President Donald Trump eked out yet another personal victory on Thursday, when a New York appellate court concluded his half-billion-dollar fine for committing bank fraud was just too much.
While the state appellate judges were at odds about much of the case, they did agree on one thing: Trump no longer owes nearly $500 million in fines that, at the time they were issued, threatened to hurt his family company and its real estate empire. The case was brought by New York Attorney General Letitia James, and the president has repeatedly derided it as a “witch hunt.”
Several judges on the panel from the New York Appellate Division’s First Judicial Department did conclude that Trump and his family had “persistently and intentionally inflated the asset values” of their real estate holdings and properties to unfairly obtain bank loans and insurance policies, and did not overturn the ruling. Trump could appeal the bank fraud finding, which would send the case to the Second Circuit Court of Appeals — putting it on a federal track headed for the Supreme Court.
Associate Justice Peter H. Moulton emphasized the unlikelihood that the gargantuan case — which spanned millions of pages of documents — could be sent back to trial.
“It is difficult to imagine that a trial could proceed while one of the principal defendants, and a central witness, is President of the United States. The inevitable elapse of time and the attendant difficulties in recreating a vast record of testimony and documents – an exercise that is both Sisyphean and unneeded, because an extensive trial record already exists – would likely consign this meritorious case to oblivion,” he wrote.
The judges decided to “vacate the disgorgement awards in their entirety,” with Moulton writing that the vast sum “is an excessive fine that violates the Eighth Amendment of the United States Constitution.”
Also gone are the sanctions that the trial judge, Justice Arthur F. Engoron, slapped on Trump’s defense lawyers as punishment for violating his orders by repeatedly making frivolous arguments that prolonged the nearly three-month trial in late 2023.
But now that Trump is once again president and shielded from criminal charges and civil lawsuits, this court decision means that James has suffered a loss in her pivotal battle against Trump — just as his administration is seeking political revenge by launching its own investigation of her.
Ed Martin, a MAGA loyalist who now leads the Justice Department’s new “Weaponization Working Group,” has pressured James to resign. He showed up outside James’ Brooklyn home last week and told Fox News on Sunday that “we’re gonna go to the very bottom of the facts, and if somebody did something wrong, we’re not only gonna hold them accountable, we’re also gonna look at everything else that they’ve been doing.”
In a statement on Thursday, Trump disregarded the opinion’s conclusions that cemented the idea that he committed bank fraud and once again attacked Engoron as a “Corrupt Judge.”
“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,” he posted.
Trump went on to complain that the $175 million bond he needed to post to appeal the case — which itself drew scrutiny from fraud experts — had “cost me Millions of Dollars a month.” He also called James “a Trump Deranged Lunatic!”
But even as the White House tries to villainize New York’s top law enforcement officer as nothing more than a hypocritical political hack who had her own questionable real estate dealings, the appellate court’s majority threw its weight behind James’ findings — and Engoron, who received death threats when Trump sicced his followers against the judge.
Moulton wrote that Engoron’s trial court “properly exercised its discretion in awarding injunctive relief,” noting that Trump and his sons “persistently and intentionally inflated the asset values.” They also backed Engoron’s finding that the Trumps “lacked remorse,” noting how Trump at trial stood behind his accountants’ work when he said, “You haven’t shown me anything that would change my mind.”
The appellate judges also noted the importance of the court-appointed monitor babysitting the Trump Organization’s operations, invoking an observation from the retired federal judge tasked with overseeing the company that it, as they put it, “lacked sufficient internal controls over financial reporting.”
Thursday’s 323-page decision is as lengthy as it is complex, with appellate judges often disagreeing about core issues in the case. Four of them concluded that James was indeed “empowered,” as they said, to tap a law that allowed her to target businesses for “any fraudulent or illegal acts.”
But as Moulton noted, “our remaining disagreements with our colleagues’ decisions are profound.”
For example, Associate Justice John R. Higgitt would have preferred to toss out the massive judgment and hold a new trial — something he acknowledged would be a colossal undertaking.
“We are well aware of the size of the record, and the time and effort already expended in the litigation of this historic action. We did not reach this conclusion lightly or without thorough consideration. But we cannot avoid the finding reached by our analysis merely because the result would be inconvenient or laborious,” he wrote.
On the other side of the spectrum was Associate Justice David Friedman, a conservative who several times entertained Trump’s rapid-fire appeals during the case. In a separate opinion, he sided squarely with Trump’s argument that the attorney general had no business trying to “unwind complex financial transactions” by a real estate tycoon on one side and “ultra-sophisticated banks” with “equally sophisticated lawyers” on the other.
Friedman ended with a parting shot at James, repeating Trump’s long-held accusation that New York’s attorney general, a Democrat, was engaging in nothing more than a political persecution.
“Plainly, her ultimate goal was not ‘market hygiene,’ as posited by Justice Moulton, 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,” he wrote.