Appeals court judges expressed skepticism on Thursday about New York’s civil fraud case against former President Donald Trump, as he seeks to overturn a nearly $500 million judgment related to his real estate practices. The case, brought by New York Attorney General Letitia James, accuses Trump of inflating his net worth to secure favorable loan terms from banks. In February, Judge Arthur Engoron ruled that Trump must pay $454.2 million in penalties for misleading lenders, but the former president argues the case is politically motivated.
During Thursday’s proceedings, the five-judge panel on New York’s Appellate Division raised concerns about whether James’ use of a state law, typically applied to consumer protection cases, was appropriate in a private business matter involving sophisticated parties. Justice David Friedman noted that the state’s cited cases usually involve harm to consumers or the marketplace, questioning the relevance in Trump’s case since no financial harm was reported by Trump’s lenders.
Judith Vale, New York’s deputy solicitor general, argued that Trump’s actions injected risk into the market, thus affecting market integrity. However, Trump’s lawyer, John Sauer, contended that the discrepancies in Trump’s net worth were irrelevant to lenders, as the financial terms would have remained the same. Sauer reiterated that no lenders suffered financial losses and claimed the case lacks victims.
The appeal stems from Engoron’s decision to penalize Trump for allegedly inflating asset values over a decade. This judgment threatens Trump’s business empire, which spans hotels, golf courses, and office buildings worldwide. With accumulating interest, Trump now faces a $478.3 million obligation.
Trump has denied any wrongdoing and labeled the case as politically driven. The legal battle is one of several he faces, including federal penalties and criminal charges. As Trump continues his 2024 presidential campaign, the outcome of this case could impact his business and political future.
