Donald Trump obtained hundreds of millions of dollars in loans using financial statements that a court found to be fraudulent, according to a retired bank employee who testified Wednesday in the former US president’s civil fraud trial.
Trump’s statements about the financial situation were necessary to approve a $125 million (about 117.7 million euros) loan in 2011 for his golf resort in Doral, Florida, and a $107 million (about 100.7 million euros) loan in 2012. About his hotel and skyscrapers Clouds in Chicago, Nicholas Hay, former head of risk management at Deutsche Bank, testified.
Those statements also helped Trump get larger loans and lower interest rates, said Hay, who headed the risk group at the bank’s wealth management unit from 2008 to 2018.
In September, a judge ruled that Trump and his company, the Trump Organization, committed years of fraud by overstating the value of Trump’s assets and net worth in financial statements he provided to banks, insurance companies and others to do business and guarantee loans. Allen Weisselberg, Trump’s longtime chief financial officer, acknowledged in testimony Tuesday that the information in the financial statements was not always accurate.
Trump denies any wrongdoing, emphasizing disclaimers in documents that he says warn creditors not to do their homework. Trump stated that the banks he dealt with were not harmed, and that they made a lot of money from their deals and “to this day they have no complaints.”
Hay is testifying at a trial in the fraud case brought by New York Attorney General Letitia James against Trump, his company and top executives. This is the first time that a bank employee has testified in court about the impact of Trump’s financial statements on his ability to obtain loans.
Deutsche Bank’s rules require Trump to act as guarantor for the Doral and Chicago loans, in addition to offering the Miami resort and Wabash Avenue skyscraper as collateral, meaning he will be required to repay the loans if his properties fail.
Hay said Deutsche Bank’s private wealth management unit, which handled the loans, would not have approved them without “strong financial assurance” from Trump. Hay said he reviewed Trump’s financial statements before approving the loans, and at the time, he had no reason to doubt their authenticity.
Hay said the documents portrayed Trump as a wealthy businessman who invested heavily in golf courses and other real estate, with strong cash flow and little debt.
He added that representatives from Deutsche Bank also met with executives from the Trump Organization to review the information. “I assumed that the representation of assets and liabilities was largely accurate,” Hay said of Trump’s financial statements.
Trump’s 2011 financial statement listed his net worth at $4.3 billion (about €4 billion). Hay said he used that number to determine a condition of the loan that requires Trump, as guarantor, to maintain a minimum net worth of $2.5 billion (about 2.3 billion euros), excluding any amount arising from your fame.
Trump, the leading Republican candidate in next year’s election, attended the first three days of the trial last week, watching testimony, consulting lawyers and complaining about the case to television cameras outside the courtroom. He is expected to return to court as a witness at the end of the trial.
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