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From executive producer Isaac Saul, this is Tangle Foreign.
Isaac Saul
Good afternoon and good evening and welcome to the Tangle Podcast, a place we get views from across the political spectrum, some independent thinking, and a little bit of my take. I'm your host Isaac Saul, and on today's episode we're going to be talking about the voided civil fraud penalty against President Donald Trump. We're going to break down exactly what happened, revisit some writing of mine from the past, and then of course share some views from the left and the right. Today is Tuesday, August 26th, and I'm going to send it over to John to break down some of the big stories in the news and today's main topic. And I'll be back for my take.
John Law
Thanks, Isaac, and welcome everybody. Here are your quick hits for today. First up, President Donald Trump announced he will fire Federal Reserve governor Lisa Cook, citing allegations of mortgage fraud. Trump's legal authority to remove Cook is unclear, and Cook said she would not leave the position. Number two, President Trump signed an executive order directing Defense Secretary Pete Hegseth to create specialized units in the National Guard to respond to public order issues. Separately, the president signed an executive order directing Attorney General Pam Bondi to identify jurisdictions that have eliminated cash bail, then paused or eliminate their federal funding. Separately, Trump signed an executive order calling for penalties for people who burned the American flag in a manner that is likely to incite imminent lawless action. Number three, Israeli tank shelling on Nasser Hospital in the southern Gaza Strip killed at least 20 people, including five journalists. Israeli Prime Minister Benjamin Netanyahu said Israel deeply regrets the tragic mishap and is investigating the incident. Number four, thousands of homes in California and Oregon are under evacuation orders and warnings due to ongoing fires. And number five, a federal judge instructed the Trump administration that it is forbidden from deporting Kilmar Abrego Garcia until a hearing is held on his removal.
Isaac Saul
Now to this breaking Just moments ago, a major win for President Donald Trump after a New York appeals court says.
John Law
They will throw out his massive civil fraud penalty that could have cost him over $500 million. The details on Thursday, a New York appeals court threw out a $527 million penalty against President Donald Trump resulting from a 2024 civil fraud judgment. The 5Justice panel unanimously agreed to dismiss the fine, but disagreed on other points, ultimately deciding to leave the other pen against Trump in place, including barring Trump from serving in top roles at any New York company for three years, extending a similar ban to his sons Eric and Donald Jr. For two years, and installing an independent monitor for the Trump Organization. For context, in September 2022, New York Attorney General Letitia James filed a civil fraud lawsuit against then former President Trump, the Trump Organization and other associates, including three of Trump's children, in a Manhattan court alleging that he had misled banks by falsely inflating the value of their ass to benefit the company. James sought $250 million in financial penalties and to appoint an independent monitor for the Trump organization. In February 2024, following a contentious trial, Judge Arthur Engoron ordered Trump to pay over $354 million in penalties and barred him from serving in a top role of any New York company for three years. The fine accrued interest and totaled over $450 million with prejudgment interest at the time of the verdict. Trump immediately appealed the judgment, asking an appeals court to determine if Judge Engoron committed errors of law and or fact and whether he acted in excess of his jurisdiction. We covered Trump's civil fraud judgment and you can check that out with a link in today's episode. Description In Thursday's ruling, Justice Peter Moulton wrote that the penalty against Trump was an excessive fine that violates the Eighth Amendment of the United States Constitution, adding, while harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half billion dollar award to the state. Four of the five justices voted to uphold the fraud finding against Trump, but each found problems in Engoron's handling of the case. In their written opinions, two justices expressed support for the other issued penalties, two favored a new trial and another pushed to dismiss the case altogether. President Trump celebrated the outcome, claiming total victory in a post on Truth Social. I greatly respect the fact that the court had the courage to throw out this unlawful and disgraceful decision that was hurting business all throughout New York State, he added. Attorney General James said she will appeal the decision to New York's highest court, the Court of Appeals. James is an outspoken critic of the President and ran for Attorney General on promises to use every area of the law to investigate the president and his businesses. While Trump had not paid the full fine prior to the ruling, he was required to post a $175 million bond to prevent collection while he pursued his appeal. He is now eligible to have that money returned. Separately, the President can still appeal the civil fraud finding and associated non financial penalties against him and the Trump Organization. Today we'll share arguments from the right and the left on the ruling and then Isaac's take.
