Will Trump Be Required to Settle His Substantial Fraud Judgment? Appeals Court Examines if the Case Overreached

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Legal representatives for former President Donald Trump and the office of New York Attorney General Letitia James faced off on Thursday at a state appeals court to determine whether the trial court’s February civil fraud ruling of $454 million against Trump—which has since increased to over $478 million with interest—should stand.

Several of the five Manhattan judges reviewing the appeal showed a keen interest in defining the boundaries of the attorney general’s authority to prosecute businesses under the fraud statute applied in Trump’s case. Trial Judge Arthur Engoron found that Trump had violated the statute by consistently misleading lenders for years through significant overvaluations of his assets, securing more favorable loan terms as a result.

Among the judges, only Judge David Friedman appeared to clearly view the lawsuit against Trump as inappropriate. Friedman interrupted Judith Vale, the attorney representing James’ office, just six words into her initial sentence about the case to pose a pre-prepared question. He inquired whether the attorney general had previously sued with the intent to “upset a private business transaction” under similar circumstances. He argued that the property and business valuations deemed excessively inflated by Engoron are “inherently subjective” and questioned whether they resulted in any actual harm.

Vale countered by stating that Trump’s inflated asset values created risks for lenders. She further explained that the fraud statute was designed not only to protect these lenders but also to safeguard “the honest business people who don’t engage in misconduct and therefore don’t receive the same benefits as those involved here.”

Defining the Attorney General’s Authority

Beyond Friedman, other judges sought to clarify the extent of the attorney general’s power to file lawsuits under the fraud statute but did not explicitly suggest that the lawsuit against Trump exceeded these limits. Judges John Higgitt and Dianne Renwick questioned whether there are boundaries to what the attorney general can address to prevent corporate fraud.

“What are the guardrails?” Higgitt asked.

Renwick added, “If the threat of harm—or whatever the ripple effect—is so remote, how remote does it have to be for the AG to follow through, or until it’s outside the scope of the statute?”

Vale responded by emphasizing that the statute was broadly written to uphold honesty and integrity in the marketplace and to prevent fraud and illegal activities.

Renwick also questioned Trump’s attorney, John Sauer, regarding the statute’s breadth, noting that the law clearly allows the attorney general to sue when someone engages in repeated fraudulent or illegal acts. She asked, “So why isn't the language of the statute here—referring to the repeated and fraudulent illegal acts, or persistent fraud or illegality—why doesn’t that define the scope of the statute?”

Sauer replied that a previous appeals court decision established that the fraud statute applies only when the defendant has demonstrated a capacity or tendency to deceive or when there is “an atmosphere conducive to fraud.” He argued that in Trump’s case, there were no victims or complaints, and lenders conducted their own due diligence before issuing loans. “All that is powerful evidence that there was no capacity or tendency to deceive,” Sauer stated.

At one point, Judge Peter Moulton addressed Vale, noting that several questions about the attorney general’s authority’s scope had arisen, indicating that some limitation must exist. “So what is the limiting principle?” he asked.

Vale responded that the attorney general can only sue when there is illegality. Additionally, the fraud in question must be relevant to the business and must involve, as Sauer mentioned, a capacity or tendency to deceive.

What’s at Stake for Trump

Despite facing four criminal cases, Trump has maintained a strong interest in the state’s lawsuit. He attended numerous days of the months-long trial last fall and winter and has publicly criticized Engoron on social media. While Forbes and Bloomberg estimated Trump’s net worth to be in the billions in 2024, he objected to having to post a bond equal to the full judgment during the appeal, calling it “a practical impossibility.”

Subsequently, the appeals court intervened to assist the Republican presidential nominee by reducing his appeal bond to $175 million. In April, Trump and several co-defendants posted this bond, preventing the immediate seizure of his assets before the appeal concluded.

Trump’s legal team argues that the entire judgment should be dismissed because James filed her lawsuit too late and that he significantly undervalued his assets. “President Trump’s estimates of his net worth were very low and conservative, not high—the exact opposite of what (James) alleges,” the Trump brief to the Manhattan appeals court states.

