Trump Appeals $464 Million Ruling in New York Civil Fraud Case

Former President Donald Trump addresses the press at Mar-a-Lago in West Palm Beach, Fla., on Feb. 16, 2024. Joe Raedle/Getty Images

Attorneys for former President Donald Trump have formally appealed a New York civil fraud ruling against him and executives of The Trump Organization, in which they were ordered to pay more than $450 million.

“This appeal is taken from each and every part of the judgment insofar as defendants are aggrieved,” the notice of appeal filed on Feb. 26 reads, noting that the penalties in total add up to more than $464 million.

The appeal will be filed in the New York State Supreme Court, Appellate Division, First Department.

New York Attorney General Letitia James sued President Trump and other executives from The Trump Organization for fraud. After a three-month trial, New York Supreme Court Justice Arthur Engoron found all defendants liable on seven claims.

At the center of the case were the annual statements of financial condition for The Trump Organization. These weren’t official financial documents but marketing pieces in which executives summarized asset values to arrive at a total net worth figure for President Trump. The court found that these numbers were routinely inflated and that the use of these inflated values in deals defrauded banks and insurers, causing them to take undue risks.

Defense attorneys argue there was no harm to any party and no victim in the case. Representatives from Deutsche Bank and the Zurich Insurance Group testified that they had done their own analyses when doing business with The Trump Organization.

Penalties

The penalties included a $355 million fine in disgorgement, or recovery of ill-gotten gains, for President Trump, plus another $4 million each for Donald Trump Jr. and Eric Trump, and a $1 million fine for The Trump Organization’s chief financial officer, Allen Weisselberg. The penalties are subject to 9 percent interest and have been backdated depending on the entity at issue.

The organization also was assigned ongoing monitorship by a third party, former Judge Barbara Jones, and a risk compliance officer, whose reports to the court may result in additional penalties including the cancellation of business certificates.

Mr. Weisselberg and the former comptroller of The Trump Organization, Jeffrey McConney, were also permanently banned from doing business in the industry, while President Trump was barred for three years. Eric Trump and Donald Trump Jr. were barred from holding executive positions for two years.

$400 Million ‘Scare Tactic’?

To appeal, President Trump needed to pay a $400 million deposit or bond, covering the cost of his penalties including the interest, into an escrow account.

Last month, President Trump’s attorney, Alina Habba, told Fox News that it was “no coincidence” that the court ordered such a hefty bond and that it was an amount he was prepared to pay.

“What they’re trying to do between this case [and] my last case is put [Trump] out of business,” Ms. Habba said. “It’s not gonna work, number one. Number two, what they’re doing is a scare tactic. Unfortunately, they picked the wrong guy to pick on, in my opinion, because he’s strong, he’s resilient and he happens to have a lot of cash.”

Not long before the fraud verdict was issued, President Trump was ordered to pay $83 million in a separate civil trial. Writer E. Jean Carroll accused the former president of defaming her when he responded to her allegations that he sexually assaulted her in the 1990s, and a jury determined the penalty amount after a brief trial in January.

Legal scholar Jonathan Turley pointed out that the deposit rule “magnifies the unfairness of this New York law that does not require that anyone actually lose money to claim hundreds of millions from a company.”

He is among the many critics to question the heavy verdict against President Trump in a case that named no victims. The ruling even led New York Gov. Kathy Hochul to reassure businesses to stay in the state.

“This is really an extraordinarily unusual circumstance that the law-abiding, rule-following New Yorkers who are businesspeople have nothing to worry about because they’re very different from Donald Trump and his behavior,” the governor said on WABC 770 radio.

Mr. Turley said the reassurance essentially amounted to “you are fine so long as you are not Trump” but that it remained that confidence in the objectivity of New York business and legal rules has been shaken.

“Letitia James is now the face of New York corporate law,” he wrote.

Critics of the verdict panned the penalties as excessive, and shortly after, President Trump posted a screenshot of the Eighth Amendment on social media that reads, “Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.”