Banker Takes the Stand for Trump’s Company in Civil Fraud Trial

In the midst of Donald Trump’s civil fraud trial, a revealing testimony emerged on Tuesday regarding Deutsche Bank’s substantial loans to his company, amounting to hundreds of millions of dollars. An executive at the bank shed light on their adherence to rigorous guidelines, which included thorough scrutiny of the information furnished by prospective borrowers.

Grossly Inflated Assets

The loans in question were allocated for ambitious projects spanning Florida, Chicago, and Washington, D.C., and have come under the scrutiny of New York Attorney General Letitia James. She has alleged that Trump and his company engaged in deception by presenting lenders and insurers with financial statements that grossly inflated his asset values and overall net worth. It is essential to note that the accused parties vehemently deny these allegations.

Deutsche Bank, before extending these loans, meticulously examined the financial statements. They channeled this process through a department catering to affluent individuals, which, intriguingly, allowed for more favorable interest rates compared to the commercial real estate division. These loan agreements came laden with stipulations concerning Trump’s net worth and liquidity, often necessitating annual submissions of his financial records.

However, a twist in the narrative emerged during defense testimony by managing director David Williams. He divulged that the bank’s approach to clients’ reported net worth was somewhat subjective, often contingent on estimates. While expecting accuracy in provided information, Williams explained that the industry standard did not mandate audited statements. As a result, bankers frequently exercised discretion in making necessary adjustments.

In essence, this testimony presents a complex tapestry of the financial dealings between Deutsche Bank and Trump’s company, shedding light on the intricate processes involved in evaluating borrowers’ financial claims.

Wealth Disparities

In the intricate web of financial dealings between Deutsche Bank and Donald Trump, disparities in assessing Trump’s wealth frequently emerged, sometimes pegging his net worth billions of dollars lower than what he claimed. One striking example from 2019 saw Trump’s financial statement asserting a net worth of $5.8 billion, which the bank prudently adjusted downward to $2.5 billion.

However, David Williams, a managing director at Deutsche Bank, testified that such variances weren’t inherently uncommon or cause for alarm. He depicted these adjustments as conservative measures, standard practices, and a stress test of financial robustness.

Conversely, the attorney general’s office contended that these adjustments were not designed to account for alleged fraud. A retired Deutsche Bank executive, Nicholas Haigh, testified earlier in the trial, acknowledging that he regarded the figures as broadly accurate, although the bank routinely applied “sanity checks” and, at times, substantial “haircuts.”

Donald Trump served as the guarantor for the loans, displaying swift responsiveness when the bank expressed concerns about insufficient property-generated cash flow to meet payments. Williams disclosed that Trump injected $8.6 million into the Washington hotel’s accounts when cash flow fell short of requirements. Notably, no payments were missed, and the loans never slipped into default status, as clarified by Williams.

Following Williams’ testimony, Trump’s legal team once again sought to have the case dismissed. They argued that the bank executive’s statements effectively nullified allegations of deception regarding Trump’s wealth. Defense lawyer Christopher Kise asserted that the bank conducted its due diligence and didn’t find issue with the substantial differences in wealth assessments, suggesting that it had no bearing on the bank’s actions based on Trump’s submissions.

In response, state lawyer Kevin Wallace countered, emphasizing the established principle that lying to a bank holds consequences, firmly asserting that deceiving a bank was not to be taken lightly.

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This article was produced and syndicated by A Dime Saved.