The New York Appellate Division threw out a civil fraud disgorgement order that would have required Donald Trump and associates to pay nearly $515 million, deeming the penalty excessive under the Eighth Amendment. The suit originated with New York Attorney General Letitia James, who alleged that Trump inflated financial records to obtain advantages from insurers, banks and other institutions. A lower court had ordered $355 million in penalties in February 2024, which grew to about $515 million with interest. Two appellate judges said injunctive relief was appropriate to curb business practices but that the disgorgement violated the Constitution. Judges remained divided on the underlying fraud findings.
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, two of the panel's judges, Dianne T Renwick and Peter H Moulton, wrote in one opinion.
The case stems from a civil suit brought by New York Attorney General Letitia James, who argued that Trump had inflated his financial records in order to secure advantages with insurance companies, banks and other financial institutions. In February 2024, a lower court had ordered Trump to pay $355m in penalties, an amount the appeals court called into question. That amount has since grown to about $515m due to accumulating interest.
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