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He vastly overstated his wealth to obtain favorable loan deals, prosecutors allege.
A former Deutsche Bank executive testified this week that the German financial behemoth only agreed to make massive loans to Donald Trump because of Trump’s vast personal fortune. The problem? The bank apparently thought, based at least partly on financial statements provided by Trump, that he was far wealthier than he really was.
The Deutsche Bank exec, Nicholas Haigh, was testifying in Manhattan as part of New York Attorney General Letitia James’ $250 million civil fraud lawsuit against Trump. Going over internal documents in court with Haigh, James’ attorneys showed that the bankers didn’t really believe all of Trump’s claims about his wealth. They estimated that Trump was significantly less wealthy than he claimed, but they were still convinced that he had more money than he really did.
James contends that Trump didn’t have anywhere near enough wealth to qualify for the loans he received, and she alleges that the financial statements he gave to Deutsche and other institutions were fraudulent because he vastly over-valued his real estate properties. New York judge Arthur Engoron, who is overseeing the case, has already ruled that he agrees—the ongoing trial involves a handful of lesser allegations over the paperwork and will also determine how much of a fine Trump should have to pay.
Trump and his legal team have largely declined to try to argue the facts of the case. The former president’s comments on the ongoing proceedings have mostly been limited to angry outbursts accusing James of pursuing a political or racist agenda. (James is Black.) Wednesday’s testimony highlighted just how hard it is for Trump to deny the allegations. As James’ attorneys repeatedly showed in court, not only did Trump sign his name to documents listing incorrect values for his properties, the banks largely believed what he told them and made their decisions based on his claims.
According to the documents and Haigh’s testimony, at least one of the transactions required that Trump maintain a net worth of at least $2.5 billion to avoid defaulting on the loan. At the time, Trump claimed his net worth was well over $4 billion. But James’ office contends that it was actually only about $1.6 billion.
Haigh testified that when Trump approached the bank for loans, he offered several properties as collateral, including his Doral golf course and his Chicago hotel and condo building. Those properties alone, Haigh said, would not ordinarily have been enough. Haigh, who was head of risk assessment for the Deutsche’s private wealth management division—a division that handles banking for very wealthy clients—said that it was unusual for a customer to try to offer those types of properties as collateral.
“In general terms, my conclusion was the client owned a lot of real estate, a lot of golf courses, which I didn’t know how to value,” Haigh said.