penalty imposed was constitutionally excessive.(The Washington Post, Financial Times) The appeals court maintained the other sanctions—such as injunctive restrictions barring Trump and his sons from business activities in New York—but removed the hefty monetary fine.(The Guardian, The Times of India)
President Trump hailed the decision as a “total victory,” echoing his long-standing claims that the case was politically motivated. Meanwhile, AG Letitia James said she will continue to seek justice, reaffirming that the fraud finding stands and pledging to appeal the decision to the state’s highest court.(The Guardian, The Daily Beast)
