When Deutsche Bank loaned Donald Trump’s company hundreds of millions of dollars, the bank always followed its own guidelines that include checking out information that would-be borrowers provide, an executive testified Tuesday at the former president’s civil fraud trial.
Quick Read
- Deutsche Bank’s Loan Practices: An executive from Deutsche Bank testified that the bank followed its guidelines when loaning hundreds of millions of dollars to Donald Trump’s company, including verifying borrower-provided information.
- Focus of New York Lawsuit: The lawsuit, filed by New York Attorney General Letitia James, alleges that Trump and his company deceived lenders and insurers by overstating asset values and net worth in financial statements. The defendants deny these allegations.
- Loan Review Process: Deutsche Bank reviewed Trump’s financial statements before approving the loans through its department that works with wealthy individuals, potentially securing more favorable interest rates than from its commercial real estate division.
- Net Worth Estimates: The bank’s managing director, David Williams, stated that clients’ reports of net worth are seen as “subjective” and subject to estimates, and the bank often makes its own adjustments.
- Bank’s Conservative Measures: Williams testified that the bank’s adjustments to Trump’s reported net worth were conservative measures, often significantly lower than Trump’s figures, but not necessarily alarming.
- Alleged Fraud Not Anticipated: A now-retired Deutsche Bank executive indicated earlier in the trial that the bank assumed the figures provided by Trump were broadly accurate, despite conducting “sanity checks.”
- Judge’s Prior Fraud Ruling: Judge Arthur Engoron has already ruled that Trump and other defendants engaged in fraud. The ongoing trial will decide claims of conspiracy, insurance fraud, and falsifying business records.
- Trump’s Defense: Trump argues that his financial statements underrepresented his wealth and that any overstatements were mistakes. He also contends that lenders focused more on property locations and deal terms, rather than on the financial statements.
- Bank’s Independent Verification: Deutsche Bank’s guidelines instructed officers to independently verify all material facts, and Williams confirmed that these guidelines were followed in dealings with Trump.
- Potential Penalties and Restrictions: Attorney General James seeks to impose over $300 million in penalties and to ban Trump from business activities in New York. A pretrial order to place some of Trump’s properties under a receiver’s control is currently frozen by an appeals court.
The Associated Press has the story:
Banker involved in big loans to Trump’s Co. testifies for his defense in fraud trial
Newslooks- NEW YORK (AP)
When Deutsche Bank loaned Donald Trump’s company hundreds of millions of dollars, the bank always followed its own guidelines that include checking out information that would-be borrowers provide, an executive testified Tuesday at the former president’s civil fraud trial.
The loans — for projects in Florida, Chicago and Washington, D.C. — are a focus of New York Attorney General Letitia James’ lawsuit contending that Trump and his company deceived lenders and insurers by giving them financial statements that baldly overstated his asset values and overall net worth. The defendants deny the allegations.
Deutsche Bank reviewed the financial statements before making the loans through its department that works with rich individuals — a pathway that allowed for more favorable interest rates than likely available from the commercial real estate division, according to the lawsuit. The deals came with conditions about Trump’s net worth and, sometimes, liquidity, and they often required annual submissions of his financial statements.
But, testifying for the defense, managing director David Williams said the bankers viewed clients’ reports of their net worth as “subjective or subject to estimates” and took its own view of such financial statements.
“I think we expect clients-provided information to be accurate. At the same time, it’s not an industry standard that these statements be audited. They’re largely reliant on the use of estimates,” Williams said, so bankers routinely “make some adjustments.”
At times, the bank pegged Trump’s net worth at $1 billion or more lower than he did, according to documents and testimony. But that wasn’t necessarily unusual or alarming, Williams testified.
“It’s a conservative measure to make these adjustments. You might even say it’s a stress test” of financial strength, he said.
The attorney general’s office, however, has maintained that such adjustments were never intended to account for the alleged fraud. A now-retired Deutsche Bank executive, Nicholas Haigh, testified earlier in the trial that he assumed the figures “were broadly accurate,” though the bank subjected them to ”sanity checks” and sometimes made sizeable “haircuts.”
Judge Arthur Engoron already has ruled that Trump and other defendants engaged in fraud. The trial is to decide remaining claims of conspiracy, insurance fraud and falsifying business records. There’s no jury, so Engoron will decide the verdict.
Trump, the current Republican 2024 presidential front-runner, casts the entire case as a political low blow from James, a Democrat.
Trump maintains that his financial statements actually lowballed his wealth and that any overstatements — such as listing his Trump Tower penthouse for years at nearly three times its actual size — were mistakes.
He asserted in his own testimony this month that his lenders cared more about property locations and the parameters of the deals than they did about the financial statements. And he argued that lenders were essentially told to do their own homework, pointing to disclaimers that said the statements weren’t audited, among other caveats.
Deutsche Bank guidelines told lending officers to “independently verify all material facts,” and Williams said the bankers followed those and other instructions when dealing with Trump.
“Are you aware of any time Deutsche Bank didn’t adhere to its own guidelines in making loans to President Trump?” defense attorney Jesus M. Suarez asked.
“No,” Williams replied.
James’ lawyers haven’t yet had their chance to question him.
James wants the judge to impose over $300 million in penalties and to ban Trump from doing business in New York — and that’s on top of Engoron’s pretrial order that a receiver take control of some of Trump’s properties. An appeals court has frozen that order for now.
