A New York appeals court has just struck down the massive civil “fraud” penalty imposed on President Donald Trump, ruling that the nearly half-billion-dollar fine violated the U.S. Constitution’s protection against excessive punishment.
The initial $355 million penalty levied against Trump had ballooned to more than $527 million with interest.
On Thursday, the five-judge panel ruled that the penalty “is an excessive fine that violates the Eighth Amendment of the United States Constitution,” according to the Associated Press.
The case stemmed from a lawsuit brought by anti-Trump New York Attorney General Letitia James, a career Democrat.
James alleged that the president and executives at the Trump Organization inflated the value of his assets to obtain favorable terms from lenders.
Manhattan Supreme Court Judge Arthur Engoron sided with James last year, claiming Trump overvalued assets by as much as $2.2 billion between 2014 and 2021.
However, these alleged inflations were calculated by Engoron based on his own estimations of property value, which conflicted with the valuations provided by experts.
Engoron ordered Trump to pay the massive fine and barred him from running his New York businesses for three years.
While the appeals court wiped out the extraordinary fine, it allowed the “fraud” finding to stand, meaning Trump’s legal team can appeal to the state’s highest court.
The judges left other penalties against Trump’s company in place but said the president could continue seeking an extension of the pause on enforcement.
Trump celebrated the decision as a major vindication.
“TOTAL VICTORY in the FAKE New York State Attorney General Letitia James Case!” Trump posted on Truth Social.
“I greatly respect 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.
“Others were afraid to do business there,” he noted.
“The amount, including Interest and Penalties, was over $550 Million Dollars.
“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.”
Judge David Friedman blasted James’ lawsuit in his opinion, writing:
“Plainly, her ultimate goal was not ‘market hygiene’ … but political hygiene, ending with the derailment of President Trump’s political career and the destruction of his real estate business.
“The voters have obviously rendered a verdict on his political career.
“This bench today unanimously derails the effort to destroy his business.”
Appellate Judge Peter Moulton, concurring, said the penalty calculation was fundamentally flawed:
“The calculation of the disgorgement in this case was far from a reasonable approximation.”
The panel issued more than 300 pages of concurring and dissenting opinions, reflecting divisions over the scope of James’ authority.
“While most of the judges agreed the penalty was excessive, some said James was justified in pursuing the case, while others argued that only Trump’s lenders — none of whom filed suit — had standing to challenge his valuations.
James campaigned in 2018 on a promise to “take on” Trump, calling him “incompetent” and “an embarrassment to all that we stand for.”
Trump consistently called her case a politically motivated “Witch Hunt.”
Trump appealed the civil judgment in February 2024, with attorney Alina Habba blasting the attorney general’s prosecution.
“Letitia James is not going to get away with it; the Biden administration is not going to get away with it,” Habba said at the time.
“President Trump has done nothing wrong.
“All he has done is win a campaign, and that is scaring them because they know when he goes back in November 2024, he is going to clean house, and that is truly the problem.”
Following Thursday’s ruling, Trump reiterated his belief that the case was brought purely for political gain.
“She is a Trump Deranged Lunatic!” he wrote.
“They made me bond the outrageous sum, which never happened before, and which cost me Millions of Dollars a month.
“It should have never been allowed to happen, and everyone knew it!”
The appeals court’s ruling represents a major blow to James’s high-profile case and delivers Trump another courtroom win as he continues his second term as president.
Meanwhile, James is now facing her own federal fraud charges.
James is currently under investigation for mortgage fraud.
However, the legal troubles for James, who campaigned on a promise to “get Trump” on unspecified charges, don’t end there.
As Slay News reported, James is now under criminal investigation by the U.S. Department of Justice (DOJ) for her targeting of Trump, as well as another instance tied to her actions.
The DOJ launched the investigation into James under the direction of Attorney General Pam Bondi.
Subpoenas have reportedly been issued to James in connection with allegations of “deprivation of rights,” a major federal crime that carries severe penalties.
The investigation centers on “deprivation of rights,” with legal sources referencing Section 242 of Title 18.
The statute makes it a federal crime for an individual acting under color of law to willfully deprive someone of a right or privilege protected by the Constitution or laws of the United States.
If convicted under this statute, offenders face significant penalties, including life in prison or even the death penalty.
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