Is "can exceed up to X" some form of colloquialism?

The phrase "Fines can exceed up to $500" is completely ambiguous because "exceed" and "up to" contradict each other. The writer probably meant one of the following:

1. Fines can exceed $500

2. Fines cannot exceed $500

3. Fines can be up to $500

4. Fines can exceed no more than $500

Most likely, the writer replaced "be" with "exceed" because they didn't like the way "be" sounded. If this was their intent, then they should have used (2) or (4).

The phrase "Fines can exceed up to $500" doesn't make sense to you because (a) it isn't numerically logical, and (b) the intention of the author of the phrase is ambiguous.

To make the statement logical, we'd have to add a clarification to it, along these lines:

"Fines can exceed any number up to $500."

That is, in plain English, fines may be as high as $500 but may not exceed that figure. Of course, it isn't difficult to express that idea less awkwardly. For example:

Fines of up to $500 may be imposed.

Or:

Violators are subject to fines of up to $500.

These clarifications fix the meaning of the phrase by identifying $500 as the maximum possible fine—but do they reflect the author's intended meaning? That is not at all clear—because the author may have intended to convey the idea that fines are open-ended, and not capped at $500. But if so, the underlying idea would have been clearer if the author had worded the notice as follows:

Fines may reach or exceed $500 in appropriate cases.

In short, statements of the type "Fines can exceed up to $500" are impossible to interpret with complete confidence because the literal meaning is fatally garbled and the actual intended meaning requires additional (or altered) wording to become intelligible.