An appeals court in New York has struck down a massive financial penalty imposed on Donald Trump, while still confirming that he and his business engaged in fraud.
The decision reduces the immediate financial burden but leaves other restrictions in place.
The original penalty, set at $355 million and later growing to more than $500 million with interest, was ordered by Judge Arthur Engoron after a civil fraud trial in 2023.
Engoron found that Trump had inflated the value of Trump Organization properties to gain more favorable loans.
In its 323-page ruling, the Appellate Division of the New York Supreme Court concluded that the fine was excessive and likely violated constitutional protections.
Judge Peter Moulton noted that while wrongdoing occurred, the harm did not justify such a large penalty.
The panel of five judges showed divisions in their reasoning. Some agreed that Attorney General Letitia James was within her authority to pursue the case, while one believed the lawsuit should have been dismissed.
Two others called for a narrower retrial but agreed to set aside the fine to bring closure.
Despite the reduction, Trump’s liability for fraud remains.
Non-financial penalties also stay in effect, including a three-year ban on Trump serving as a company director or borrowing from New York banks.
Trump celebrated the ruling on his Truth Social platform, calling it a victory and framing the case as a politically motivated attack.
His son Eric Trump also praised the outcome, describing it as long-awaited justice.
Attorney General James’s office, however, highlighted that the appeals court upheld findings of fraud against Trump, his company, and his two adult sons.
The office has said it will appeal the removal of the fine to the state’s highest court.
Legal experts noted that the ruling postpones a final resolution. Some described it as a strategic move to push the case toward the Court of Appeals, where the ultimate decision will rest.