In the ongoing $250 million civil fraud lawsuit against former President Donald Trump and his organization, significant developments took place this week. The lawsuit, filed by Letitia James, accuses Trump and his business of misrepresenting financial documents to banks and insurers.
On Monday, Nov 6, 2023, Donald Trump admitted to submitting inaccurate financial statements to induce lending while denying any wrongdoing during his testimony. He testified about his assets and stated that he had no issue meeting the $2.5 billion net worth threshold to secure a loan. His relationship with Deutsche Bank (ETR:DBKGn) was emphasized when a 2011 term loan agreement he signed was shown. State lawyers presented evidence that Trump had inflated his worth, gaining over $300 million illicitly. He acknowledged that the sale of the D.C. hotel in 2022 for $375 million resulted in him gaining $126 million and his eldest three children earning $4 million each. The former president also lobbed insults at Judge Arthur Engoron and Attorney General Tish James, while admitting to financial fraud. Trump asserted that banks got richer doing business with him.
There was a discrepancy between Trump's claimed net worth of $4.3 billion and the $1.6 billion figure stated by James' office. He also mentioned that the loan for Chicago International Hotel & Towers was paid off in full, despite Deutsche Bank cutting ties with him after the January 6 Capitol attack.
On Wednesday, Nov 8, 2023, Ivanka Trump testified about her role in filing the financial statements during her tenure at The Trump Organization. These statements were used to secure three loans from Deutsche Bank between 2012 and 2013. She denied involvement in calculating or submitting these statements but acknowledged her close ties with Rosemary Vrablic, a key figure at Deutsche Bank. Emails from 2011 showed Ivanka acknowledging potential issues with meeting Deutsche Bank's net worth requirement for a Miami golf club deal but urging approval anyway. She also expressed satisfaction with the loan terms in an email to then CFO Allen Weisselberg and requested immediate discussion.
Ivanka was named in Attorney General Tish James’ September 2022 lawsuit as playing a “key role” in securing lucrative loan terms for Trump’s Doral golf resort in Miami and overseeing leasing negotiations for the Old Post Office hotel in Washington, D.C. She helped secure a loan from Deutsche Bank with false statements, which facilitated the sale of the D.C. hotel. When questioned about several emails related to these dealings, Ivanka claimed she could not remember them.
On the same day, Michael Cohen was accused of perjury by the defense. However, Judge Engoron rejected the direct verdict plea put forth by Trump's legal team.
Last week, Eric Trump and Donald Trump Jr. testified, clarifying that the company's accountant managed all accounting affairs. The lawsuit continues to unfold as more information is brought to light.
Before the trial started, Trump, his eldest sons, and former top executives Weisselberg and Jeffrey McConney were found liable for fraud for inflating Trump's net worth on financial statements to maximize their profits illegally. Engoron's pretrial ruling noted that honest brokers lost out due to Trump's illegal deal-making. He will rule on the AG's six remaining causes of action and how much Trump and his associates should have to pay at the end of the trial. Trump’s lawyers are expected to begin presenting their case on Monday and to rest by mid-December.
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