New York civil fraud judgment and August 2025 reversal of penalty
On February 16, 2024, New York Supreme Court Justice Arthur Engoron ordered Donald Trump and co-defendants to pay about $464 million ($354,868,768 in disgorgement plus $98.6 million in prejudgment interest) for persistent financial statement fraud. On August 21, 2025, the Appellate Division First Department threw out the entire monetary penalty as constitutionally excessive in a 323-page opinion (5-0 on the penalty, divided on liability). The case is on further appeal to the New York Court of Appeals; the underlying liability finding was not vacated.
On February 16, 2024, New York Supreme Court Justice Arthur F. Engoron entered judgment in *People of the State of New York v. Donald J. Trump et al.*, the civil fraud action brought by Attorney General Letitia James in September 2022. Engoron found Donald Trump, his two adult sons, the Trump Organization, and several controlled entities liable for persistent fraud under New York Executive Law Section 63(12) for years of inflated financial statements used to obtain favorable loan and insurance terms. He ordered disgorgement of $354,868,768 in ill-gotten gains and added $98.6 million in prejudgment interest, for a total monetary penalty of about $464 million. He also imposed multi-year bans on Trump's service as an officer or director of any New York corporation and on the participation of Donald Trump Jr. and Eric Trump in Trump Organization management roles.
Trump appealed and posted a $175 million bond, after the Appellate Division reduced the bond requirement from a full supersedeas amount in March 2024. Oral argument was held in September 2024 before a five-judge panel of the Appellate Division, First Department. On August 21, 2025, the panel issued a 323-page opinion that vacated the entire monetary penalty as constitutionally excessive under the Eighth Amendment's Excessive Fines Clause. On the question of penalty, the court was unanimous, 5-0. On the underlying findings of liability, the panel was divided, but a majority preserved the core liability ruling that Trump and the Trump Organization had violated Section 63(12).
The Attorney General sought review by the New York Court of Appeals, the state's highest court. As of the cutoff date, the case remains on appeal. The August 2025 reversal eliminated, for the time being, the largest single monetary judgment ever entered against Trump in any forum, but it did not vacate the predicate finding that the financial statements at issue were fraudulent. Reporting by CBS News and ABC News on the August 2025 reversal noted that the Appellate Division specifically declined to disturb the trial court's factual findings on the use of false valuations.
Sources
- New York Attorney General press release on judgment, February 16, 2024
- CBS News, coverage of August 21, 2025 Appellate Division reversal
- ABC News, coverage of August 21, 2025 Appellate Division reversal