Prosecutors with the New York Attorney General’s Office were pressed by a state appeals court on Thursday that is reviewing former President Donald Trump‘s $454 million civil fraud judgment handed down earlier this year.
The former president and others associated with the Trump Organization were found liable by New York Judge Arthur Engoron in February for misleading lenders and insurance companies to obtain more favorable terms. The order stems from a lawsuit brought by New York Attorney General, Letitia James, who investigated Trump’s organization for years before bringing the lawsuit against him in September 2022.
Trump has decried the lawsuit and his nearly half a billion in financial penalties as a form of “election inference.” His lawyers appealed the ruling to New York’s intermediate appellate court, arguing in part that the size of the penalties was “draconian” and that some of the allegations brought against Trump were outside the state’s statute of limitation, meaning they should have never been brought to trial.
A five-judge panel heard arguments from both sides of the case on Thursday and a pair of judges appeared to hint at being receptive to some of Trump’s arguments, including that the entities the former president is accused of defrauding did not lose money or were otherwise harmed by his actions.
Former President Donald Trump, left, speaks at a rally on September 24, 2024, in Savannah, Georgia. New York Attorney General Letitia James, right, speaks during a press conference on February 16, 2024, in New York City. An appeals court is hearing arguments as Trump seeks to have a $454 million civil fraud ruling tossed out.
Brandon Bell/Getty Images;Michael M. Santiago/Getty Images
Justice David Friedman of the appellate court pressed Deputy New York Solicitor General Judith Vale on the law that James had used to bring the lawsuit against Trump in the first place, stating that it “hardly seems to justify bringing an action to protect Deutsche Bank against President Trump which is what you have here.”
“You have two really sophisticated players in which no one lost any money,” Friedman added, according to CNN‘s report on the matter.
Trump has made a similar argument throughout the lawsuit’s proceedings. During trial testimony in November 2023, he argued that there was no basis for him to face penalties because no one was harmed by his financial documents. His lawyers also argued in court that Trump never instructed anyone to inflate his assets’ value and that any discrepancies in the financial records should have been flagged by the outside accountants who helped prepare the statements.
“There were no victims because the banks made a lot of money,” Trump said in days leading up to Engron issuing his ruling in February, as reported by the Associated Press.
Vale argued on behalf of James’ office on Thursday that the statute used in bringing the suit against Trump does not require proof that entities like Deutsche Bank were harmed by the former president misstating his financial statements. The state prosecutor also pointed out that the bank pulled out of their agreement with Trump once allegations of fraud were raised.
The New York appeals panel also questioned the size of the penalty imposed by Engoron. Justice Peter Moulton told Vale on Thursday that the “immense penalty in this case is troubling,” adding, “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 acknowledged that while the penalty was “a large number, it’s a large number for a couple reasons.”
“One, because there was a lot of fraud and illegality,” the prosecutor said, according to reporting by CBS News. “It went on for seven years. Another reason is because the guarantee and the financial statements each year worked to get enormously favorable interest rate savings to the defendants.”
Newsweek reached out to James’ office for comment on Thursday’s hearing.
The New York appellate court is expected to issue its decision on Trump’s case in about a month, potentially lining up with Election Day on November 5. Depending on the outcome of the appeals ruling, either side could also petition the state’s highest court to take up the case.
The fraud suit is one of several pending legal matters against Trump as he runs for a second term in the White House. The former president previously vowed to take the lawsuit from James “all the way up to the U.S. Supreme Court if necessary.”