In their brief, James’ legal team provided specific instances of what they described as ongoing fraud in Trump’s financial statements, such as tripling the size of his Trump Tower penthouse and ignoring deed restrictions affecting the value of his Mar-a-Lago club. They asserted that Trump and his co-defendants “created and used financial statements rife with blatant misrepresentations and omissions to maintain loans worth more than half a billion dollars and to generate over $360 million in ill-gotten profits.”

In addition to the $454 million judgment against Trump and some of his entities, Engoron also imposed approximately $10 million in liability on former Trump Organization executive Allen Weisselberg and Trump’s two eldest sons, Don Jr. and Eric. The total fraud judgment from February, exceeding $464 million against all defendants, has now grown to over $489 million with interest accruing at 9% annually.

Potential Reduction of Trump and Co-defendants’ $489 Million Liability

Judge Peter Moulton at one point suggested that the magnitude of the fraud judgment might be problematic. “The immense penalty in this case is troubling,” he told government lawyer Judith Vale. “So how do you tether the amount that was assessed by (the trial court) to the harm that was caused here, where the parties left these transactions happy about how things went down?”

Vale responded by explaining that the fraud judgment requires Trump and his co-defendants to repay the benefits they gained through fraud. The substantial amount reflects the extensive fraud involved, impacting the defendants’ loan interest rates by 4-8% over seven years. “That is an enormous benefit that they got from the misconduct, and it is not an excuse to say, ‘Well, our fraud was really successful so we should get some of the money,’” Vale stated.

Trump’s Arguments on Appeal

Trump is presenting several arguments in an attempt to have the appeals court overturn or significantly reduce the judgment. One primary argument is that violating the New York fraud statute is impossible if no one was harmed, and Trump maintains that no harm occurred. His lawyers highlight that the Trump Organization repaid Deutsche Bank hundreds of millions of dollars in loans after providing the financial statements Engoron deemed fraudulent.

According to the Trump brief, the representations in the financial statements “involved no victims, no complaints, no evidence of causation, no injuries, no losses to any business or consumer, and no impact on any public interest.”

James’ office countered that the statute is not solely intended to address past harm but also to prevent future harm. “A core focus of (the fraud statute) has thus always been protecting both the integrity of the marketplace and honest market participants from the risks of misconduct—even if those risks have not yet come to pass,” James’ lawyers wrote in their brief.

Additionally, Trump argues that James filed her lawsuit too late concerning most of her allegations. He contends that applying the correct time limits under New York law would eliminate nearly $351 million of the more than $464 million total February judgment. However, Engoron dismissed this argument, ruling that the lawsuit’s timeframe was extended because Trump continued to submit fraudulent financial statements to lenders after the relevant loan transactions and agreed to further extend the filing deadline during James’ investigation.

Consequences if Trump Loses the Appeal: Asset Seizure by New York

Should Trump lose his appeal and fail to satisfy the full judgment, James could swiftly move to seize his bank accounts and real estate. The judgment automatically places a lien on Trump’s Manhattan real estate since Manhattan is within the same county where the judgment originated. However, James could also target properties in other jurisdictions, each with its own foreclosure laws.

In New York, James would have the authority to redirect rental payments from tenants of Trump Organization properties to satisfy the judgment. Additionally, she could quickly freeze Trump’s New York bank accounts.Hoda Kotb to Depart NBC's ‘Today’ Show

Hoda Kotb, co-host of NBC’s “Today” show, announced on Thursday that she will be leaving her position early next year. Kotb, a prominent figure on NBC, has been co-hosting alongside Savannah Guthrie since 2017, following the departure of Matt Lauer due to allegations of inappropriate behavior.

During her emotional announcement on “Today,” Kotb shared, “It was time for me to turn the page at 60. I’ve decided this is the right time for me to move on. My daughters, whom I adopted later in life, deserve a bigger piece of my time.”

Regarded as a vital part of the “Today” show’s fabric, Kotb not only co-hosts the first two hours but also leads the 10 am “Hoda & Jenna” talk show. She described her decision to leave as “the hardest decision of my life,” emphasizing her desire to spend more time with her young daughters.

