A former Deutsche Bank AG risk manager testified at Donald Trump’s civil fraud trial that he made decisions on hundreds of millions of dollars in loans to the real estate mogul for years based in part on financial statements that a judge has already ruled were wildly inflated.
(Bloomberg) — A former Deutsche Bank AG risk manager testified at Donald Trump’s civil fraud trial that he made decisions on hundreds of millions of dollars in loans to the real estate mogul for years based in part on financial statements that a judge has already ruled were wildly inflated.
James “Nicholas” Haigh, who had the final say on loans to some of the bank’s wealthiest US clients, including the former president, is the first witness affiliated with the German lender to testify at the trial over claims in a lawsuit brought by the state of New York. Haigh has been a banker for decades and left Deutsche Bank in 2018. He took a position with Bank of America Corp. and is now retired.
A lawyer for New York Attorney General Letitia James, who filed the lawsuit last year, asked Haigh in state court on Wednesday if he made any assumptions about the annual financial statements that the Trump Organization presented to his team starting in 2011 to secure loans for a golf course and two hotels.
“I assumed the representations of the assets and liabilities were broadly accurate,” Haigh testified. The former bank official didn’t weigh in on whether he believed Trump had been dishonest, as the state alleges.
The trial in Manhattan, expected to last until Dec. 22, is one of six Trump faces as he seeks to return to the White House in the 2024 election, including in four criminal prosecutions. The Republican front-runner denies wrongdoing and says all the cases are part of a Democratic-led “witch hunt.”
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Haigh is one of six current and former Deutsche Bank employees who are potential state witnesses at the trial, which is in its second week. Trump’s longtime family banker, former Deutsche Bank Managing Director Rosemary Vrablic, will testify later. The Frankfurt-based lender decided to cut ties with Trump following the deadly riots at the US Capitol on Jan. 6, 2021.
James, a Democrat, alleges Trump and his Manhattan-based company used the inflated asset valuations to reap a total of $250 million in “illegal profit” from cheaper loans and insurance policies from 2011 to 2021. Before the trial started, the judge overseeing the case ruled Trump is liable for fraud, based on the strength of the evidence alone. He’s now listening to testimony on the state’s six remaining claims as well as penalties.
During the cross examination of Haigh, Trump attorney Jesus M. Suarez suggested the bank wasn’t duped because his bankers did their own calculations of Trump’s net equity, which they determined was less than the amount he’d claimed in financial statements before approving the loans anyway.
“Most of the time that involves actual appraisals — this may be more of a sanity check on numbers,” Haigh said. “But also, we, the bank, hadn’t done all of the due diligence one would do, in the sense of the opinion of value that you would see in an appraisal.”
During additional questioning of Haigh on Thursday, Suarez suggested Deutsche Bank benefited from its relationship with Trump, presenting documents in court showing the bank got more than $100 million in cash deposits by the former president and affiliated entities.
Trump never defaulted on the loans, which he repaid, and Haigh agreed Trump didn’t make any late payments that he was aware of.
But getting repaid “is just one element of what we are trying to achieve,” Haigh said. The lender needs to properly assess the risk of each loan so it can set aside enough capital in case of a default and price the loan accordingly, he said. Getting repaid “doesn’t address at all whether we got properly compensated for the risk we were taking,” he said.
Trump and two of his sons named in the New York suit, Donald Trump Jr. and Eric Trump, also will testify at some point during the trial. They appear on the witness lists for both sides. Ivanka Trump, who was dismissed from the suit by an appeals court in June, appears on the state’s list.
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(Updates with detail from the cross-examination of the witness.)
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