NY appeals court overturns fraud penalties against Trump
News | By Easton Martin | August 21, 2025
A New York appeals court has overturned nearly 500 million dollars in civil fraud penalties against former President Donald Trump. The ruling removed the financial judgment while leaving the fraud finding in place.
The case was originally brought by Attorney General Letitia James in 2022. Judge Arthur Engoron ruled in February 2024 that Trump and his company had fraudulently inflated property values to obtain loans and insurance benefits. He ordered Trump and his co-defendants to pay more than 454 million dollars, including interest, and imposed restrictions on the Trump Organization.
The appellate panel voided the financial penalty, citing that it was excessive under the Constitution. Two judges upheld the fraud finding but rejected the penalty. Two other judges said a new trial may be necessary. One judge argued that the case should have been dismissed entirely.
While the financial penalty was thrown out, restrictions remain in effect. These include limits on the Trump Organization’s ability to borrow money in New York, prohibitions on Trump’s sons serving as company officers, and oversight by a court-appointed monitor.
Attorney General James has the option to appeal to New York’s highest court. The Trump Organization continues to operate under court supervision while the case proceeds.
