By A divided New York appeals court on Thursday wiped out a nearly half-billion-dollar penalty against President Donald J. Trump while leaving intact a fraud judgment that cuts to the heart of his business empire. The ruling marks a mixed outcome: financial relief for Trump, but continued legal stain from Attorney General Letitia James’s long-running case, at least for now.
The civil fraud suit, filed by James in 2022, accused Trump and the Trump Organization of inflating his wealth to obtain favorable loans. After a lengthy trial, Justice Arthur F. Engoron ruled last year that Trump was liable, imposing insane penalties that with interest swelled to more than $520 million. The Appellate Division for the First Department agreed Trump had committed fraud but found the punishment excessive under the 8th Amendment, according to The New York Times.
Justice Peter Moulton, writing for the court, said Trump’s actions caused real harm but “it was not the cataclysmic harm that can justify a nearly half-billion-dollar award to the state.” Presiding Justice Dianne Renwick joined his opinion, which also rejected the possibility of a new trial, noting that the evidence “clearly demonstrated liability.”
The decision revealed sharp disagreement on the five-judge panel. Justice David Friedman urged dismissal of the case altogether, challenging James’s authority to bring it. Justices John Higgitt and Llinet Rosado supported Trump’s bid for a new trial but reluctantly allowed the fraud ruling to stand, calling their conclusion “a remarkable solution” to “a remarkable situation,” reached “after much consideration, with great reluctance.”
Trump swiftly declared victory, hailing the decision on social media as proof the court had “the Courage to throw out this unlawful and disgraceful Decision.” He derided the case as “a Political Witch Hunt, in a business sense.” The Trump Organization said the ruling “unanimously derails the effort to destroy his business” and accused James of acting out of “political malice.”
James, for her part, vowed to press on. “The court has affirmed the well-supported finding of the trial court: Donald Trump, his company, and two of his children are liable for fraud,” she said in a statement. Her office plans to appeal in order to restore the penalty.
Some have called for James to be disbarred for the ridiculous manner in which she prosecuted the case for clear political reasons and posting the amount the president had been fined under the bogus ruling.
The Trump family had the last laugh, though.
I believe you mean $0.00
Thank you for your attention to this matter. https://t.co/RlJ5d2hIQf
— Donald Trump Jr. (@DonaldJTrumpJr) August 21, 2025
Evidence presented at trial showed Trump overstated the size of his Trump Tower triplex and inflated his net worth by as much as $2.2 billion annually and contended that Mar-a-Largo was only worth $18 million. Engoron’s ruling not only imposed the fine but also barred Trump from serving as a corporate officer in New York for three years and restricted his sons Eric and Donald Jr. for two. The appeals court upheld those sanctions and maintained oversight of the Trump Organization by an independent monitor.
"Tish James campaigned that she was going to take down Trump…he's guilty before we've seen any of the evidence." @DonaldJTrumpJr called out the lawfare of the Letitia James case that just got thrown out on Thursday's "Carl Higbie FRONTLINE." @CarlHigbie pic.twitter.com/jxPOEwQNEp
— NEWSMAX (@NEWSMAX) August 21, 2025
The ruling arrives amid an ongoing investigation into Letitia James’ corrupt practices, along with her alleged commitment of mortgage fraud in which she claimed not to live in New York. Since returning to the White House, Trump has authorized Justice Department inquiries into James’s real estate dealings and her office’s conduct.
Although the appeals court erased the financial penalty, the fraud finding stands, but even some of Trump’s loudest critics think that ruling may be shelved too.
Andrew McCarthy, the former Assistant United States Attorney for the Southern District of New York, and a well-known Trump hater, told Fox News that the verdict could be overruled by a higher court.
LISTEN TO ANDREW MCCARTHY STARTING AT 1:01 MARK.
'Trump may be completely exonerated in Letitia James case.'pic.twitter.com/z2j3bLIM2B
— Citizen Free Press (@CitizenFreePres) August 21, 2025
The case now heads toward New York’s highest court, which will decided if the law used by the Democratic, hyperpoliticized prosecutor even applies to the case.
[Read More: Trump Goes On Patrol]