Isaac Saul
We'll be right back after this quick break.
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And get a've@lemonade.com pet all right, first up, let's start with what the right is saying. The right welcomes the decision, framing it as a rebuke of Trump's politicized prosecutions. Some note the appellate judge's criticism of Judge Engoron's handling of the case. Others say Trump's claims of lawfare against him have been vindicated. The New York Post editorial board called the ruling the latest blow to Dem lawfare. The ridiculously enormous fine was meant to hamstring him as he ran for president. Though James and trial court Judge Arthur Engoron pretended it was about warning others not to imitate his supposedly fraudulent actionsactions that harmed exactly no one, the board wrote. Their decision doesn't void Engoron's finding that Trump defrauded lenders and insurers by overestimating the value of his assets, though the Court of Appeals, the state's top court, may do so. But either way, it makes the case appear even more pointless than it already was. Remember, James campaigned on promises to find something, anything to target Trump for a witch hunt, that is. That should have disqualified her. From the start, these nothing burger civil charges were the best she could find. If they wound up before a less biased judge than Engoron, they would have died long ago, the board said. As Judge Friedman suggested, Democrats thought if they couldn't stop Trump through normal democratic means, they'd get the courts to stop him to save democracy. They failed on both fronts. In Fox News, Jonathan Turley said Engoron gets the books thrown at him. In New York, a court revealed that a leading citizen had cooked the books by inflating questionable figures without any support in reality. Moreover, his wild overvaluation was widely viewed as motivated by self aggrandizement. The final reported figures are so absurdly inflated that they were rejected in their entirety. In the end, he was off by over half a billion dollars. That man is Judge Arthur Engoron, turley wrote. Judge David Friedman gave Enger on a close up. He detailed how the underlying law has never been used in the way it is being used in this case, namely to attack successful private commercial transactions negotiated at arm's length between highly sophisticated parties fully capable of monitoring and defending their own interests. Trump can now appeal the residual parts of the Engoron decision, imposing limits on the Trump family doing business in New York. Some of those limits could be moot by the time of any final judgment. Ironically, if Engoron had shown a modicum of restraint, he might have secured a victory. During the trial in New York, I said he would have been smart to impose a dollar fine and limited injunctive relief, turley said. Instead, Engoron chose to walk down the stairway into infamy. He was off by a half billion dollars, which could put him in the Bernie Madoff class of judges. In national review, Andrew C. McCarthy suggested the outcome is a significant victory for the president. Trump has not been completely vindicated, at least not yet. The Appellate Division was divided on the underlying merits of the case, but it left in place the lower court's fraud verdict. Moreover, some of the non financial injunctive penalties meted out by Judge Arthur Engoron, like James, an elected progressive Democrat, will remain in place, McCarthy said. Still, Trump could ultimately be vindicated in full. The case will now move to the Court of Appeals, the state's highest tribunal. The Appellate Division was skeptical from the outset about the astronomical penalty. The patent lack of fit between the wrong and the punishment explains why in one of its first actions in the case, the appellate court slashed the amount of the bond Trump was required to post in order to stop James from enforcing the judgment while the now president pursued his appeal, McCarthy wrote. Today is a very good day for President Trump, but he is playing with fire and seeking retribution against his tormentors by using the very same lawfare attacks. He can have a much more successful presidency if he accepts that he got his retribution by winning the election. All right, that is it for what the right is saying. Which brings us to what the left is saying. The left is mixed on the decision, with some calling it sound but arguing Trump should also heed its findings. Others highlight the non financial penalties that remain in place. Still others question why Trump would celebrate when the fraud conviction remains in place. The Washington Post editorial board wrote about Donald Trump and selective prosecution. A New York court not known for its friendliness toward Donald Trump threw out on Thursday an outrageous judgment against him. The White House will rightly celebrate this development, but it's also a good moment for the president's advisors to rethink the administration's own escalating