A panel of New York appeals court judges expressed skepticism over the $454 million civil fraud judgment against Donald Trump during a hearing on Thursday, raising concerns about the severity of the penalty.
According to the New York Post, New York Attorney General Letitia James initiated the lawsuit, alleging that Trump inflated his net worth by billions to secure better loan and insurance terms.
The former president is seeking to overturn or reduce the judgment, which includes $354 million in damages and $100 million in interest, after a ruling earlier this year by Judge Arthur Engoron. Trump's legal team argued during the appeals hearing in Manhattan that the judgment was overly harsh and legally questionable, claiming that James’ case misinterpreted consumer protection laws and fell outside the statute of limitations.
Judge Engoron had previously found Trump and his top executives, including sons Eric and Donald Jr., guilty of manipulating financial statements to obtain favorable loans. The penalty, which Trump’s attorneys described as “unprecedented for a private company,” was based on allegations that the former president used these inflated financials to reap profits.
However, during Thursday's hearing, several appeals judges appeared open to reconsidering the size of the penalty. Judge David Friedman noted the absence of complaints from lenders or insurers, and Judge Troy Webber questioned the impact of the financial statements on Trump's creditors. Judge Jeffrey Moulton went further, calling the penalty “troubling,” reflecting doubts about the proportionality of the punishment.
Trump’s attorney, D. John Sauer, emphasized that the lawsuit had no direct victims and warned that the decision could set a dangerous precedent for business owners. "People can’t do business in real estate confidently," Sauer argued, questioning the future of the industry if the judgment stands.
Trump's lawyers maintain that the financial documents used in the lawsuit not only did not inflate his wealth but potentially understated it. They also continue to argue that the case is politically motivated, citing that the lack of any financial harm to lenders or insurers undermines the necessity of the lawsuit.
In his earlier ruling, Engoron concluded that the Trump Organization had defrauded financial institutions, which were able to grant Trump loans under favorable terms based on overstated asset values. Trump's legal team rejected the assertion, arguing that the requested bond to secure the judgment was impractical and out of line with corporate norms.
Although the five-judge panel has yet to reach a decision, their concerns over the fairness of the initial ruling suggest potential changes to the judgment.
While Thursday's hearing signals that the appeals court is willing to scrutinize the size of the judgment, any changes require the agreement of at least three judges on the panel. If the court sides against Trump, his legal options remain open, and the case could eventually be appealed to New York’s highest court or even the U.S. Supreme Court.
In a brief submitted earlier this year, Trump’s legal team reiterated their argument that the case extended beyond the statute of limitations, highlighting the age of the financial transactions in question. The decision from the Appellate Division could arrive before the 2024 presidential election, a timeline that could inject further uncertainty into Trump’s political future.
James, on the other hand, maintains that the former president’s actions were a clear violation of New York law, stating that his financial maneuvers harmed the integrity of the financial system.
In summary, the New York appeals court is considering whether to alter the $454 million fraud judgment against Donald Trump, following concerns raised by the judges. Trump’s legal team continues to contest the lawsuit, asserting it is outside the statute of limitations and lacking in direct victims. A final ruling could come before Election Day 2024, but the case could stretch on through additional appeals.
