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Editor’s Note: Alexander Talel is an attorney and author. He served as law clerk to Judge Jon O. Newman of the US Court of Appeals for the Second Circuit and to Judge Sidney H. Stein of the US District Court for the Southern District of New York. The views expressed in this commentary are his own. Read more opinion at CNN.

CNN —

In mid-1950s New York, business corruption was rife, and mafia families were on the rise. Jacob Javits, who was the New York state attorney general at the time, pushed the state legislature to create a law that would give his office sweeping power to identify and go after repeated fraudsters. From that request, Executive Law 63 (12) was born.

Today, the Executive Law is the centerpiece of current New York Attorney General Letitia James’ case against former President Donald Trump. To ignore the injustice of the law as applied to Trump is to welcome its unfair application to us all.

James is attempting to use the Executive Law against Trump in a way it’s never been used before, making the case that he defrauded certain financial institutions despite those institutions having actually profited from doing deals with him. That makes little sense, illustrating the law’s potential for rough justice, especially in the hands of a highly motivated attorney general.

Trump was supposed to testify once again on Monday after appearing on the witness stand last month, but he said online late Sunday that he would not be testifying again after all. On Tuesday, Trump’s defense rested its case.

James’ case argues that the financial statements that Trump submitted to various lending institutions were fraudulent because they exaggerated the value of his real estate holdings. That sounds bad. But what the AG doesn’t allege is that any of those lenders complained about Trump’s valuations or that his valuations violated those lenders’ rules or even that Trump defaulted on any of the loans he received — he hasn’t.

Can someone be sued by the government for fraud if the supposedly fraudulent conduct hasn’t harmed anyone? Under the Executive Law, yes; Trump’s case proves it. The commercial consequences of the law are disturbingly obvious and potentially devastating.

If an individual puts two properties up for sale at double the value assessed by a third-party appraiser, could the AG go after that seller for repeated “fraud” under the Executive Law, despite buyers happily paying the asking prices? Apparently. What about a deli owner claiming in ads to have the “best sandwiches in the world”? Could the AG go after that owner for “fraud” even though customers have only praised and never complained about the quality of those sandwiches? In theory, yes. And does anything in the law allow the court to rein in the AG for overreaching? Far from it — New York courts have ruled that the AG’s power to act under the Executive Law is basically immune from questioning.

Following the guidance of those courts, presiding New York State Supreme Court Justice Arthur Engoron ruled in favor of James in September, finding that Trump had violated the Executive Law. In allowing trial to proceed on the issue of damages, Engoron also ruled that disgorgement — the remedy sought by the attorney general, which compels an individual to return illegally made profits — is “equitable in nature, mandating that the trial be a bench trial, one that a judge alone decides.” That ruling makes clear how the Executive Law allows a court to deny an accused individual their constitutional right to a jury trial.

Equitable disgorgement usually involves ill-gotten profits — in an insurance scam, for example, in which an individual tricks another into paying premiums for a non-existent policy, disgorgement would require the scammer to pay back whatever profits they illegally collected from the victim. That kind of straightforward calculation might be appropriate for a judge to decide alone. But there are no victims in Trump’s case and, therefore, no ill-gotten profits.

So when James asks that an “estimated” $250 million be disgorged from Trump, what she’s really seeking is a massive penalty — not a specified, equitable remedy pegged to a victim’s suffering, but the kind of unspecified and punitive money damages typically left for juries to decide.

Instead of a jury, however, Trump gets Engoron, who isn’t sympathetic to the free-market economic principles underlying his defense. In his September ruling, Engoron ridiculed Trump for “essentially argu[ing] that value is inherently subjective.” But value is often subjective, particularly in the real estate market. Engoron’s decision obscures this point by mainly citing cases dealing with tax assessment challenges — not decisions implicating contracting business entities like the ones at issue in Trump’s case.

Engoron similarly mocked Trump for arguing that “no sophisticated counterparty would have considered the [financial statements] and other information provided by [Trump] as material to extend credit … without doing their own due diligence.” But Trump’s argument makes business sense — a bank’s ultimate decision to lend is based on its own self-informed valuation, not the borrower’s. These points have played out through evidence presented at trial.

During a full day of testimony just after Thanksgiving, an executive of one of Trump’s lenders confirmed that there was nothing “unusual” about Trump’s inflated valuations — that the bank had done its own due diligence and determined that Trump’s assets were less valuable than he claimed but decided to loan Trump money anyway. Individuals and corporations are entitled to value things as they please and to enter into contracts accordingly. But under the Executive Law, the AG and the court are free to interfere with and even punish that conduct.

If all that isn’t bad enough, the punishment the attorney general can seek for supposed fraud under the Executive Law isn’t limited to life-altering disgorgement — the AG can also strip the accused party of its license to do business in New York, as James has done to Trump (the move is on hold while the decision is appealed).

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Trump’s case illustrates why none of us should want the government to have the power that it does under the Executive Law. That’s not to say that Trump didn’t puff up the value of his real estate holdings — he surely did.

But that’s not a reason to ignore that the Executive Law allows the government an unrestricted and unconstitutional power to devastate individuals’ livelihoods for puffery in their private business dealings with ultimately satisfied customers. If that behavior is punishable as “fraud,” Trump will suffer for it. But many good and hard-working people might suffer for i﻿t as well.

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