lawfare campaign, the board said. The Thursday decision comes as the Trump administration is launching its own version of the show me the man and I'll show you the crime. Lawfare mortgage fraud seems to be the administration's weapon of choice, and it has referred James, Senator Adam Schiff and Lisa Cook, a member of the Federal Reserve Board of Governors, for criminal investigation. Trump officials would be wise to pay attention to the warning of David Friedman, the New York judge on the appeals panel most sympathetic to Trump's arguments. Friedman argued that James case amounted to a selective enforcement of a fraud statute in retaliation for President Trump's exercise of his First Amendment right to participate in the political process, the board wrote. Courts can mitigate the destructiveness of lawfare, but if politicians keep abusing the legal system, maybe not for long. In Slate, Shirin Ali suggested the ruling was not nearly the Trump victory it's being billed as. This is how the 2:2:1 ruling shook out. Justices Peter Moulton and Diane Renwick concluded that they would only vacate Trump's financial penalty, Justices John Higgitt and Yeanette Rosado would vacate the penalty and send the case back down for a retrial, and Justice David Freeman alone would have thrown this case out in its entirety and banned New York State from retrying the president on this, ali said. Ultimately, New York's high court will decide whether the fraud verdict stands and if Trump is actually off the hook for now, it seems like the price tag for wrongdoing will shrink, but that's as much as we can say. Meanwhile, James office has promised to appeal the appellate court's decision while also reminding us that only Trump's financial penalty has been vacated. Other limitations on the Trump Organization's ability to do business in New York remain in place, including a ban on Trump serving in top level positions at his own company for three years while his sons are Donald Trump Jr. And Eric Trump are banned for at least two years, Ali wrote. Despite how the headlines read that real consequence might still arrive in this case though, even if not in the form of a half billion dollar penalty. In above the Law, Joe Patrese said most people don't consider being called a fraud a win. The good news for Donald Trump is that a New York appellate nixed the nearly half billion dollar disgorgement judgment the Trump Organization owed for consistently defrauding financial institutions. The bad news is that the fractured court still agreed with the underlying judgment and his business operations are rightly enjoined, patrice wrote. The appellate opinion struck down that award, ruling that it amounted to an unconstitutional excessive fine as opposed to a mere disengorgement of ill gotten gains. The court affirmed that Trump lied, cheated and cooked the books to inflate his wealth, and it left intact the structural injunctions effectively barring his family from running a business in New York. But pop the champagne Donnie, you won, patrice said. All but one of the justices agreed that Attorney General Letitia James was well within her rights to bring this case without any path to a three justice majority and desperately in need of getting this opinion out the door. Higgitt and Rosado conceded to join Moulton and Renwick in the decretal alone. Now the basket case of an opinion can be appealed in the New York Court of Appeals. Alright, let's head over to Isaac for his.
Isaac Saul
All right, that is it for what the left and the right are saying. Which brings us to my take. So this latest development is not particularly surprising. Yesterday I wrote about how the case against Trump for mishandling classified documents was the most airtight lawsuit he faced. By contrast, this case was the weakest, a classic example of a nakedly partisan prosecution. Since the early days of James's lawsuit, I was skeptical about the case she was building. James centered her fraud case on a little used statute and leveraged it into seeking retribution that far exceeded the damage to the public she was representing, if she could even prove such damages at all. Remember, no private party sued Trump. The banks, the lenders, the real estate entities James said that he defrauded all made money from working with him, and entities like Deutsche bank testified on Trump's behalf during the trial. Furthermore, James campaigned for her job by explicitly promising to find a crime to prosecute Trump for. I wasn't the only one who thought she was out over her skis. Plenty of people, including former prosecutor and Democrat Stephen M. Cohen, warned about the danger of this prosecution at the time. These problems were all exacerbated by Judge Angaron, whose comments inside the courtroom sparked rightful concern that he had his own vendetta against Trump. As I said right after Angaron issued his ruling in seeking to rein in Trump's behavior, James and Angaron have gone far beyond what