NEW YORK — Appeals court judges appeared to question the legitimacy of the civil fraud case against Donald Trump as the former president urged the court Thursday to overturn a judgment against him that has ballooned, with interest, to more than $478 million.
In February, a Manhattan trial judge found that Trump and other defendants — including his adult sons, Don Jr. and Eric, along with several business associates — fraudulently inflated his net worth and the value of his real estate properties to obtain favorable rates from banks and insurers.
The nearly half-billion-dollar penalty ordered by the trial judge initially threatened to trigger a financial crisis for Trump. But a New York appeals court sharply reduced the amount of the bond he had to post to avoid immediate enforcement of the verdict. Trump is now asking that same court to toss out the verdict entirely.
During oral arguments on Thursday, some members of the five-judge appeals court panel suggested that New York Attorney General Tish James had overstepped by using the particular New York fraud statute she used to bring the case against Trump. As soon as Deputy Solicitor General Judith Vale, arguing for James, began her opening remarks, she was cut off by Associate Justice David Friedman, who questioned whether her office had ever before used the statute “to upset a private business transaction that was between equally sophisticated partners.”
Associate Justice Llinet Rosado chimed in once Friedman finished to add, “and little to no impact on the public marketplace.”
The justices’ questions echoed one of Trump’s central lines of defense: He has argued that no one was harmed by the inflated valuations.
Vale disputed that suggestion, saying “there was absolutely a public impact and a public interest here,” but she continued to field similar questions from other judges.
“I think you hear underneath all these questions, the question of mission creep,” Associate Justice Peter Moulton said. “Has 6312” — the statute in question — “morphed into something that it was not meant to do?”
“I will stress, your honor, that this does have harm to the public and to the markets,” Vale said in response.
Trump’s lawyer, D. John Sauer, also fielded questions about his arguments as the former president seeks to eliminate one of his most serious financial burdens as he heads into the final stretch of the presidential race.
Sauer argued that in the deals in question, there were “no victims, no complaints.” But Moulton wondered, “What about deterrence?”
Even if the transactions at issue in the Trump case “went down fine,” Moulton said, similar fraudulent conduct in the future “might not go down well, and someone would be harmed by that.”
The panel didn’t rule Thursday.
The former president hasn’t had to turn over the full amount of the judgment because a panel of state appeals judges allowed him to put up only a $175 million bond while he appeals the verdict.
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