Deutsche Bank Executive Bolsters Trump Defense in New York Fraud Trial

Testimony by a Deutsche Bank executive at former President Donald Trump’s civil fraud trial seems to have bolstered the former president’s defense.
Deutsche Bank Executive Bolsters Trump Defense in New York Fraud Trial
Former President Donald J. Trump speaks at the National Rifle Association in Indianapolis, Ind., on April 14, 2023. (Madalina Vasiliu/The Epoch Times)
Tom Ozimek

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.

New York Supreme Court Justice Arthur Engoron, the presiding judge, said he would consider the request for dismissal but noted that “the mere fact that lenders were happy doesn’t mean the statute wasn’t violated.”

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.
Already, Justice Engoron has issued a summary judgment finding President Trump and his company liable for fraud. The current trial is to decide the remaining claims of conspiracy, insurance fraud, and falsifying business records.

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.

So far, President Trump’s strategy of calling bank officials to testify appears to be making headway.

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.

Ms. James has argued that bank profitability with respect to the loans makes no difference to the underlying legal issue, which is the claim that President Trump violated New York laws by knowingly inflating the value of his assets and submitting fraudulent documents to banks and insurers.

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.
The former president previously testified at length, giving detailed history and commentary on his properties.

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.

Catherine Yang and The Associated Press contributed to this report.