Trump almost out of ways to challenge New York law that could ruin his company
President Donald Trump walks from the west wing of the White House to Marine One in 2017. (Shutterstock.com)

Donald Trump has gone into legal retreat after failing to challenge the New York attorney general's fraud lawsuit, and legal experts say he's suddenly in real jeopardy.

New York's Executive Law 63 (12) grants state attorneys general the authority to launch investigations and initiate prosecutions, and his recent losses will force Trump to finally explain why he lied for years about his real estate portfolio at the risk of losing it all, reported The Daily Beast.

"The language is broad. It talks about persistent fraud and illegality," said Bob Abrams, who served as New York attorney general from 1979 until 1993. "She has the authority to protect the public from scammers."

James is seeking $250 million and revoke the Trump Organization's business credentials using a state law enacted in 1956 to prevent fraud, and previous attorneys general have used it to strengthen cases scammers who targeted easy marks on their "sucker lists," and other states have passed similar laws.

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“We were pretty aggressive in how we used the power of the attorney general’s office to try and advance environmental rights, which became a very important objective in the AG’s office — as well as civil rights," said G. Oliver Koppell, who served as New York’s AG in 1994, "and we also did a lot of consumer protection. There were so many abuses of consumer rights and scams. We prosecuted dozens of scams."

However, James is using the law in a new way by arguing that Trump manipulated property values to get tax breaks or dupe banks and insurance companies, which her office says violated consumer protections.

“It’s something of a stretch," Koppell said. "I think the law was primarily intended to go after consumer fraud. When I was there, we certainly focused primarily on consumer fraud…. people who got [swindled] in the mail or were induced to buy things they didn’t need. We really didn’t look at it as a business fraud law."

But, Koppell said, he's not opposed to James trying out that interpretation of the law to ensure a fair marketplace, and Judge Arthur F. Engoron so far has allowed the attorney general to implement the law in that way due to the extent of Trump's lies about his properties.

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“Executive Law § 63 (12) broadly empowers the Attorney General of the State of New York to seek to remedy the deleterious effects, in both the public’s perception and in reality, on truth and fairness in commercial marketplaces and the business community," Engoron wrote in on ruling.

The only argument against James' authority to use the law in this manner is to show that lies like Trump's are so commonplace that it's actually accepted in the industry, but Daniel L. Feldman, a professor at the City University of New York’s John Jay College of Criminal Justice, doesn't think that will work.

“Now, I don’t buy that for a few reasons," Feldman said. "The fact that everybody does it doesn’t make it legal. Trump did it to an extent I’ve never heard of anyone doing it. The egregious exaggerations went way beyond other people."