Former President Donald Trump has avoided a $515 million penalty in his New York civil fraud case, following a decision by an appeals court. The court overturned the fine that had been imposed last year by Judge Arthur Engoron, ruling that it was “excessive” and violated the Constitution’s ban on excessive punishment, according to the Associated Press.
Judge Engoron had previously determined that Trump inflated asset values on financial statements provided to lenders and insurers. As a result, Trump was ordered to pay $355 million plus interest, with penalties for his sons Eric and Donald Jr. and other Trump Organization executives bringing the total above $527 million.
Although the appeals panel upheld certain restrictions intended to change practices at the Trump Organization, it eliminated the large disgorgement order against Trump. This outcome is considered a setback for Attorney General Letitia James, who described the original case as evidence of Trump’s “lying, cheating, and staggering fraud.” The Associated Press reported that James’ office did not immediately comment on the ruling.
Other penalties imposed by Engoron—such as barring Trump and his sons from serving as corporate officers—remain suspended while further appeals are considered. Trump has posted a $175 million bond to prevent collection efforts while legal proceedings continue. The decision comes nearly 11 months after oral arguments in the appeal were heard and leaves Attorney General James with the option to take her case to New York’s highest court.
Recently, the Justice Department issued a subpoena to James regarding her involvement in this civil fraud lawsuit while also launching an investigation into her personal real estate transactions. James’ lawyer responded by saying: “the investigation was ‘the most blatant and desperate example of this administration carrying out the president’s political retribution campaign.’”
One part of this broader investigation concerns whether James falsified records for properties she owns in Brooklyn and Virginia—valued at less than $2 million in total—to secure better loan terms.
Mortgage-related accusations have become more common within actions linked to former President Trump’s administration. For instance, Bloomberg reported that Trump called for Federal Reserve Governor Lisa Cook’s resignation after Federal Housing Finance Agency director Bill Pulte asked Attorney General Pam Bondi to investigate Cook’s mortgages (https://www.bloomberg.com/news/articles/2025-08-15/trump-calls-for-fed-governor-cook-to-resign-amid-mortgage-probe). The Department of Justice plans similar investigations into Cook as well as Adam Schiff, a California senator who has frequently criticized Trump.
