A New York appeals court has overturned the $527 million civil fraud penalty imposed on US President Donald Trump, but upheld a ban preventing him and his two eldest sons from serving as corporate directors for a period of time. The split ruling spares Trump from a half-billion-dollar financial blow but affirms findings that he engaged in fraud by inflating his wealth on financial documents for years.
The case , on Thursday, stems from a lawsuit brought by New York Attorney General Letitia James, a Democrat, who accused Trump of exaggerating the value of his assets to secure favourable loans and insurance deals. Last year, Justice Arthur Engoron sided with James, ruling that Trump and his business empire repeatedly misrepresented financial statements, ordering him to pay $355 million in penalties. With interest and additional fines against his sons, Eric and Donald Jr., the total climbed to $527 million.
But the Appellate Division said the punishment was excessive. “While harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half billion-dollar award,”Judges Dianne Renwick and Peter Moulton wrote in their opinion, calling the financial sanction “an excessive fine that violates the Eighth Amendment of the United States Constitution.”
Despite the setback for prosecutors, James emphasised that her office had still won. “The court 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.
Trump hailed the ruling as vindication. “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. This is a total victory,”* the president posted on social media.
His eldest son, Donald Trump Jr., celebrated by mocking James’ prior updates on the penalty tally. Under a February 2024 post where James noted the fine had risen to nearly $465 million with interest, he wrote: “I believe you mean $0.00. Thank you for your attention to this matter.”
However, the decision was not unanimous. In an unusually fractured 323-page set of opinions, the five-judge panel disagreed on several points. Judge David Friedman, appointed by a Republican governor, accused James of pursuing the case for political reasons. “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,”he wrote. “The voters have obviously rendered a verdict on his political career. This bench today unanimously derails the effort to destroy his business.”
Trump himself has consistently denied wrongdoing. During the trial, he declared: “I am an innocent man, and this case is a fraud on me.”His lawyers argued that disclaimers on his financial statements, which warned they were unaudited, shielded him from liability. They also noted that lenders and insurers did their own due diligence and that all loans were repaid.
Nonetheless, the appeals court upheld Engoron’s decision to temporarily bar Trump, Eric, and Donald Jr. from serving in senior business leadership, though enforcement remains paused as appeals continue. Trump posted a $175 million bond earlier this year to stave off collection of the penalty while his legal team pursued the challenge.
The ruling also leaves the door open for further appeal to New York’s highest court, the Court of Appeals.
Meanwhile, Trump notched another legal victory in Washington, where the US Supreme Court allowed his administration to proceed with sweeping cuts to research grants tied to diversity, equity, and inclusion (DEI) initiatives. The administration had sought to eliminate $783 million in National Institutes of Health (NIH) funding for studies related to racial minorities, LGBT people, COVID-19, and vaccine hesitancy, calling them “low-value” and outside the agency’s mission.
The justices lifted a lower court order that had blocked the cuts, siding with the administration’s argument that federal resources should not fund what Trump has labelled “gender ideology” and DEI projects.
Critics condemned the move as politically driven. Public health groups and several Democratic-led states filed lawsuits describing the cuts as “an ongoing ideological purge”targeting legitimate science. But with the court’s conservative 6-3 majority, Trump’s administration has prevailed in nearly every case it has brought before the justices since his return to office in January.
Taken together, the two rulings underline both the legal obstacles and institutional support shaping Trump’s turbulent second presidency. While a key financial penalty was thrown out, the fraud finding against him stands. And on the policy front, the Supreme Court continues to back his agenda to reshape government spending and dismantle diversity initiatives across the federal system.
Emmanuel Addeh
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