A New York appeals court has overturned a US$500 billion (A$778.3 billion) civil business fraud fine imposed on United States President Donald Trump and his company last year, arguing the fine was excessive.
The suit had been filed by New York Attorney General Letitia James. The court’s five judges unanimously ruled that the fine should be thrown out under the Constitution’s Eighth Amendment’s ban on excessive fines, despite two judges saying the suit was rightly decided.
“While harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half billion-dollar award to the State,” wrote appeals court judge Peter Moulton in an opinion.
“Additionally, a fine cannot be proportionate to the offense unless it is reasonably calculated to encompass only the actual proceeds that defendants realized from their fraud.”
The court’s ruling upheld non-monetary sanctions imposed by the Manhattan Supreme Court on the defendants, however, which would limit Trump and other defendants from the Trump Organization from doing business in New York.
James said she would appeal the ruling to the state’s highest Court of Appeals.
Manhattan Supreme Court Judge Arthur Engoron handed down the fine in February 2024, while Trump was a presidential candidate. He ruled that Trump, his sons Donald Trump Jr. and Eric Trump, and two Trump Organization executives had participated in a years-long plan to fraudulently misrepresent Trump’s net worth to secure more favourable loan terms.
According to Engoron, Trump’s statements of financial condition between 2014 and 2021 had overvalued his assets by US$812 million to $2.2 billion.
At the time, Trump was fined US$354.8 million, with an additional $100 million in interest. Three of the other four defendants also received fines, including Trump’s sons.
Trump has been banned from acting as an officer of a New York-based company for three years under the ruling, with his sons banned from doing so for two years each.
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