Kotb joined NBC in 1998 as a correspondent for “Dateline” and became the co-host of the 10 am hour of “Today” in 2008 with Kathie Lee Gifford, a role she held until Jenna Bush Hager took over in 2019. Guthrie expressed her reluctance to see Kotb leave, stating, “We don’t want to imagine this place without you... It’s complicated because we love you so much.” However, she also acknowledged Kotb’s courage in choosing to leave at the height of her career.

Kotb’s departure signifies one of the most significant shifts in morning television in over a decade. Shows like “Today” and ABC’s “Good Morning America” are highly profitable and remain cultural staples, even as the overall broadcast industry contracWill Trump Be Required to Settle His Substantial Fraud Judgment? Appeals Court Examines if the Case Overreached

Legal representatives for former President Donald Trump and the office of New York Attorney General Letitia James faced off on Thursday at a state appeals court to determine whether the trial court’s February civil fraud ruling of $454 million against Trump—which has since increased to over $478 million with interest—should stand.

Several of the five Manhattan judges reviewing the appeal showed a keen interest in defining the boundaries of the attorney general’s authority to prosecute businesses under the fraud statute applied in Trump’s case. Trial Judge Arthur Engoron found that Trump had violated the statute by consistently misleading lenders for years through significant overvaluations of his assets, securing more favorable loan terms as a result.

Among the judges, only Judge David Friedman appeared to clearly view the lawsuit against Trump as inappropriate. Friedman interrupted Judith Vale, the attorney representing James’ office, just six words into her initial sentence about the case to pose a pre-prepared question. He inquired whether the attorney general had previously sued with the intent to “upset a private business transaction” under similar circumstances. He argued that the property and business valuations deemed excessively inflated by Engoron are “inherently subjective” and questioned whether they resulted in any actual harm.

Vale countered by stating that Trump’s inflated asset values created risks for lenders. She further explained that the fraud statute was designed not only to protect these lenders but also to safeguard “the honest business people who don’t engage in misconduct and therefore don’t receive the same benefits as those involved here.”

Defining the Attorney General’s Authority

Beyond Friedman, other judges sought to clarify the extent of the attorney general’s power to file lawsuits under the fraud statute but did not explicitly suggest that the lawsuit against Trump exceeded these limits. Judges John Higgitt and Dianne Renwick questioned whether there are boundaries to what the attorney general can address to prevent corporate fraud.

“What are the guardrails?” Higgitt asked.

Renwick added, “If the threat of harm—or whatever the ripple effect—is so remote, how remote does it have to be for the AG to follow through, or until it’s outside the scope of the statute?”

Vale responded by emphasizing that the statute was broadly written to uphold honesty and integrity in the marketplace and to prevent fraud and illegal activities.

Renwick also questioned Trump’s attorney, John Sauer, regarding the statute’s breadth, noting that the law clearly allows the attorney general to sue when someone engages in repeated fraudulent or illegal acts. She asked, “So why isn't the language of the statute here—referring to the repeated and fraudulent illegal acts, or persistent fraud or illegality—why doesn’t that define the scope of the statute?”

Sauer replied that a previous appeals court decision established that the fraud statute applies only when the defendant has demonstrated a capacity or tendency to deceive or when there is “an atmosphere conducive to fraud.” He argued that in Trump’s case, there were no victims or complaints, and lenders conducted their own due diligence before issuing loans. “All that is powerful evidence that there was no capacity or tendency to deceive,” Sauer stated.

At one point, Judge Peter Moulton addressed Vale, noting that several questions about the attorney general’s authority’s scope had arisen, indicating that some limitation must exist. “So what is the limiting principle?” he asked.

Vale responded that the attorney general can only sue when there is illegality. Additionally, the fraud in question must be relevant to the business and must involve, as Sauer mentioned, a capacity or tendency to deceive.

What’s at Stake for Trump

Despite facing four criminal cases, Trump has maintained a strong interest in the state’s lawsuit. He attended numerous days of the months-long trial last fall and winter and has publicly criticized Engoron on social media. While Forbes and Bloomberg estimated Trump’s net worth to be in the billions in 2024, he objected to having to post a bond equal to the full judgment during the appeal, calling it “a practical impossibility.”

