Appeals court throws out Trump's $500m civil fraud penalty

August 21, 2025

A New York appeals court has overturned the $500 million penalty imposed on Donald Trump in his civil fraud case, while still upholding his liability for fraud. The judges ruled that the fine was excessive and potentially violated constitutional protections against severe punishment, despite agreeing that Trump had inflated property values to secure favorable loans. Judge Peter Moulton noted that while harm occurred, it wasn't "cataclysmic" enough to justify such a large financial penalty.

Who is affected

Donald Trump, his two adult sons, and the Trump Organization
New York Attorney General's Office and Letitia James
Banks and financial institutions that were defrauded by Trump's misrepresentations
New York business community (referenced as potentially harmed by the original decision)

What action is being taken

The New York Attorney General's Office is planning to appeal the decision on the fine to the state's highest court, the Court of Appeals
The non-monetary penalties against Trump remain in place, including the three-year ban on serving as a company director or taking out loans from New York banks
The appeals court is maintaining Trump's fraud liability while removing the financial penalty

Why it matters

The case involves a former and potentially future U.S. president being found liable for business fraud
The ruling reflects judicial disagreement about how to handle fraud cases involving political figures
The decision maintains that Trump committed fraud but reduces the consequences
It represents what legal experts call a "judicial version of kicking the can down the road" in a politically sensitive case
The unusual 323-page ruling with multiple opinions demonstrates the complexity and historic nature of handling a fraud case involving a presidential candidate

What's next

The New York Attorney General's Office plans to appeal the decision on the fine to the state's Court of Appeals

Read full article from source: BBC