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Banker involved in large loans to Trump’s company testifies in his defense in civil fraud trial

When Deutsche Bank lent hundreds of millions of dollars to Donald Trump’s company, the bank always followed its own guidelines, including verifying information provided by potential borrowers, an executive testified Tuesday at the meeting of the former president. civil trial for fraud.

The loans — intended for projects in Florida, Chicago and Washington, D.C. — are at the center of the lawsuit filed by New York Attorney General Letitia James, claiming that Trump and his company misled lenders and insurers into providing financial statements that blatantly overstated the value of his assets and his overall net worth. value. The defendants deny the allegations.

Deutsche Bank reviewed the financial statements before making the loans through its department that works with high-net-worth individuals – a route that helped secure more favorable interest rates than those likely available from the bank. commercial real estate division, according to the lawsuit. The deals came with conditions regarding Trump’s net worth and, sometimes, his cash flow, and often required annual submission of his financial statements.

But, giving evidence for the defence, chief executive David Williams said bankers viewed clients’ reports of their net worth as “subjective or subject to estimates” and had their own views on those financial statements.

“I think we expect the information provided by customers to be accurate. At the same time, it is not an industry standard that these statements be audited. They rely heavily on the use of estimates,” Williams said, so bankers “make some adjustments on a regular basis.”

At times, the bank estimated Trump’s net worth at $1 billion or more, lower than his net worth, according to documents and testimony. But it wasn’t necessarily unusual or alarming, Williams said.

“It is a conservative measure to make these adjustments. You could even say it’s a stress test of financial strength, he said.

The attorney general’s office, however, argued that such adjustments were never intended to account for the alleged fraud. Nicholas Haigh, now retired Deutsche Bank executive, testified earlier at trial that he assumed the figures “were broadly accurate”, although the bank subjected them to “sanity checks” and sometimes made significant “haircuts”.

Judge Arthur Engoron has already ruled that Trump and other defendants engaged in fraud. The trial is expected to resolve other allegations of conspiracy, insurance fraud and falsification of business records. There is no jury, Engoron will decide the verdict.

Trump, the current Republican front-runner for the 2024 presidential election, is portraying the whole affair as a political low blow from James, a Democrat.

Trump maintains that his financial statements actually understated his wealth and that any exaggerations – such as listing his Trump Tower penthouse for years at nearly three times its actual size – were errors.

He stated in his own testimony this month, its lenders cared more about property locations and transaction parameters than financial statements. And he argued that lenders were essentially being asked to do their own homework, pointing out, among other things, disclaimers stating that the statements had not been verified.

Deutsche Bank’s guidelines asked loan officers to “independently verify all material facts,” and Williams said bankers followed those and other instructions when dealing with Trump.

“Are you aware that there were instances where Deutsche Bank did not follow its own guidelines in providing loans to President Trump?” asked defense attorney Jesus M. Suarez.

“No,” Williams replied.

James’ lawyers have not yet had the opportunity to question him.

James wants the judge to impose more than $300 million in sanctions and ban Trump from doing business in New York — and that’s in addition to Engoron’s pretrial order that a receiver take control of some Trump properties. A the court of appeal froze this order for the moment.

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