A New York appeals court is currently taking a closer look at the potential reversal or reduction of a $454 million civil fraud judgment against former President Donald Trump.

The underlying judgment stems from a lawsuit filed by New York Attorney General Letitia James, accusing Trump of inflating the value of his assets to deceive banks and insurers, and the appeals panel reviewing the outcome now appears skeptical about its validity, as Fox News reports.

Trump and his legal team argue that the ruling is excessively harsh and is based on transactions that occurred over a decade ago, possibly violating the statute of limitations.

The lawsuit, filed by James, initially resulted in a lower $355 million penalty, but that amount has ballooned due to interest accruals, and it currently sits at around $470 million.

Trump's Legal Team Seeks Overturn

On Thursday, oral arguments were heard by a five-judge panel in the New York appeals court. While Trump did not attend, his attorney D. John Sauer represented him, delivering arguments that centered on the fairness of the judgment.

Sauer contended that the case was an overreach of New York’s consumer protection laws, pointing out that no actual victims or complaints had been presented by any of Trump's lenders or insurers. According to Sauer, the transactions in question occurred over a decade ago, exceeding the legal statute of limitations, which is why he argued that the verdict should be overturned.

“If the verdict is not overturned, people can’t do business in real estate without fear,” Sauer warned the court. He also emphasized that Trump’s financial statements included disclaimers urging banks to make their own assessments, further undermining the claim of fraud.

Engoron’s Ruling Under Scrutiny

In September 2023, New York Judge Arthur Engoron ruled that Trump and the Trump Organization were guilty of fraud, concluding that they had exaggerated asset values to secure favorable financial terms with banks and insurers. The court found that Trump had inflated the value of assets like Trump Tower and various properties, causing financial misrepresentation.

Engoron’s decision was seen by Trump’s legal team as an overstep, and they labeled the judgment “draconian, unlawful, and unconstitutional.” Trump’s attorneys maintain that the figures in his financial statements were not substantially inaccurate and argued there was no evidence of deliberate accounting fraud.

Trump’s legal team took issue with the bond that Trump was required to post as part of the appeal, initially set at $454 million, calling it an unprecedented and unmanageable amount. In a prior ruling, the appeals court reduced the bond payment to $175 million, which Trump has since fulfilled. However, the overarching $454 million judgment is still at stake, with Trump's team determined to fight it further.

State Defends Fraud Verdict

Despite Trump's assertions, the State remains confident that the judgment is backed by clear evidence. The State’s legal team argued that Trump and his organization had misrepresented the value of assets to mislead financial institutions, justifying the penalties imposed.

Judge Peter H. Moulton, one of the appeals judges, expressed concerns during Thursday’s proceedings, particularly with regard to how the lawsuit had evolved over time. “The immense penalty in this case is troubling,” Moulton remarked, signaling that the court might be open to reconsidering the severity of the judgment.

The court is expected to deliver its ruling in the coming weeks, with a final decision anticipated before the upcoming Election Day on Nov. 5.

Expert Witnesses Testify on Trump’s Behalf

As part of the trial, Trump’s legal team presented expert witnesses who testified in defense of his business practices. Eli Bartov, an accounting professor at NYU, reviewed Trump’s financial statements and stated that there was no indication of accounting fraud. Bartov also pointed to certain discrepancies, such as the valuation of Trump’s penthouse, but he explained these variations as potential errors rather than deliberate misrepresentations.

Witnesses from Deutsche Bank, one of Trump’s longtime financial partners, also testified that they had been eager to continue doing business with Trump, considering him a valuable client. The testimony from Deutsche Bank executives supports Trump’s argument that no lender or insurer had raised any concerns regarding his financial dealings.

Trump Vows to Fight Case to Supreme Court

Throughout the legal battle, Trump and his family have denied any wrongdoing, insisting that his assets were often undervalued rather than inflated. Trump remains resolute in his defense, pledging to fight the case "all the way up to the U.S. Supreme Court if necessary."

As the case progresses, Trump’s legal team continues to push for the appeals court to reduce the penalties or dismiss the case entirely. They argue that the financial penalty and legal outcome would set a dangerous precedent for the real estate industry, creating an environment of fear and uncertainty for other business owners.

Conclusion

The New York appeals court’s decision on Trump’s $454 million fraud judgment could significantly impact both Trump’s financial future and the real estate industry as a whole.

With arguments from Trump’s attorneys focusing on the statute of limitations, lack of victims, and the excessive nature of the penalty, the appeals court is now tasked with determining the next steps.

A ruling is expected within weeks, potentially before Election Day, and Trump has vowed to continue fighting, possibly all the way to the U.S. Supreme Court.