On Tuesday, a representative of Deutsche Bank AG confirmed what former President Donald Trump has been saying for a while regarding the fraud case that New York Attorney General Letitia James filed: No victims were present.
The basis of James’ legal lawsuit is the claim that the Trump Organization misrepresented the worth of its properties to deceive banks such as Deutsche Bank into providing business loans.
According to Bloomberg, the AG’s complaint claims that the business overstated the worth of its assets by up to $3.6 billion to get better credit conditions.
In addition to a decision that forbids the Trump Organization from doing business in the state, the state of New York is requesting $250 million in fines.
“Is the bank capable of reaching its own judgment based on the evaluation it makes of the guarantor’s financial condition?” Trump attorney Jesus Suarez asked David Williams, a managing director at the German bank who worked on at least three loans for the Trump Organization.
“Certainly, yes,” he responded.
Williams said, under additional questioning from Suarez, that Deutsche always looks over the financial accounts of a potential customer and modifies the company’s value according to the bank’s evaluation.
“As part of our due diligence, we subject a client’s asset value to adjustments,” Williams said. “It’s part of our underwriting process. We apply it to every client regardless of what’s reported.”
“Is a difference of opinion in asset values between the client and the bank a disqualifying factor to extend credit?” Suarez asked Williams.
“No,” he replied.
“Why not?”
“It’s just a difference of opinion. … I think we expect clients to provide information to be accurate.” But Williams added that such financial statements are made “largely relying on the use of estimates.”
Trump told reporters his company’s financial filings were “very conservative,” adding, “so therefore there’s no fraud,” before appearing earlier this month.
The 45th president went on to say that his property assessments include a “big disclaimer clause” that directs prospective lenders to do their own due diligence and assess the assets’ estimated values.
After testifying, Trump said, “There’s no case here. There are no victims. The banks aren’t a victim. The insurance companies aren’t a victim. Everybody got paid.”
🚨Donald Trump speaks before headed into court for his New York civil trial pic.twitter.com/w9G6UUCVvv
— Benny Johnson (@bennyjohnson) October 17, 2023
Former federal prosecutor Andrew McCarthy agreed with Trump, writing, “First, if there were proof that Trump had ripped banks off in this manner and to this extent, this would have been a huge criminal case that no prosecutor’s office would pass up — certainly not the famously aggressive feds in the Southern District of New York (where I worked for two decades).”
He continued, “and certainly not the Manhattan District Attorney’s Office, which twice litigated all the way to the Supreme Court to get Trump’s financial records, and which was not too embarrassed to bring a ludicrous indictment over the comparative chump change ($130,000) in hush-money Trump paid to a porn star.”
McCarthy went on to argue, as Trump has, that “banks in high-end lending are sophisticated financial actors who do not take the debtor’s word for it when it comes to valuing assets—they have entire departments of experienced appraisers assessing values.”
Thus, he said that the banks were not duped into giving the Trump Organization a loan.
McCarthy said, “There is no evidence that the banks would have charged a higher interest rate,” putting a final nail in the argument, even if Trump’s properties were overpriced.
He clarified that the banks decide the terms of the loans after taking into account a number of factors, such as Trump’s track record of making loan payments, his knowledge of the option to choose another bank if the interest rate was too high, and the reality that the banks are in the lending business to make money.
Following Williams’ testimony, Trump’s attorney, Christopher Kise, asked Manhattan Supreme Court Justice Arthur Engoron to issue an immediate directed verdict in his client’s favor. Kise argued that the executive from Deutsche Bank’s testimony disproved James’ claim that the allegedly inflated property values had a significant impact on the bank’s decision to lend money to the Trump Organization.
“The bank had no problem with a $2 billion difference, a $3 billion difference — large changes to net worth are not unusual,” Kise said, according to Bloomberg. “There’s been no demonstration of any materiality issues at all.”
Engoron responded that he would rule on Kise’s request later but suggested his decision was not likely to be favorable to Trump.
“The mere fact that lenders were happy doesn’t mean the statute wasn’t violated,” the judge said.
By inflating property prices, Engoron determined in September that Trump and the Trump Organization had defrauded lenders and insurers via summary judgment, which was rendered prior to a trial. The judge is currently holding a non-jury trial to decide what punishments are appropriate.
Is there any question that this lawsuit would never have been filed had it not been for Trump’s 2024 presidential campaign? James wants to make a bigger name for herself and hurt the front-runner in the race for the Republican nomination.
The lawsuit needs to be promptly dismissed with prejudice, which prevents it from ever being filed again.