Subsequently, the appeals court intervened to assist the Republican presidential nominee by reducing his appeal bond to $175 million. In April, Trump and several co-defendants posted this bond, preventing the immediate seizure of his assets before the appeal concluded.

Trump’s legal team argues that the entire judgment should be dismissed because James filed her lawsuit too late and that he significantly undervalued his assets. “President Trump’s estimates of his net worth were very low and conservative, not high—the exact opposite of what (James) alleges,” the Trump brief to the Manhattan appeals court states.

In their brief, James’ legal team provided specific instances of what they described as ongoing fraud in Trump’s financial statements, such as tripling the size of his Trump Tower penthouse and ignoring deed restrictions affecting the value of his Mar-a-Lago club. They asserted that Trump and his co-defendants “created and used financial statements rife with blatant misrepresentations and omissions to maintain loans worth more than half a billion dollars and to generate over $360 million in ill-gotten profits.”

In addition to the $454 million judgment against Trump and some of his entities, Engoron also imposed approximately $10 million in liability on former Trump Organization executive Allen Weisselberg and Trump’s two eldest sons, Don Jr. and Eric. The total fraud judgment from February, exceeding $464 million against all defendants, has now grown to over $489 million with interest accruing at 9% annually.

Potential Reduction of Trump and Co-defendants’ $489 Million Liability

Judge Peter Moulton at one point suggested that the magnitude of the fraud judgment might be problematic. “The immense penalty in this case is troubling,” he told government lawyer Judith Vale. “So how do you tether the amount that was assessed by (the trial court) to the harm that was caused here, where the parties left these transactions happy about how things went down?”

Vale responded by explaining that the fraud judgment requires Trump and his co-defendants to repay the benefits they gained through fraud. The substantial amount reflects the extensive fraud involved, impacting the defendants’ loan interest rates by 4-8% over seven years. “That is an enormous benefit that they got from the misconduct, and it is not an excuse to say, ‘Well, our fraud was really successful so we should get some of the money,’” Vale stated.

Trump’s Arguments on Appeal

Trump is presenting several arguments in an attempt to have the appeals court overturn or significantly reduce the judgment. One primary argument is that violating the New York fraud statute is impossible if no one was harmed, and Trump maintains that no harm occurred. His lawyers highlight that the Trump Organization repaid Deutsche Bank hundreds of millions of dollars in loans after providing the financial statements Engoron deemed fraudulent.

According to the Trump brief, the representations in the financial statements “involved no victims, no complaints, no evidence of causation, no injuries, no losses to any business or consumer, and no impact on any public interest.”

James’ office countered that the statute is not solely intended to address past harm but also to prevent future harm. “A core focus of (the fraud statute) has thus always been protecting both the integrity of the marketplace and honest market participants from the risks of misconduct—even if those risks have not yet come to pass,” James’ lawyers wrote in their brief.

Additionally, Trump argues that James filed her lawsuit too late concerning most of her allegations. He contends that applying the correct time limits under New York law would eliminate nearly $351 million of the more than $464 million total February judgment. However, Engoron dismissed this argument, ruling that the lawsuit’s timeframe was extended because Trump continued to submit fraudulent financial statements to lenders after the relevant loan transactions and agreed to further extend the filing deadline during James’ investigation.

Consequences if Trump Loses the Appeal: Asset Seizure by New York

Should Trump lose his appeal and fail to satisfy the full judgment, James could swiftly move to seize his bank accounts and real estate. The judgment automatically places a lien on Trump’s Manhattan real estate since Manhattan is within the same county where the judgment originated. However, James could also target properties in other jurisdictions, each with its own foreclosure laws.

In New York, James would have the authority to redirect rental payments from tenants of Trump Organization properties to satisfy the judgment. Additionally, she could quickly freeze Trump’s New York bank accounts.ts. Network executives tend to manage transitions cautiously due to the high stakes involved in ratings.

In a letter to the “Today” staff, Kotb expressed her gratitude, stating, “Happily and gratefully, I plan to remain a part of the NBC family, which has been the longest work relationship I’ve cherished. I’ll be around. Family is family, and you will always be a part of mine.”

NBC has not yet announced a successor for Kotb and is expected to take its time in making that decision.