A Deutsche Bank executive testified on Nov. 28 that it isn’t unusual for a bank to cut a client’s stated asset value—even by half—and still approve a loan, just like it did with Donald Trump, potentially strengthening the former president’s defense in the civil fraud trial in a lawsuit brought by New York Attorney General Letitia James.
Deutsche Bank is the lender that provided hundreds of millions of dollars in loans to President Trump for properties in Miami, Chicago, and Washington.
Managing director David Williams, who testified on behalf of the defense, also said it’s standard practice for Deutsche Bank to subject a client’s asset value to an adjustment, saying differences between a client and the bank about a client’s asset values aren’t a disqualifying factor when considering granting loans because “it’s just a difference of opinion.”
Ms. James has argued that the former president inflated the value of his assets by as much as $2.2 billion to get better loan terms from the bank and is seeking to recover about $250 million.
President Trump’s lawyers counter that the case should be thrown out, claiming that the bank executive’s testimony neutralized allegations that President Trump and The Trump Organization deceived the lender about his wealth.
The Allegations
Ms. James, a Democrat who brought the lawsuit against President Trump last year, has argued that he and his company, The Trump Organization, defrauded banks, insurers, and others by allegedly overvaluing his assets and exaggerated his net worth on paperwork that was used in deals and to secure loans.
President Trump, the frontrunner for the Republican 2024 presidential nomination, has denied any wrongdoing and has claimed that the case is a politically motivated plot to undermine his White House run. He has portrayed both Ms. James and Justice Engoron as unfairly biased against him.
While Ms. James has cast Deutsche Bank as President Trump’s biggest victim, his legal team is calling to the stand four current and former Deutsche Bank employees as part of his defense case, seeking to flip the script on Ms. James’ portrayal of the case.
Bolstering Trump’s Defense
On Nov. 28, Mr. Williams said Deutsche Bank 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,” Mr. Williams said, noting that bankers routinely “make some adjustments.”
At times, the bank pegged President Trump’s wealth at several billion dollars lower than he did, according to documents and testimony. In 2019, for example, President Trump’s financial statement listed his net worth at $5.8 billion, which the bank adjusted down to $2.5 billion.
However, Mr. Williams said such differences weren’t necessarily unusual or alarming.
“It’s a conservative measure to make these adjustments,“ he testified, characterizing them as “standard” and as a ”stress test” of financial strength.
However, Ms. James’ office has argued that such adjustments were never intended to account for the fraud that President Trump and his organization are accused of.
Earlier, when President Trump and his sons, Donald Trump Jr. and Eric Trump, took the stand to testify, they all argued that no bank was victimized by the stated asset valuations and that lenders—including Deutsche Bank—made considerable amounts of money in interest by extending the loans.
Trump’s Testimony
In the Sept. 26 summary judgment, Justice Engoron found that President Trump inflated his net worth by up to $2.2 billion annually in Trump Organization statements of financial condition (SFC) from 2011 to 2021.On Nov. 6, he maintained that he did nothing wrong and that the SFCs at the center of the case were, in fact, undervalued.
President Trump has stated many times that if one accounts for his brand value, his net worth is “much higher” than what was stated on the SFCs.
During his testimony, he touted his properties, the deals he made, and the improvements he brought via development.
The defense attorneys noted that President Trump has 50 years of development experience, has contributed greatly to the skyline of New York, and that in any other real estate case, he would qualify as an expert.