seems reasonable. This was not particularly hard to decipher in real time. So this new judgment should not come as any big surprise. But as usual, this decision isn't the complete vindication Trump claims it to be. The appeals court was divided on how to right Angarans wrong. Two judges believe that the half billion dollar reward was far too excessive because Trump didn't cause that much harm. Two said James had the authority to sue but wanted a new trial with a new judge. And one said the case was politically motivated and should be thrown out. And while the court ultimately decided to let the fraud ruling stand for now, every single judge raised issues with how the case was handled and Angaron's actions in particular. Part of what makes this case so divisive is how it fits into the prosecute them all standard I laid out yesterday. Normal people, people with far less power and influence than Trump, get prosecuted for similar crimes On a much smaller scale all the time in the Kaufman Chronicle, a writer who goes by the name General Osmundus made the case like this, quote, when a single mother lies about her income to qualify for food stamps, prosecutors call it welfare fraud. The penalties include jail time, criminal records, and lives destroyed. When a working class man exaggerates his wages on a mortgage application, banks call in the feds. People have been sentenced to years in prison for fraud measured in the tens of thousands of dollars. When billionaires can cheat and appeal their way out of punishment, while ordinary people are jailed for far less, the rule of law becomes a hollow slogan. I don't have much to say about this perspective, except that I think it's true. I could raise a counterpoint and argue that in all those cases, the federal government had much clearer standing to sue or bring charges. But that doesn't change the underlying unfairness of the class disparity in these cases. Cases. The decades of fraud that Trump committed, per the civil court's finding, was not unusual. Plenty of other people in the real estate business commit similar kinds of fraud regularly, which is less of an excuse for Trump and more of an indictment of a system that prosecutes poor people and middle class people for fraud, but allows it to be routine for the wealthy. The solution to me and to this panel is that Trump should have faced repercussions for his actions, but not the excessive penalties that he received in February 2024. For again, I'll refer back to my writing at the time. Quote, paying any back taxes he owes or as evaded money that belongs to the public would be appropriate. He did lie. He has a history of harmful fraud, and the idea that nobody got hurt in this case is not enough to wave it all away. Someone who drives drunk without crashing their car should not be exempted from any kind of accountability. But to steal a line from the Wall Street Journal editorial board, this remedy is like using a hellfire missile to annihilate a shoplifter. What we're left with is the peculiar sense that Trump is both guilty of something real, but simultaneously the victim of something more insidious and far reaching, end quote. Now, of course, the President has promised revenge, while the massive penalty James sought looks poised to be thrown out for good. She herself is under investigation by the Department of Justice for possible mortgage fraud, which appears to be Trump's new go to allegation for prosecuting his enemies. In other words, James campaigned for office by promising to prosecute Trump, found a crime to try to pin him for, and then push an excessive penalty that would eventually be thrown out. Trump campaigned for office by promising vengeance against the people who wronged him, and now that he is in office, has the DOJ probing James over the allegation that she claimed the Virginia home as her primary residence to secure advantageous and fraudulent loan terms. The allegation is such a similar color to the ones James prosecuted Trump for, which is less ironic and more of a signal of Trump's intent. Here and around we go. Ultimately, Americans of all political stripes would be wise to ruminate on the larger takeaways of this story. I have no idea when this hell cycle of prosecutions will end, but the genie out of the bottle effect that comes every time the Overton window moves should now be obvious to Democrats who were cheering these prosecutions on just a year or two ago. In the same vein, Republicans who are confidently backing Trump should apply the same caution they rightly accused Democrats of lacking to the gerrymandering arms RA or Trump's suppression of speech or his domestic deployments of the military. We should all nervously wonder about what is on the other side of these executive power grabs in a few short years when Trump isn't president, Nobody can see into the future, but the truth is, you don't have to. The present has plenty of valuable lessons. We'll be right back after this quick break.
