Trump’s ‘excessive’ US$515 million fraud penalty dismissed by appeal court

An appeal court has thrown out the massive civil fraud penalty against US President Donald Trump, ruling on Thursday in New York state’s lawsuit accusing him of exaggerating his wealth.

The decision came seven months after the Republican returned to the White House. A panel of five judges in New York’s mid-level Appellate Division said the verdict, which stood to cost Trump more than US$515 million and rock his real estate empire, was “excessive”.

After finding that Trump engaged in fraud by flagrantly padding financial statements that went to lenders and insurers, Judge Arthur Engoron ordered him last year to pay US$355 million in penalties. With interest, the sum has topped US$515 million.

The total – combined with penalties levied on some other Trump Organization executives, including Trump’s sons Eric and Donald Jnr – now exceeds US$527 million, with interest.

“While the injunctive relief ordered by the court is well crafted to curb defendants’ business culture, the court’s disgorgement order, which directs that defendants pay nearly half a billion dollars to the State of New York, is an excessive fine that violates the Eighth Amendment of the United States Constitution,” Judges Dianne T. Renwick and Peter H. Moulton wrote in one of several opinions shaping the appeal court’s ruling.

Engoron also imposed other punishments, such as banning Trump and his two eldest sons from serving in corporate leadership for a few years. Those provisions have been on pause during Trump’s appeal, and he was able to hold off collection of the money by posting a US$175 million bond.