NEW YORK--In a triumph for Donald Trump, a New York state appeals court on Thursday threw out a half-billion-dollar penalty while preserving a fraud case against him, enabling the U.S. president to rebound from one of his biggest legal defeats.
The deeply divided decision by the Appellate Division in Manhattan is also a defeat for New York Attorney General Letitia James, one of Trump's biggest foes, who he accused of bringing the civil fraud lawsuit to advance a political witch hunt and deny him a second White House term.
A trial judge had ordered the penalty in February 2024 after finding that Trump fraudulently overstated his wealth and the value of his properties to bolster his family business. Trump denied wrongdoing, and his lawyers argued that any errors in reporting his fortune to his lenders and business partners were irrelevant because none was harmed.
Four judges on the five-member appeals court voted to let the fraud finding stand, but all found problems in the judge's handling of the case and two would have ordered a new trial.A fifth judge would have dismissed the case altogether, and all five judges would have voided the payout. There was no majority opinion.
The original judgment against Trump, his adult sons and a former Trump Organization executive totaled $464.6 million, with Trump liable for $454.2 million. As interest continued to accrue, those respective sums have grown to $527 million and $515.2 million.
In a social media post, Trump called the decision a "TOTAL VICTORY". "I greatly respect the fact that the Court had the Courage to throw out this unlawful and disgraceful Decision," the Republican wrote.
James, a Democrat who regularly said Trump was not above the law, said she will ask the Court of Appeals, the state's highest court, to review the case."It should not be lost to history: yet another court has ruled that the president violated the law, and that our case has merit," she added.
Trump was separately convicted in May 2024 on criminal charges in Manhattan stemming from hush money paid to porn star Stormy Daniels, but received no punishment. His reelection also effectively meant the end of three other criminal cases he faced, including two for alleged interference in the 2020 election.
Trump is still challenging more than $88 million of civil verdicts won by the writer E. Jean Carroll, who accused him of defamation and rape. He has denied wrongdoing.
But his finances appear much improved, including from business tied to cryptocurrencies, compared to last year when he struggled to post a bond to appeal the $454.2-million judgment. He was later allowed to post a smaller bond.
James, meanwhile, is under investigation for possible mortgage fraud by the U.S. Department of Justice, as the White House uses the levers of government against people who have investigated Trump or resisted his agenda.Prosecutors also convened a grand jury to investigate whether James' fraud case deprived Trump of his civil rights, a person familiar with the matter said this month.