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Isaac Saul
All right, that is it for my take, which brings us to your questions answered. This one's from John in Belmont, Massachusetts. John asked, is it true in what the left is saying that the tax cuts in the One Big Beautiful Bill act benefit the top 1% significantly and to the rest of the citizens, hardly at all? Yes and no, it is not true that the bill disproportionately benefits the ultra wealthy. When it comes to income, the tax benefits enshrined in the One Big Beautiful Bill act favor the higher income brackets, but within the top 20%, the benefits decrease as incomes increase. However, the wealthiest 1% accrue tax benefits in other ways. Let's start with income. According to an analysis from the Yale budget lab, about 3% of the bottom fifth of earners will come out with an additional $500 in post tax income thanks to these tax cuts, while a statistically insignificant portion will have an increase of $5,000 or more, mostly due to their already low levels of income. Comparatively, around 65% of the top fifth of earners will receive a tax break of $500 or more and 7% will get an increase of $5,000 or more within that top group. However, the trend reverses as income increases, as shown in a chart that we publish in today's newsletter. Basically, the top 5% will make less money off these tax cuts than the top 10%, the top 1% less than the top 5%, and the top 0.1% less than the top 1%. As a refresher, the OBBBA introduced only a handful of novel tax cuts. Expanding the child tax credit helps people across income brackets, increasing exemptions on tips and overtime pay benefits mostly lower income earners and temporary primarily expanding the state and local tax or SALT deduction benefits, primarily higher income earners. However, the benefits from the OBBBA come from making permanent the otherwise expiring tax cuts first introduced by Trump's Tax Cuts and Jobs act, passed during 2017. Still, the non income tax benefits enshrined by the OBBVA are much greater, particularly the tax benefits for pass through businesses and cuts to the estate tax, which predominantly favor the wealthy. According to an analysis by the Tax Policy center, the changes will reduce the tax bill for lower income households by less than 1% of their income, by just over 2% for middle income households and by 4.3% for high earners. All right, that is it for your questions answered. I'm going to send it back to John for the rest of the pod and I'll see you guys tomorrow. Have a good one. Peace.
John Law
Thanks, Isaac. Here's your under the radar story for today, folks. On Friday, the U.S. department of Interior halted construction on a major offshore wind project off Rhode Island's coast. The department's Bureau of Ocean Energy Management cited concerns related to the protection of national security interests as justification for the pause, instructing the company behind the project Orsted not to resume work until the bureau had completed its necessary review. The project, which was originally approved under the Biden administration, is 80% complete. However, the second Trump administration has taken a critical stance on offshore wind, attempting to block many planned wind projects. Axios has this story and there's a link in today's episode description all right, next up is our numbers section. It's been 1065 days between New York Attorney General Letitia James filing her civil lawsuit against President Donald Trump, the Trump Organization and its leaders, and the appeals court decision throwing out the financial penalty against Trump in the case. The appeals court's decision was 323 pages in length. There were 44 days of testimony in President Donald Trump's civil fraud trial. The number of witnesses for the New York Attorney General's office during the trial was 25, and the number of witnesses for the defense was 19. Trump was ordered to pay approximately $355 million in penalties in his civil fraud case. The approximate total fine with interest at the time the judgment was handed down was $454 million. $112,000 was the approximate additional penalty for each day that Trump had not paid the fine in full. But after Thursday's appeals court ruling, Trump owes $0. And last but not least, our have a nice day story. Michelle Last's father was a veteran of the Vietnam War, and after he took his own life in 2006, Michel founded a non at Wolf dog sanctuary to aid other veterans struggling with mental health issues. Based in Wisconsin, Apex Angels and Warriors provides non traditional therapy for veterans through connection with wolf dogs, a hybrid species between domestic dogs and gray wolves. For Jeff Youngk, who served two tours in Afghanistan, the organization has provided support and helped him in his relationships with his friends and family. CBS News has this story and there's a link in today's episode description all right, everybody, that is it for today's episode. As always, if you'd like to support our work, please go to retangle.com where you can sign up for a newsletter membership, podcast membership, or a bundled membership that gets you a discount on both. We'll be right back here tomorrow. For Isaac and the rest of the crew, this is John Law signing off. Have a great day, y'. All. Peace.
Isaac Saul
Our Executive Editor and founder is me, Isaac Saul and our Executive Producer is John Lowell. Today's this episode was edited and engineered by Dewey Thomas. Our editorial staff is led by Managing Editor Ari Weitzman with Senior Editor Will K. Back and Associate Editors Hunter Casperson, Audrey Moorhead Bailey, Saul, Lindsey Knuth and Kendall White. Music for the podcast was produced by Diet75. To learn more about Tangle and to sign up for a membership, please visit our website@readtangle.com.
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Episode: Trump's $500 million fraud penalty gets thrown out
Host: Isaac Saul
Date: August 26, 2025
In this episode of Tangle, host Isaac Saul unpacks the breaking news that a New York appeals court has thrown out the $527 million civil fraud penalty against President Donald Trump. The discussion covers the background of the case, the court’s logic, reactions from across the political spectrum, and broader implications for American politics and the justice system. Isaac provides context, summarizes arguments from both right and left, and closes with his own nuanced perspective on the outcome, fairness, and what it says about the political use—and abuse—of legal action.
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