An appeals court in New York has thrown out a civil fraud penalty that would have cost US President, Donald Trump and his business associates nearly half a billion dollars, calling the fine “excessive.”
A five-judge panel in New York’s Appellate Division rendered its decision on Thursday, August 21, 2025, after weighing Trump’s appeal for nearly 11 months.
In its ruling, the panel cited the Eighth Amendment of the US Constitution, which prohibits the government from levying unduly harsh penalties on its citizens.
The case stems from a civil suit brought by New York Attorney General, Letitia James, who argued that Trump had inflated his financial records in order to secure advantages with insurance companies, banks and other financial institutions.
In February 2024, a lower court had ordered Trump to pay $355m in penalties, an amount the appeals court called into question. That amount has since grown to about $515m due to accumulating interest.
Two of the panel’s judges, Dianne T Renwick and Peter H Moulton, wrote in one opinion that 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.”
The judge who issued that initial decision, Arthur Engoron, a Democrat, explained in his initial decision that “the frauds found here leap off the page and shock the conscience.”
In his 92-page decision, Engoron expressed particular frustration over Trump’s refusal to answer questions before the court and his refusal to acknowledge the misrepresentations in his financial documents.
“Their complete lack of contrition and remorse borders on pathological. They are accused only of inflating asset values to make more money. The documents prove this over and over again. This is a venial sin, not a mortal sin.
“Donald Trump is not Bernard Madoff. Yet, defendants are incapable of admitting the error of their ways.”
Arthur Engoron
Trump and his co-defendants — who include his sons Eric Trump and Donald Trump Jr, as well as other Trump Organization leaders — were dealt a combined financial penalty that currently totals to about $527m, including interest.
While Engoron’s ruling left the Trump Organization intact, it did bar Eric Trump and Donald Trump Jr from serving in executive roles for two years.
Trump, meanwhile, did not have an official role in the organization at the time. He was in the midst of his 2024 campaign for re-election, and he criticised the fraud case as “election interference.”
Trump Applauds Court Decision
Trump quickly applauded the decision on his social media platform, Truth Social, stating, “TOTAL VICTORY in the FAKE New York State Attorney General Letitia James Case!”
He added that he greatly respects the fact that the Court had the “Courage to throw out this unlawful and disgraceful Decision that was hurting Business all throughout New York State.”
“It was a Political Witch Hunt, in a business sense, the likes of which no one has ever seen before. This was a Case of Election Interference by the City and State trying to show, illegally, that I did things that were wrong when, in fact, everything I did was absolutely CORRECT and, even, PERFECT.
“Every single Dollar was thrown out, even the penalties imposed on us by the Corrupt Judge, one of the most overturned in History, Arthur Engoron.”
Donald Trump
While the court did dismiss the penalty in its entirety, its judges were divided over the merits of the lower court’s ruling, finding that Trump and his co-defendants had misrepresented their wealth in “fraudulent ways.” The panel also left open the possibility of an appeal.
Trump has repeatedly denied wrongdoing in the myriad legal cases he faced between his two terms as President, including the civil fraud suit.
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