As the Trump fraud trial unfolds, some shocking revelations are coming to light, raising questions about the integrity of the banking system and how it may impact the American public. Fraud aside, Trump seemed to be an ideal borrower — the truth reveals more complexities.
A Model Borrower
Donald Trump never missed a loan payment during his time borrowing from Deutsche Bank. On paper, he appeared to be the ideal client.
Deutsche Bank also profited well from Trump, earning millions in interest over the years from his loans.
But There’s a Catch
Despite these ideal conditions, allegations of fraud cast a shadow over the otherwise fruitful relationship between Trump and the banks.
The New York Attorney General, Letitia James, is gunning to ban the Trump Organization from operating in New York and prohibit Trump and his eldest sons from running any New York-based company.
Trump’s legal team argues that all obligations as a borrower were met and that the bank made a good credit decision by lending to him.
Trump’s assets, used as collateral for the loans, grew each year. This includes his tower in Chicago, a golf resort in Miami, and a luxury hotel in Washington DC.
The Question of Fraud
The attorney general alleges that Trump exaggerated his net worth by more than $3.6 billion per year, affecting the risk assessment for the loans.
A loan getting repaid is not the same as the bank accurately gauging the risk involved in providing that loan, as highlighted by Deutsche Bank executives. By exaggerating his worth, Trump allegedly won millions in interest breaks, giving Deutsche Bank an unfair return on their capital.
Experts will soon testify that Deutsche Bank might never have lent to Trump if they knew the actual gap between his stated and real net worth.
A Bitter End
Deutsche Bank decided to sever its relationship with Trump after learning about the inconsistencies in his financial statements.
Such fraudulent actions could have far-reaching consequences, including stricter lending protocols that may affect the average American borrower.
A current Trump executive, Patrick Birney, is expected to play a central role in the trial, as he prepared Trump’s net-worth statements between 2017 and 2021.
The Ripple Effect
The attorney general suggests that Trump put pressure on his top executives to show an increasing net worth each year, leading to exaggerated figures.
Cases like this could have a ripple effect on the American banking system, putting a spotlight on the need for tighter regulations and transparency.
As the trial progresses, it will be interesting to see how this situation affects the credibility of the banking system.
The post Trump’s Fraud Trial Exposes Weaknesses in the Banking System first appeared on The Net Worth Of.
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