Among the several penalties the attorney general has asked a state judge to grant is barring President Trump from doing business in New York permanently, including doing business with New York-based financial institutions.
In a strongly-worded letter to New York Supreme Court Justice Arthur Engoron, defense attorney Clifford Robert accused Ms. James of being politically motivated against President Trump and argued this was an inappropriate comparison.
Mr. Robert asked the judge to reject the attorney general’s citation of the Shkreli case as “misplaced,” “irresponsible,” and “baseless,” while claiming the comparison itself was motivated out of “desperation and obvious frustration” with President Trump’s “ongoing ascent toward the White House.”
Case Comparison
Mr. Shkreli had been CEO of Turing Pharmaceuticals and was found liable for price gouging in 2022, inflating the price of a drug used to treat AIDS patients from $17.60 to $750.
Penalties included $64.6 million disgorgement, or payment of the profits he made from inflating the drug prices, and a lifetime ban from the pharmaceutical industry.
Mr. Shkreli appealed, but lost.
State attorneys argued in a recent court filing that this case law supported their request for a lifetime ban on President Trump doing business in New York.
Mr. Robert disagreed, bolding and italicizing several times in the letter that “not one witness, not one complaint, and not one victim” was produced to support the petition’s claims of fraud.
This included manufacturers of generic versions of the drug who testified as to how they were pushed out of the market, and attorneys general from several states who investigated Mr. Shkreli on the behalf of patients.
“Those witnesses proved Shkreli’s conduct caused actual harm to the marketplace and to desperately ill consumers victimized by the scheme,” Mr. Robert argued.
“Shkreli’s conduct forced chronically ill patients to purchase a life-saving drug at abusively and monopolistically [sic] inflated prices.
“The lifetime ban from the pharmaceutical industry was entered to prevent Shkreli from ever again menacing a fragile populace and extorting money from those in need of life-saving medical treatment.”
President Trump’s case is no equivalent, Mr. Robert argued.
“President Trump’s net worth exceeded that reported in his financials and he was a highly sought-after ‘whale’ of a client who was overqualified for the Private Wealth loan terms and who formed a highly profitable relationship with the banks,” Mr. Robert wrote, citing several pages of transcripts from the trial.
He argued that the only assertion of fraud came from the attorney general’s office, rather than the banks or insurers named.
During the trial, officials with Deutsche Bank and Zurich Insurance testified they had not solely relied on the Trump Organization statements of financial condition, but did their own financial analyses.
“The absurdity of the attorney general’s latest effort would be almost comical but for the sobering future consequences of her shameless abuse of power,” the letter reads.
“Such shocking and tyrannical interference in the free markets for political gain places every New York business transaction at risk.”
In a footnote, Mr. Robert took issue with a separate “frivolous” comparison made with Bernard Madoff during closing arguments, noting that Mr. Madoff pleaded guilty to 11 charges and it was found that his fraud affected thousands of victims.
Case Background
The case arose from a claim made by Michael Cohen, a personal lawyer of President Trump’s turned critic, in 2019. He alleged that President Trump would inflate and deflate his net worth on paper in order to obtain better loan terms.Following a multi-year investigation, Ms. James sued President Trump, the Trump Organization, and several of its executives in 2022 on seven claims related to fraud in the statements of financial condition from 2011 to 2021.
An appeals court later set a statute of limitations on the case to transactions after 2016.
The statements are not mandatory financial documents, but rather a marketing piece the organization used during deals. These statements would summarize the value of Trump Organization assets, adding up to a total net worth for President Trump.
In September 2023, Justice Engoron issued a summary judgment finding President Trump liable for fraud and inflating his net worth by up to $2.2 billion in these statements.
The upcoming trial would deal with penalties, as well as require state attorneys to show materiality and intent to defraud.
The trial began on Oct. 2, 2023, and lasted 44 days. The attorney general is also seeking other penalties, including $370 million in damages and to bar Eric Trump and Donald Trump Jr. from doing business in New York for five years.
After a winter break, closing arguments were made earlier this month, and Judge Engoron has said the earliest he would issue a decision is the end of this month.
