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Appeal court judges had tough questions for New York prosecutors on Thursday as Donald Trump asked them to throw out a $454 million civil fraud judgment against him. They wanted to know why the penalties were set at almost half a billion dollars and who had been harmed in a case where neither side had lost money.
It is the latest twist in Trump’s multiple legal cases that are playing out as he campaigns to return to the White House . Justice Arthur Engoron in February ordered the former president pay $454.2 million in penalties and interest for inflating his net worth to dupe lenders and insurers into giving him better terms. The civil case was brought by New York state Attorney General Letitia James.
The lawyers were back in court on Thursday as Trump seeks to have the judgement thrown out. The panel of five appeal judges bombarded Deputy New York Solicitor General Judith Vale with questions about the extent of James’s authority, the lack of victims in the conduct and the size of the penalty.
At least two of the judges seemed skeptical of the case against Trump, and interrupted her opening statement to ask whether there were other examples of the state suing over private business transactions between sophisticated parties using a law designed to protect market integrity. ‘The immense penalty in this case is troubling,’ said Justice Peter Moulton. ‘How do you tether the amount that was assessed by the Supreme Court to the harm that was caused here where the parties left these transactions happy?’
Vale responded: ‘Although this is a large number, it’s a large number for a couple reasons. One, because there was a lot of fraud and illegality.’ Trump arrived in New York on Thursday afternoon and is expected to address reporters at Trump Tower. But he was not present in court. The case is one of a number of legal entanglements Trump has faced since leaving the White House in 2021.
He owes nearly $90 million in federal civil penalties for defaming a writer who accused him of sexual abuse, and was convicted in May on criminal charges stemming from hush money paid to a star. Trump has denied all wrongdoing and has said the cases were brought to interfere with his campaign. Justice David Friedman pressed Vale on whether there was any precedent for the attorney general suing over transactions involving sophisticated parties where neither ‘lost any money.’
‘Every case that you cite involves damage to consumers, damage to the marketplace. … We don’t have anything like that here,’ Friedman said. The case stemmed from Trump’s leadership of his family real estate company, the Trump Organization, before he became president in 2017. Trump’s lawyer John Sauer told the judges that the case was brought too late and that it would be unfair to impose a ‘crippling financial penalty’ for the former president’s decades-old financial statements, which Engoron found were illegally inflated.
‘This case involves a clear-cut violation of the statute of limitations and relevant case law,’ Sauer said. Sauer also said that trial testimony showed that any discrepancies in Trump’s net worth were irrelevant to his lenders. ‘What is not disputed is the testimony that if the net worth had been as low as one million (dollars), the deal would’ve been exactly the same,’ Sauer said.
He added that none of Trump’s lenders and business partners were harmed by the discrepancies on the financial statements, an argument Trump’s lawyers have made throughout the case. “There were no victims, no complaints,” Sauer said.
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