A Deutsche Bank AG executive told a court in New York on Tuesday that it is not unusual for loan clients to overstate their net worth, and that the bank does its own due diligence in determining eligibility for loans.
Another executive testified that the bank had benefited from its business relationship with Trump and had wanted to continue that relationship — all of which runs against Attorney General Letitia James’s civil fraud case against Trump: there was no one harmed by alleged overestimates of his worth.
Trump faces the first case ever brought in New York in which a borrower is being sued for fraud when no one is claiming actual harm. The state is seeking a $250 million fine against Trump, and wants him to be forced to give up control of his businesses.
Judge Arthur Engoron, an elected Democrat, issued a summary judgment that Trump was liable before Trump was ever able to mount a defense. The current phase of the trial is simply about the penalty. But it is undermining the state’s basic allegations.
Bloomberg News reported:
David Williams, who worked on at least one of three loans Deutsche Bank made to Trump in the years before he was elected president, testified Tuesday that it’s “atypical, but not entirely unusual” for the bank to cut a client’s stated asset value by 50% and approve a loan anyway, as it did with Trump.
Deutsche Bank, which loaned Trump hundreds of millions of dollars for properties in Miami, Chicago and Washington, cut his stated net worth in 2011 and 2012 from about $4.2 billion to $2.3 billion when evaluating his loan requests, according to internal bank credit memos used as evidence in the case. The same documents show the bank approved the loans anyway because it expected them to generate a profit based on Trump’s history of successful developments and other criteria.
“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.”
Legal scholar Jonathan Turley of George Washington University observed:
The evidence shows that banks made money on these loans, which were paid off either early or on time. In fact, none of the banks complained about the Trump organization’s estimations, which were accompanied by a warning that the banks should not rely on those estimates.
Moreover, James is seeking to kill a corporation once viewed as iconic in New York, not just by denying the certificates for the Trumps to do business in the city but by imposing $250 million in penalties for money that no one actually lost.
Justice Engoron seemed irritated by the testimony, however, and when Trump counsel asked why the bank was so eager to secure future loans, Engoron snapped back: “They’re trying to make money. Why wouldn’t they be interested?”
Trump has said that the civil case against him, like federal criminal cases in Florida and Washington, DC, and state criminal cases in New York and Georgia, are simply motivated by politics.
James was elected on a specific promise to use the courts to pursue Trump.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of the new biography, Rhoda: ‘Comrade Kadalie, You Are Out of Order’. He is also the author of the recent e-book, Neither Free nor Fair: The 2020 U.S. Presidential Election. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.