Bank Executive Flips the Script During His Testimony at Trump's NY Fraud Trial
A Deutsche Bank AG executive confirmed on Tuesday what former President Donald Trump has been saying all along regarding the fraud lawsuit brought by New York Attorney General Letitia James: There were no victims.
James’ civil case is predicated on the notion that the Trump Organization overvalued its properties and therefore defrauded banks like Deutsche when obtaining business loans.
The AG’s lawsuit alleges that the company inflated the value of its properties by as much as $3.6 billion to obtain better loan terms, Bloomberg reported.
The state of New York is seeking $250 million in penalties and a ruling that prevents the Trump Organization from doing business in the state.
“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.
Under further questioning by Suarez, Williams testified that Deutsche always reviews a prospective client’s financial statements and adjusts the company’s worth based on the bank’s own assessment.
“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.”
Before testifying earlier this month, Trump told reporters that his company’s financial statements were “very conservative,” adding, “So therefore there’s no fraud.”
Further, the 45th president explained that his property valuations have a “big disclaimer clause” instructing would-be lenders to do their own due diligence to determine what they believe the assets are worth.
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.”
So he asserted that the banks were not tricked into loaning money to the Trump Organization.
To put a nail in the coffin of the case, McCarthy noted that even if Trump’s properties were overvalued, “there is no evidence that the banks would have charged a higher interest rate.”
He explained that the banks set the terms of their loans based on multiple factors, such as Trump’s history of paying up, the knowledge that he could shop around for other banks if their interest rates were too high, and the fact that they’re in the business of making loans to earn money.
After Williams finished on the witness stand, Trump attorney Christopher Kise asked Manhattan Supreme Court Justice Arthur Engoron to issue an immediate directed verdict in his client’s favor, arguing the Deutsche Bank executive’s testimony refuted James’ claim that the allegedly inflated property values were material in the bank’s decision to loan 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.
In September, Engoron ruled by summary judgment — meaning before there was any trial — that Trump and the Trump Organization committed fraud against lenders and insurers by inflating property values. The judge is now holding a non-jury trial to decide what penalties he should impose.
Is there any doubt that, but for Trump’s 2024 presidential candidacy, this case would not even have been brought? James is looking to raise her profile and damage the front-runner for the Republican nomination.
The suit should be dismissed immediately with prejudice, meaning it can never be brought again.
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